Japan Missed The Opportunity. China'S Lehman Moment Is Expected.

2015

Soon, China's leaders should learn from Japan in the past year.

There are more and more signs that Japan may miss the best time to achieve meaningful recovery in more than 10 years.

The Japanese economy is once again in recession. Foreign investors are losing confidence in Abe Shinzo's economic recovery plan and deflation is coming back again.

Last Saturday, the Japanese cabinet approved an additional 3 trillion and 500 billion yen (US $29 billion 170 million).

To save Japan's economic contraction for two consecutive quarters.

The throes of Andouble's economics should sound the alarm for president Xi Jinping. China seems to be increasingly facing a "lost ten years" similar to that of Japan.

Although the focus of market speculation is on why the Chinese economy will become "Japanese" and "how" it is Japanese, what will be revealed next year is the "when" Japanese trend.

China in 2015 may have many similarities with Japan in 1998. Japan's economic rigidities have really started this year.

The Japanese government has recently made an epoch-making move to allow Shan Yi securities to collapse. In the past more than 10 years, the Japanese government has refused any form of reform.

Shan Yi securities was established at the peak of Meiji Restoration. The collapse of securities in Centennial mountain also became a Lehman moment in Japan. It also meant a new political will - forcing banks to write off bad debts since the 80s of last century.

At that time, the Japanese government did not have the courage.

Japan's long-term credit banks and other institutions got into trouble in 1998, when the Japanese government rescued them.

In the next few years, many weak competitive institutions and irresponsible banks have been rescued.

about

Under the pressure of debt and smug executives, the Japanese government did not choose to fix it. Instead, it used zero interest rates and financial allocations to solve the problem.

The Andouble administration is also unfavourable.

Despite bold claims to reduce trade barriers, encourage entrepreneurship and empower women, Andouble has done nothing in the past year to let the Bank of Japan devalue the yen and raise more debt for the Minister of finance.

These are only means to cover up Japan's problems.

To avoid similar fate, Xi Jinping should start allowing partial debt default.

He needs to fight against the biggest corporate debt in the world.

According to the S & P estimates, China's corporate debt reached $14 trillion and 200 billion in 2013, which is not the new issue this year.

As borrowing costs rise, more and more Chinese companies are facing Default.

The question is whether China will allow Lehman liquidation, and Chinese executives do not seem to be interested in the possibility of a market panic.

The first breach in March this year is an encouraging sign, but Chinese officials have avoided more defaults since then.

The longer China delays the inevitable default, the more serious the consequences for the world economy.