Wednesday, August 16, 2017

"Lost Decades" Ahead for China?

The Daily Mail (U.K.) writes about the threat to the Chinese economy, comparing it to that of Japan.
Sizzling property prices, a groaning debt load, wealthy tourists and tycoons willing to slap down eye-popping sums for art: China is starting to look like Japan before its economic bubble burst in the early 90s.

"What's scary is that people in China are thinking, 'China is special, so we are OK.' That's exactly how people felt in Japan during the bubble era," said Kokichiro Mio, senior economist at NLI Research Institute.
Regular COTTonLINE readers know we've been making this comparison for at least a couple of years. We've speculated it is what happens when you adopt some of the outward forms of capitalism without the underlying cultural factors which support and maintain it. Both countries veered into crony capitalism which, as a kind of neo-mercantilism, is unsustainable.