China, with a stagnant economy burdened with debt and overcapacity, and slow future growth, is likely to repeat Japan's two lost decades, negatively affecting the US economy and encouraging global currency depreciation, according to economists at a Senate Banking Committee hearing. The hearing was held on Tuesday in Washington as part of an investigation into China's alleged manipulation of its currency, the yuan, which has fallen by more than 20% against the dollar this year.
China, with a stagnant economy burdened with debt and overcapacity, and slow future growth, is likely to repeat Japan's two lost decades, negatively affecting the US economy and encouraging global currency depreciation, according to economists at a Senate Banking Committee hearing. Furthermore, the country is unlikely to become a market-orientated economy since the ruling Communist Party will not be able to transform the economy without social unrest and loss of control.