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China takes lessons from Japan on economic history

21 Comments
By Kazunori Takada and Leika Kihara

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21 Comments
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“They aren’t a single bit interested in Japan’s successes. Their biggest interest is in Japan’s mistakes,”

Then they have a lot to study -- like three decades of failed policies.

-1 ( +8 / -9 )

The whole West is in a huge economic crisis, that will last for many years. You can't grow for ever. This is the only real lesson you can learn. China and other developing nations have still some space fro the growth, later they will take the same slow pace of the developed countries.

3 ( +7 / -4 )

I know one thing about Japanese merchants, they are very inflexible and want to get rich quickly. But I have seen how Koreans and Chinese settle for less than the original price tag because they sell by volume.

-1 ( +5 / -6 )

@Alex80

You can't grow for ever.

This should be the lesson for China, considering they will have the anchor of the CCP around their neck until the end of time. As for the West, I can't speak for Europe, but in the US, the stock market is near all time highs. Must be a pretty insidious bubble for no one here to see it.

-1 ( +3 / -4 )

However, much of the cash from the easing, along with hot foreign money that followed the liberalisation of the capital account, flowed into stocks, property and other assets, often magnified through leveraging.

This has already happened in China.

given all of the liquidity slopping around the global financial system, China may be abel to keep the illusion of growth alive a while longer. but eventually the cranes will come home to roost.

3 ( +4 / -1 )

As for the West, I can't speak for Europe, but in the US, the stock market is near all time highs.

The stock market has often been near all-time highs. Or looked at it another way, every time the stock market was near an all time high, it eventually got higher.

2 ( +2 / -0 )

Must be a pretty insidious bubble for no one here to see it.

Lots of people see it. The insidious thing is that so many prefer to ignore the obvious.

0 ( +1 / -1 )

The question is, are they in time? There's no room left to maneuver, and the precipice is approaching.

0 ( +0 / -0 )

"Also China heavily regulates its banking sector...."

Which is why China doesn't have horrific financial crises, like we do. Beijing needs to fend off all the calls for "liberalization" of its financial sector. Currently, its banks are government owned.

It will do well to keep the situation that way, and not allow the financial sector to inflict massive and lasting damage to its real economy, as we have sadly done.

2 ( +2 / -0 )

The stock market has often been near all-time highs. Or looked at it another way, every time the stock market was near an all time high, it eventually got higher.

Uh, that would be the definition of an economy that is growing. Something like 2 or 3% annually, which is not bad for a developed country.

0 ( +0 / -0 )

It's all economic cycles. Europe was up; now it's down. The US was down; now it's up. It's only those who believe that it'll always be up or always be down who don't see it coming.

1 ( +2 / -1 )

As for the West, I can't speak for Europe, but in the US, the stock market is near all time highs. Must be a pretty insidious bubble for no one here to see it.

It's a bubble indeed, and we can bet also this one will explode someday.

-1 ( +0 / -1 )

“They aren’t a single bit interested in Japan’s successes.

Because there are none as far as non-Japanese can tell?

0 ( +0 / -0 )

"One of the lessons from Japan’s experience is that achieving domestic economic stability should be the top priority for policymakers (rather than international considerations),"

Does this mean Japan actually had the option to prevent all of this from happening? But didn't do it because a certain country would've gotten mad? The 1985 Plaza Accord sounds more like a coercion rather than an agreement, and that this whole thing was by design. Japan, after all, at the time were a producing and exporting country that basically had no rivals. I guess someone thought they needed to be stopped.

0 ( +1 / -1 )

@ThePBot You have something from this millenium to explain Japan's economic performance?

0 ( +1 / -1 )

As for the West, I can't speak for Europe, but in the US, the stock market is near all time highs. Must be a pretty insidious bubble for no one here to see it.

It's a bubble indeed, and we can bet also this one will explode someday.

Everything eventually goes down, then it'll go back up again. It's all cycles. Same thing with China. It's only morons who'd think it'd stay up or stay down forever.

0 ( +0 / -0 )

coupled with economic slowdown, is raising fears of a rapid rise in bad loans at banks and a further dent in local government finances.

For getting higher economic growth, public and private sector have spent more money for infrastructure. In another word, both public and private borrowed more money from banks like local Chinese governments. Infrastructure and property investment will get the lucrative return in the good time.

However good time will not last forever. When the boom is over, there will be bad loans from borrowers to banks. Japanese asset bubbles back in 1990s was liberation of the capital market. Capital should be controlled for not speculation.

Capital is the wild beast. If there is no restraint , it will come in quickly. It will run away quickly. The consequence of Japan was the two lost decades of sick man of Asia. Japan has burnt a lot of the money in stock market an property speculation.

0 ( +0 / -0 )

Everything eventually goes down, then it'll go back up again. It's all cycles. Same thing with China. It's only morons who'd think it'd stay up or stay down forever.

The crisis in the West (and I'm including Japan too) isn't a cyclical crisis, but a systemic crisis. This means stagnation with high level of debt, both public and private, will last for many years. In the US, the "recovery" isn't a real recovery. The PIL doesn't say everything. The facts are different, rich people are getting always richer, while people with low incomes are getting always poorer. Recovery? Yeah, but only for bankers and managers.

-2 ( +0 / -2 )

A key lesson is China must not follow Japan and let the Chinese Yuan appreciates like the Yen appreciated from 180 to 100 in the 1990s and 2000s. The Chinese should weaken the Yuan. Like Japan then, China now is The exporter nation. China also must radically follow Japan and make sure its rivers, water and air are clean. In addition, regional government and banks' bad debts must be written down asap.

0 ( +0 / -0 )

@mr_igb The Chinese people and foreign governments will only tolerate the dumping of products below cost so long.

0 ( +0 / -0 )

In the US, the "recovery" isn't a real recovery.

People have been saying that for the last couple years now; it's about time to drop it. And people did - US polls nowadays have more Americans positive about the economy than negative. More Americans are feeling it. (Doesn't mean everybody is at recovery - it never does.) Just be happy for them.

0 ( +0 / -0 )

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