But the most instructive comparison for China today is Japan in the 1980s. Although it was much richer then than China is today, its economic growth, like China’s over the past decade and a half, was created by an investment boom, much of which flooded into property. (View Highlight)
Part of the problem was that policymakers were too slow to respond. It was not until 1999 that the Bank of Japan cut its benchmark rate to zero; the government directed stimulus towards investment, rather than consumption. The bust turned into decades of stagnation. (View Highlight)
