Joseph Sherman

China: Exactly Where Japan Was in the 1980s?

Vitaliy Katsenelson writes "China: Exactly Where Japan Was in the 1980s? - "I know, I may sound like I’m beating a dead horse – how much printer cartridge can one spill over China? – but I have a very high burden of proof to overcome. Let me demonstrate it by this analogy: Let’s rewind 20 years. It is 1989 and I am writing that the Japanese economy is on the verge of severe decline."

Katsenelson makes an interesting point, but needs to consider how the world has changed since the 1980s. In some ways China may be in a weaker situation. It has the large manufacturing base to produce goods cheaply and efficiently, but many other countries are catching up, and some of it is paradoxical. For example, as wages increase, the real estate market drives prices up, and environmental standards start to rise, then the cost of manufacturing in China increases. This will in turn send some of their current customers for other locations.