China’s economy isn’t becoming Japanified, at least not yet

Is China at risk of turning Japanese? It is a question that has been asked repeatedly over the past decade as analysts and investors worry that China’s economy is vulnerable to the type of crisis that condemned Japan to decades of deflation and stagnant growth following the bursting of its asset bubble in the early 1990s.

More worryingly, a broader and more reliable measure of inflation known as the gross domestic product (GDP) deflator contracted for the fifth straight quarter in the second quarter.