中国应汲取日本教训（China should draw lessons from Japan）.docVIP

中国应汲取日本教训（China should draw lessons from Japan） China should draw lessons from Japan If any countrys bureaucrats, bankers and economists may now need to learn from Japans mistakes, it is china. This will not be the first time China has taken Japan as its example. Ten years ago, I wrote a book about the banking crisis in Japan in the 90s, a book that became a best seller in china. I was very surprised at that time (mainly because I had never sold the copyright to the mainland of China). But in retrospect, the book is quite symbolic. Similar to Japan, which had burst before the bubble burst in the 80s of last century, Chinas credit and property prices are soaring, but thats not important. Importantly, like Japan at the time, China is now trying to transform the banking, central, and government controlled financial systems into more financial systems at the core of the free capital market. Even as the economy matures, it is necessary for China to make such a shift, but it poses enormous risks. Therefore, it is wise for some senior Chinese officials to ask privately what they can learn from Japans mistakes. It is also sensible that, despite the cold relationship between China and Japan, the two central banks have been carefully arguing about regulatory and bad debt issues. So what lessons should Chinese investors and policymakers take? There are at least 6 lessons. First of all, the economic slowdown may have adverse effects. In the 80s of the last century, Japans economy flourished and bank loans performed well. But bad debts soared during the 90s economic slowdown. That seems obvious, but it is a surprise for Japanese banks and officials. Chinese officials should beware of the fact that Chinas economic growth rate is expected to fall below 7%. Second, deflation is deadly, especially for banks. As the price falls, the debt burden rises. In general, bad debts also rise. This is also obvious, but Japanese banks are equally unprepared. China should be wary of the possibil