The Risk of a Balance-Sheet Recession and Private-Sector Deleveraging in China Insights from Japan’s Lost Decade
| Main Author: | |
|---|---|
| Other Authors: | |
| Format: | Students’ Scientific Association paper |
| Kulcsszavak: | állami gazdaságpolitika Ázsia fiskális politika ingatlanpiac makrogazdasági folyamatok makrogazdasági összefüggések makrogazdasági politika nemzetközi makrogazdasági politika összehasonlító gazdaságtan pénzügyi stabilitás |
| Online Access: | http://dolgozattar.uni-bge.hu/60453 |
| Abstract: | Against the background of the continuous accumulation of debt and the in-depth adjustment of real estate, China's economic growth has slowed down significantly after 2020, raising widespread concerns about its fall into a balance sheet recession (BSR). Based on Richard Koo's theoretical framework, this study builds three-system interactive models of “finance and real estate”, “state and state-owned enterprise (SOE)” and "society-innovation". And carry out a semi-quantitative comparative analysis of the cases of China and Japan, and systematically analyse China's unique deleveraging path. Research shows that China has shown typical BSR symptoms, such as credit power failure in the private sector, but its adjustment path is fundamentally different from Japan's market-led “passive deflation”, which is manifested as a unique “state-led balance sheet recession”. The analysis reveals that through the quasi-fiscal intervention of state-owned sectors and policy banks, China has systematically transferred the leverage risk of the private sector to the public sector, forming a unique model of “growth but not cleaning up”. Although this model avoids a cliff-like economic decline in the short term, it also brings the long-term cost of delayed reform and the accumulation of structural risks. Therefore, whether it can break the negative cycle between the three major subsystems and vigorously promote structural reform while maintaining stability has become the key to China's avoidance of long-term stagnation. |
|---|