China Risks a "Lost Decades" Spiral, Top Scholars Warn

Leading Chinese scholars are urging immediate government action. Their goal is to stop the economy from falling into a long-term deflation trap, similar to Japan's "lost decades." The warning comes from researchers at a top Chinese university. They say persistent deflation, or falling prices, is a major threat. It can cause a downward spiral where consumers delay spending and companies halt investment. To prevent this, the scholars propose a strict new policy. They want the government to set a formal, binding target for inflation. Making prices rise at a low, steady rate must become a top priority. The experts use Japan as a key example. They describe Japan's long battle with deflation as a cautionary tale. It shows how difficult deflation is to reverse once it becomes expected by the public and businesses. The scholars' call highlights growing concern over China's economic challenges. Their advice pushes for stronger measures to boost confidence and spending.