Is China risking Japan-style lost decade?

Otmane El Rhazi from Macro feed.

Despite mounting concerns as China’s real-estate market reverses, don’t expect to see property fire sales, bankruptcies or banks reporting ballooning bad debts. A simplistic argument perhaps, but it appears to have held so far.
Another interpretation is that this is simply denial as China refuses to mark its property assets to market: The trouble will emerge, however, as its hamstrung banks are forced to rein in lending, cutting off their life support to the wider economy.
This was one lesson from the painful aftermath of Japan’s property bubble back in the 1990s, and one which Nomura argues — in a new report — is relevant to China. It says there are now many similarities between China’s property market today and Japan’s two decades ago.

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