Opinion: Is China Heading for a Japan-Like Period of Economic Stagnation?

Since last year, Chinese people have been socking more of their savings away in banks, but their spending has remained weak. That, along with a sharp decline in property sales, has investors questioning whether China has entered a prolonged period of economic stagnation similar to what Japan suffered in the 1990s.

To address this question, it’s helpful to compare the data about Japan from 30 years ago with present-day data about China. Broadly speaking, the Japan of 30 years ago was already a developed economy, a level that present-day China has yet to reach. This means China still has some room to grow without the need to innovate, which is one advantage that the China of today has over Japan from 30 years ago.