China's economy at risk of turning Japanese

DRUM TV ^ | 06/18/2013 | Satyajit Das

[TexGrill]

Thirty years after Japan's arrival as an economic powerhouse, the country's industrial and economic decline is palpable. China could be on the same trajectory, says Satyajit Das.

Despite a history of conflict and competition, China and Japan share a contiguous geography and development models. China may also share Japan's economic fate.

Japan's post-war economic recovery was based on an export-driven model, using low-cost labour to drive manufacturing. Consciously or unconsciously, China followed the same model when the country started to open up economically under Deng Xiaoping.

Both countries used under-valued currencies to provide exporters with a competitive advantage. Exports were promoted at the expense of household income and consumption. Both encouraged high domestic savings rates, which was used to finance investment. Both countries generated large trade surpluses which were invested overseas, primarily in US government securities, to avoid upward pressure of their currencies and to help finance purchases of their exports. Both also used high levels of investment financed domestically to drive economic growth.

The response of Japan and China to economic crises is also similar.

[TexGrill]

The problem with China right now is that Beijing officials are listening too much too Obama's and Soros' operatives. They stopped using their famous 'BS detectors' ever since Xi Xinping became the leader of the country. The new regime is very naivete.

[A_Former_Democrat]

I really think so

[Celtic Conservative]

LOL! Glad i'm not the only one who remembers that song.

CC

[A_Former_Democrat]

A Classic along with video, IMO !