A group of heavyweight Chinese economists sat down with Japanese counterparts in Beijing on Tuesday to discuss whether China can avoid its own “lost decades”, as the government looks to negotiate a deal to end the US-China trade war. Japan engaged in a lengthy trade dispute with the United States in the 1980s, with a series of deals over currency and market access blamed in some quarters for the decades of economic stagnation that followed. It is known that many in Beijing are worried that a bad trade deal with the US could result in China following a similar trajectory, with currency exchange rate and market access high on the list of demands of Washington’s negotiators. In particular, US demands that China limit the yuan’s depreciation have been compared with the Plaza Accord, under which Japan, France, Germany, the United Kingdom and the US agreed to push the value of the US dollar down against the Japanese yen and German Deutsche mark. At a symposium on Tuesday, Hua Sheng, a Chinese economist and honorary dean of the economics school at Southeast University in Nanjing, said he was eager to hear from Japanese experts over how the Plaza Accord had changed the Japanese economy. “It’s a big warning for the Chinese people,” Hua said. “Japan is China’s neighbour, and Japan’s path has significant referential value for us.” Through the Plaza Accord, the five countries began selling large amounts of US dollars, leading to a significant loss in dollar value. The intervention resulted in the Japanese yen doubling in value against the US dollar in under two and a half years. Japan’s exports became more expensive and less competitive as a result, arguably defanging the engine of its 1980s economy. As China and the US reach enter the final stages of negotiations over a deal that could end the trade war , the parallels are clear for many in China. A widely-held perception among Chinese scholars is that the Plaza Accord helped to fuel Japan’s asset bubbles in the following years, which led to decades of economic stagnation and wrecked Japan’s chances of catching up with the US economy. Indeed, former Japanese deputy vice-minister for finance, Masahiro Kawai, said last month that he is in regular touch with Chinese officials and economists on this topic. While details of the US-China deal have not been disclosed, speculation in China is rife that the US is pushing for a “new Plaza Accord”, and this has faced some resistance in official circles. Taoran Notes, a social media outlet controlled by Beijing, said that the deal between Beijing and Washington is unlikely to enable the US to “pressure on China for appreciation of yuan”. The symposium was sponsored by the Sasakawa Japan-China Friendship Fund and supported by the Chinese People’s Association for Friendship with Foreign Countries, a Beijing-affiliated organisation now chaired by Li Xiaolin, daughter of former Chinese president Li Xiannian. At the event, Xu Xiaonian, a professor of economics at the China Europe International Business School, said that the US-China trade dispute has broader geopolitical and ideological context than the Japan-US dispute because “the US is seeing a challenger for its global leadership” this time around. “It is utterly important for China to reach a deal with the US through negotiation,” Xu said. “It can send a message that China will continue its opening-up policy, it can show people that trade disputes can be settled by making compromises, and it can relieve the nervousness in the US about China’s rise.” Xu said that the real lesson China must learn from Japan is about domestic reform, namely liberalising its economy to give businesses more freedom. Jia Kang, a former researcher with China’s Ministry of Finance and president of the China Academy of New Supply-side Economics, told the event that the US demand for greater market access and structural economic reforms could promote positive domestic change in China. “An escalated trade dispute [with the US] is forcing China to open its market wider and to take a new stance,” Jia said. “A bad thing can be turned into a good thing.” But not all speakers saw the same potential dangers for China’s economy in Japan’s history. Chi Hung Kwan, a senior fellow at the Nomura Institute of Capital Markets, said it was wrong to see the Plaza Accord as the source of Japan’s decades of deflation. Instead, he blamed Tokyo’s slowness in allowing the yen to appreciate for flooding the market with liquidity and creating bubbles in the stock market. “One lessons for China is that a stable exchange rate does not warrant a stable economy,” Kwan said. “Sometimes you have to let the exchange rate move.”