Is China heading for Japan-like stagnation?

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Is China heading for Japan-like stagnation? Economist says the worst is likely behind us

• China’s recent economic slowdown is due largely to “premature” withdrawal of policy support, Macquarie’s Chief China Economist Larry Hu said in a report Friday.
  
• He expects policymakers to remain accommodative, paving the way to a broader recovery.
  
• That means while China appears on the verge of Japan-style stagnation, the situation is temporary, the report said.
  

BEIJING — China’s economic recovery from the pandemic is set to broaden, meaning the country isn’t headed toward Japan-style stagnation just yet, according to Macquarie’s Chief China Economist Larry Hu.

China’s recent economic data largely disappointed investors hoping for a sharp rebound in the world’s second-largest economy after the end of Covid controls in December. Youth unemployment hit a record high of above 20% in April.

In a report Friday, Hu attributed the recent economic slowdown to a “premature” withdrawal of policy support after better-than-expected first quarter data.

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