China Setting Stage For Japan’s Next Big Recession
The post China Setting Stage For Japan’s Next Big Recession appeared on BitcoinEthereumNews.com. Chinese consumers walk past commercial buildings in Shenzhen. The country’s consumer inflation slowed to zero in September, suggesting weak overall demand in the economy. Zhong Zhi/Getty Images Amid chatter about the “Japanification” of China’s economy, it’s wise to keep an eye on how Beijing’s troubles might scuttle Tokyo’s recovery, too. There’s little doubt that Asia’s biggest economy has students of Japan’s lost decades worried. Look no further than stagnant Chinese growth, weak consumer prices and troubles in the property sector that echo Japan’s 1990s bad loan crisis. Yet as China’s 2024 prospects wane, its biggest trading partners are coming to terms with the collateral damage to come. Japan is uniquely vulnerable to China’s downshift amid myriad global headwinds and other dynamics—including controversies over patents. “Looking further down the horizon, Japan’s economy will be hurt by a lasting deceleration in Chinese growth, the techno-war and geopolitical tension between China and the West that has led to de-risking and Chinese intellectual property theft from Japanese firms located inside China,” says economist Richard Katz, publisher of the Japan Economy Watch newsletter. The biggest immediate impact, Katz says, is exports. He calculates that every 10% decline in exports to China directly reduces Japan’s gross domestic product by 0.4%. That’s roughly the amount by which Japan’s exports to China fell in the first eight months of 2023. Things, of course, may get worse as U.S. bond yields and global tensions surge in tandem. In addition, Katz notes, every 1% drop in Chinese GDP growth shaves off about 0.3% of GDP for Asia generally. These dynamics explain why the Bank of Japan is in no hurry to take its foot off the monetary accelerator pedal. Since April, global markets have been betting (wrongly) that new BOJ Governor Kazuo Ueda would begin exiting from 23 years of…
The post China Setting Stage For Japan’s Next Big Recession appeared on BitcoinEthereumNews.com.
Chinese consumers walk past commercial buildings in Shenzhen. The country’s consumer inflation slowed to zero in September, suggesting weak overall demand in the economy. Zhong Zhi/Getty Images Amid chatter about the “Japanification” of China’s economy, it’s wise to keep an eye on how Beijing’s troubles might scuttle Tokyo’s recovery, too. There’s little doubt that Asia’s biggest economy has students of Japan’s lost decades worried. Look no further than stagnant Chinese growth, weak consumer prices and troubles in the property sector that echo Japan’s 1990s bad loan crisis. Yet as China’s 2024 prospects wane, its biggest trading partners are coming to terms with the collateral damage to come. Japan is uniquely vulnerable to China’s downshift amid myriad global headwinds and other dynamics—including controversies over patents. “Looking further down the horizon, Japan’s economy will be hurt by a lasting deceleration in Chinese growth, the techno-war and geopolitical tension between China and the West that has led to de-risking and Chinese intellectual property theft from Japanese firms located inside China,” says economist Richard Katz, publisher of the Japan Economy Watch newsletter. The biggest immediate impact, Katz says, is exports. He calculates that every 10% decline in exports to China directly reduces Japan’s gross domestic product by 0.4%. That’s roughly the amount by which Japan’s exports to China fell in the first eight months of 2023. Things, of course, may get worse as U.S. bond yields and global tensions surge in tandem. In addition, Katz notes, every 1% drop in Chinese GDP growth shaves off about 0.3% of GDP for Asia generally. These dynamics explain why the Bank of Japan is in no hurry to take its foot off the monetary accelerator pedal. Since April, global markets have been betting (wrongly) that new BOJ Governor Kazuo Ueda would begin exiting from 23 years of…
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