Chinese economist and government adviser Bai Chongen said China has more room to expand than Japan did in the 1990s, arguing that the country is still a middle-income economy with “massive headroom for growth.” [1]
Bai, who is dean of Tsinghua University’s School of Economics and Management and vice-chairman of the All-China Federation of Industry and Commerce, said China has less in common with Japan’s post-bubble slump than many observers think. “The fundamental difference is our stage of development. We are still a middle-income country; Japan was already a fully developed, high-income economy when its bubble burst,” he said. [1]
He said Chinese companies have the drive and capacity to keep expanding, and that China is particularly strong at turning ideas into products that can be sold in the market. “That is exactly what China excels at,” Bai said. [1]
Bai also pointed to the country’s size as a key advantage. He said China is a demographic giant and that its population is more than 10 times larger than Japan’s, which gives innovation and commercialization more scope to produce scale gains. “In a megamarket, innovation yields significantly higher returns and commercialising technology generates greater economies of scale,” he said. [1]
His remarks framed China’s growth prospects as a function of both development stage and market size, in contrast with Japan’s experience after its asset bubble burst. [1]
