China’s economic challenges continue to resemble those of Japan’s ‘lost decade’ of the 1990s — but there’s one key difference in China’s favour, according to ANZ’s Richard Yetsenga.
Speaking on video, ANZ’s Group Chief Economist told ANZ Institutional Insights China’s export dominance was a bright spot when making the comparison, and China appears in no mood to let that advantage lapse.
“The differences largely come down to the way China has managed to leverage export markets the way Japan didn't,” he said. “I think China will probably continue to do that.”
Earlier in August, Yetsenga wrote of peaks in China’s house prices, construction and population in the early 2020s, as well as a growing current account surplus, slowing gross domestic product per-capita growth, and lower consumer confidence, all of which reflect Japan’s 1990s experience.
You can watch the video below to find out more.
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China has somewhat fallen from view as the world grapples with the fallout from the Middle East conflict, Yetsenga said, particularly as recent developments have put instability “back in the driver's seat” of markets.
Yetsenga said the uncertainty is likely to ease in time, but like many of the key macroeconomic challenges of the 2020s, it remains a long-term concern for markets.
“The last five years in the global economy, we've had flare ups on a number of issues,” he said.
“None of those preexisting issues have gone away, but they have kind of stepped into the background.
“I presume that this crisis will be similar. We can hope it shifts into the background, but hoping it goes away entirely might be a step too far.”
