I don't normally write about China, but since its situation affects Japan, I thought I would.

Will China, like Japan before it, suffer a property and financial crash that triggers a couple of lost decades? Daniel Rosen, co-founder of the Rhodium Group argues that a ratchet down to 3% growth for the rest of this decade is the "best" it can do. Without serious reform, it could be worse.
           Suppose, however, that China avoids a crash. In that case, China, like Korea before it, may simply see a continuation of the gradual deceleration it has already been experiencing. In this scenario, China's growth would decelerate to a 3-4% pace in the next few years and then, according to Bloomberg Economics, steadily slow to less than 1% by 2050.
           Beijing claims that the West exaggerating China's troubles and it will return to 8% yearly growth over the next decade or so. This is a chimera. In the West, Nicholas Lardy argues that a return to market-oriented policies would enable China to grow 6% to 7% per year for the next decade; if it does not do so, its growth will languish at 3-4% per year for the next four to five years.
 
For details, see https://richardkatz.substack.com/p/chinas-growth-prospects-part-i

Richard Katz

https://richardkatz.substack.com/