El-Erian warns of ‘Japanification’ of China

US financial expert Mohamed El-Erian has warned of the ‘Japanification’ of China, as the yield on China’s 10-year bond has fallen below 2 per cent.

In a LinkedIn post, El-Erian stated: ‘It has reached this point in a manner that should worry the Chinese government, leading some analysts to refer to the “Japanification” of China.

Japanification is defined as an economic term referring to a prolonged period of low growth, low inflation (or deflation), and low interest rates within an economy, similar to what Japan experienced after its asset bubble burst in the early 1990s.

Attribution: Amwal Al Ghad English