If Only China Were More Like Japan

Rapid economic growth, an over-reliance on exports, can lead to troublesome bubbles. And national leaders are wise to strengthen institutions that provide economic security against such developments. As China overtakes Japan as the world’s second largest economy, John Lee compares the two nations for Businessweek. During Japan’s heady period of growth followed by a decade of stagnation, Lee explains, the nation engaged in long-term policy planning and strengthened legal, education and political institutions, contributing to widespread prosperity for individual citizens. By contrast, poverty, illiteracy, wage inequality – and incidents of unrest – are on the rise in China. As a result, China devotes a greater proportion of its national budget to internal security than on external threats. Sustainable economic systems allow for peaceful transitions in government. Lee concludes, “The fact that the vast majority of Chinese have missed out on the fruits of economic growth has serious ramifications for social and ultimately, political stability.” – YaleGlobal