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Why China may follow a different recovery path than Japan

A comparison of key macro indicators between present-day China and 1990s Japan.

By: Ivan Xie Masaki Nakamura Abhijeet Singh

Updated: 4/12/2024

Key Takeaways

Similar to Japan roughly 30 years ago, China is facing a list of growth concerns that could stall or foil its plan to eventually challenge the U.S. economy for global economic leadership.
China may be even worse off than Japan near the end of its postwar rise in some ways, especially when it comes to long-term demographic trends that could constrain the size of its labor force.
That said, China’s risks may be less severe than Japan’s in the 1990s, even though China is likely to face unique challenges.
We believe an economically changing China—a sizable component of many international and emerging-market indexes—may make a case for active management in international allocations in 2024 and beyond.

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Why China may follow a different recovery path than Japan

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