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October 04, 2010

Rising sum

Ethan Devine argues China needs to reconsider its Japanese inspired export driven growth model or risk following Japan down the same path to economic stagnation (via A&L Daily).

... Japan's export boom funded stellar growth for four decades. But its undervalued currency eventually helped blow one of the largest bubbles in history, the bursting of which still hobbles Japan today. Japan's famously dismal demographics didn't help, but China's aren't much better. Beijing's one-child policy, introduced in 1979, has worked its way up the population pyramid such that China's supply of rural workers ages 20 to 29 will halve by 2030. Worse yet, China is much larger than Japan -- which means that the global consequences of a crash would be far greater. For the moment, Beijing is riding high, but China's sustained success depends on understanding where Japan went so badly wrong.

Where Japan went so badly wrong at the link.

Posted by Ghost of a flea at October 4, 2010 06:38 AM