Despite concerns about a hard landing, China is not heading toward Japanese-style “lost decades” of stagnation. And yet, while China’s embrace of structural rebalancing distinguishes it from Japan, the endgame could be similar if the struggle to implement its new model is not resolved decisively,
NEW HAVEN – Despite deepening concerns about China’s economy, the country is not heading toward “lost decades” of Japanese-style stagnation. And yet a worrisome ambiguity clouds this verdict. Japan’s fate was sealed by its reluctance to abandon a dysfunctional growth model. While China’s embrace of structural rebalancing distinguishes it from Japan, it is struggling to implement that strategy. Unless the struggle is won, the endgame could be similar.
NEW HAVEN – Despite deepening concerns about China’s economy, the country is not heading toward “lost decades” of Japanese-style stagnation. And yet a worrisome ambiguity clouds this verdict. Japan’s fate was sealed by its reluctance to abandon a dysfunctional growth model. While China’s embrace of structural rebalancing distinguishes it from Japan, it is struggling to implement that strategy. Unless the struggle is won, the endgame could be similar.