Ping An CIO: China has tools to avoid ‘Japanisation’

Ping An Insurance’s Benjamin Deng believes it’s going to be a ‘multi-year process’ for China to come out of the current development trough, but it won't be 30 years like Japan.
Ping An CIO: China has tools to avoid ‘Japanisation’

Ping An Insurance Group’s investment chief believes China has tools in the box to avoid the similarly themed “lost decades” of Japan, or so-called “Japanisation”, with its population growth being a deciding factor.

“But will China be immediately coming out of this scenario? I think it's going to be a multi-year process, starting from now,” Chief Investment Officer Benjamin Deng told AsianInvestor in an interview.

Benjamin Deng,
Ping An

He explained that it could take a few years (likely in single digits) for China to come out of the current development trough, and “it’s not going to be 30 years like Japan”.

“One big factor in this bottoming out process is how quickly China can restore growth in its population,” Deng said, noting that throughout history, a county’s economic growth has been driven by the young population.

“If that cannot be structurally shifted, and if China goes down the path of a dropping population and an aging society without reverting that momentum, then the challenge will be much bigger than we can think today.”

China’s population has dropped for two consecutive years — it fell for the first time in 2022, since 1961.

In 2023, its population decreased by 2.08 million, or 0.15%, to 1.409 billion, with a record-low birth rate of 6.39 per thousand, which was similar to Japan’s, with 6.3 new births per 1,000 people in 2022.

China’s working population aged 16 to 59 was 864.81 million in 2023, down 10.75 million from 2022.


Deng noted that today’s China is “quite similar” to Japan in many ways.

These include an increasingly aging population with low birth rates; a “Confucius style” of social governance and corporate governance culture; not being open to immigration; and a low interest rate environment.

Japan experienced “lost decades” with economic stagflation and deflation after the assets bubble burst in the 1990s. During the period, its GDP only grew by some 0.8% per year on average, with assets and consumer prices falling, unemployment rate rising, and an increasingly aging population, which all inflicted serious long-term damage to the economy.

Nonetheless, Deng believed there are a couple of important differences between China and Japan, with the first being the greater size, depth, and diversity of China's economy.

He also named the 56 ethnic groups of China, and the different layers of urbanisation — from top-tier cities to the countryside — meaning different demographics and distribution of wealth, skills, and industries.

“So, for that, I think China has more potential to grow in certain places, while some other places are stalling…But there are a lot of places in China that are very young. So, through the urbanisation process, there's room to grow,” he said.

Meanwhile, Deng noted that the efficiency of China’s policy implementation process is higher compared to Japan. Once the central government decides on certain things, they will be implemented quickly and effectively throughout the country, he said.

Lastly, he noted that China can draw lessons from Japan’s mistakes in the past, to avoid going down the same path.


Ping An Insurance is one of the largest asset owners in China. Its insurance funds investment portfolio stood at Rmb4.64 trillion ($644.7 billion) as of September 30, 2023.

Looking into 2024, Deng thinks there is a good chance that the economy will be "doing fine".

China’s GDP growth stood at 5.2% in 2023. Deng estimated that the growth rate will also be above 5% in 2024, driven by consumption, infrastructure, and exports.

On the crisis in China’s property sector, Deng predicts there will be isolated cases where certain companies, especially small developers, run into liquidity issues, but the impact will be “less and less” to the macroeconomy.

“There will be no systemic crisis,” he said.

Deng thinks infrastructure, including the replacement of old energy systems by renewables, will be one of the key growth poles in 2024.

Another impetus will come from sales of electric vehicles and household electronic devices as China’s urbanisation continues.

China is also going through a structural change in the export industry, where for instance some factories are being moved to Southeast Asia and Mexico. Deng noted that the country is trying to upgrade its position in the global supply chain and become a main exporter of new energy equipment like solar panels and wind turbines.

“So, we think the macroeconomy will be OK for 2024 and should be better in 2025 and the next couple of years,” Deng said.

He added that there is room for more rate cuts, while the central government will put more emphasis on fiscal stimulus to support the economy.

These include lowering tax rates for companies, and more bank loans to small and medium-sized enterprises.

In the long term, key drivers of China’s economic growth will be establishing new sectors or new industries, Deng said.

It could be clean energy-driven manufacturing, sales of electric vehicles and home appliances, and localisation of the power supply, referring to local supplementary power sources to reduce reliance on the national grid.

“These are new things in the investments that we are picking up,” Deng said. “Will they become a major driver for the economy? Hard to say. But the power storage is something quite big today.”

“It's a large country, large economy. You can always find opportunities,” he said.

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