Like Japan in the 1990s, China is dealing with a property bubble, demographic issues, and problems with debt. Is China consequently doomed to years of stagnation?
In reality, conditions in China differ significantly from those in Japan, for both better and worse. The positive factors are the size of the Chinese market and the absence of any ideological commitment on the part of the CCP to neoliberal policies, which makes a massive government response practically possible. The negative factors are the government’s Victorian attitudes about consumer spending, its continuing desire to keep its decision-making process arbitrary and opaque, geopolitical strains that will impact exports, and Xi’s clear preference for security and stability over growth.
The bottom line here is that China’s economic future depends on the willingness of its government to improve consumer confidence by expanding the welfare state, putting more money in the hands of its citizens, and providing more encouragement to the private sector. Is Xi capable of making a credible U-turn on these issues? Right now, you would have to say no.