Open QuestionsEconomist Richard Koo on China and Japan’s shared ‘battle against time’
China has strong tech industries and a large market – but so did Japan before its recession, warns the Nomura Research Institute scholar
Koo also explains why giving China’s consumers money will not help and why complacency in the face of energy supply and economic disruptions from the conflict in the Middle East is a cause for concern.
When you hear about so many difficulties Chinese companies are having, this 5 per cent number seems very optimistic.
Maybe if you just look at the production side, there is 5 per cent growth, but for GDP you have to view both sides: production and expenditure. We don’t have enough expenditure and consumption.
As for whether China is coming out of Japanification problems, one thing I watch carefully is the 10-year government bond yield in China, which is about 1.7 to 1.8 per cent. That’s a ridiculously low rate for a country which supposedly has plenty of domestic investment opportunities.