Can China Avoid Japan’s Lost Decades?

This podcast analyzes China's current economic slowdown, drawing parallels to Japan's "lost decades" of the 1990s. The discussion details the similarities, including deflation, a bursting real estate bubble, and decreased consumer spending leading to a balance sheet recession and low bond yields. However, it also highlights key differences, such as China's continued lending to industry and infrastructure, its potential for further urbanization, and its robust technological sector, suggesting a possible divergence from Japan's experience. The podcast concludes by noting that China's policymakers have a "playbook" from Japan's experience to potentially avoid repeating the same mistakes. A specific example cited is the negative new loans in China in July 2024, the first time in 19 years.