The Asian Malaise: Japanese Edition
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  • Luke Lea

    The whole world is in recession. That is pretty obvious. How will China weather the storm? That is what I am wondering. The Party’s legitimacy is closely tied to the prosperity of the economy. If they lose that, what do they put in its place?

  • Luke Lea

    Here is a good China link:

    http://tinyurl.com/9fj2tfg

  • And the answer from the austerity crowd is: “The beatings will continue until morale has improved.”

  • Mark

    what’s interesting about this is that it underlines, once again, the mercantilist nature of Asia as an economic block. For the last few decades, economists (mostly at banks, paid to sell reports, but also from the World Bank and IMF) have been looking for signs that domestic consumption has gained enough critical mass that a ‘decoupling’ has taken place from developed/Western demand -in other words, that domestic consumption has enough momentum and, critically, independence that these countries no longer rely on exports for growth as crucially as they once did. Unfortunately, empirical evidence shows that large parts of the consumption makeup in Asia relies on infrastructure investment and/or exports. Once those drivers weaken, so does domestic consumption. This has certainly been the case in Japan over the last two decades, and is very much the case in China today.
    I don’t know if it is cultural or will change over decades, but an end to the financially repressive, mercantilist policies that predominate in Asia would be a good first step.

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