-China should learn from Japan's lost decade -former official
(Corrects last year of Zhou's governorship in 6th para)
By Tom Arnold
LONDON, March 12 (Reuters) - China needs to learn lessons
from Japan's lost decade to ensure the world's second-largest
economy does not suffer similar problems, former central bank
governor Zhou Xiaochuan said on Tuesday.
Debt levels in China are too high, although the Chinese
government is taking steps to try to de-leverage the economy,
Zhou said in a speech at Chatham House in London.
"Japan had very fast development and later then a so-called
lost decade," he said. "The Chinese economy may have a similar
over-leveraged problem, and we need to absorb the knowledge and
lessons from what happened."
The lost decade refers to the period of economic stagnation
in Japan that began in the 1990s.
China's gross domestic product last year expanded at its
slowest pace since 1990, while corporate bond defaults hit a
record high and banks' non-performing loan ratio notched a
Zhou, who was the central bank governor from 2002 to 2018,
making him the longest serving in that post, said he hoped high
levels of household savings could be funnelled into supporting
the development of the equity market, although China's gross
savings rate would likely slip from around 45 percent of GDP to
40 percent or lower in the future.
China would continue its financial sector reform and further
open its markets to foreign investors, enabled in part by the
increasing internationalisation of its currency, the yuan, he
"After so many years China is much more confident to have
further reform and open-door policy," Zhou said. But he
acknowledged the pace of some reforms had been too slow and
further overhauls were needed to help develop capital markets
and revamp the pension system.
Expressing hope that China's trade war with the United
States would ease, he said: "We stand for free trade and
investment and multilateralism."
The governments of the world’s two largest economies have
been locked in a tariff battle as Washington presses Beijing to
address longstanding concerns over Chinese practices around
technology transfers, market access and intellectual property
(Reporting by Tom Arnold
Editing by Frances Kerry and Leslie Adler)
© 2019 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.