The China Thread

[The Minsky Moment]

Japan's Lost Decade is the closest analogue but China is quite a bit bigger and not as far advanced in per capita GDP.  We are in uncharted territory.

[Josquius]

Yeah, Japan busted the middle income trap and found itself trapped instead in a pretty stable self contained comfortable stagnancy.
That's the sort of failure countries dream of.
China is some way off having that safety net.

[The Minsky Moment]

The classic middle income trap are mid-to-largish countries that are more balanced and pursing import substitution strategies: Brazil, Argentina, South Africa.

Export promotion strategies have been pretty reliable in getting over that hump when pursued vigorously.  The trick is such strategies involve scavenging off of consumer demand overseas. Smaller countries (Singapore, Taiwan, even Korea) can get away with that because net global impact is low. Japan was large enough to encounter push back but just managed to break through advanced status before the backlash hit.  China OTOH is so big that it caused significant global impact while still in middle income territory.