At Seeking Alpha, Dr Craig Pirrong writes:
Japan misallocated capital for years, and is paying the price now. China, through its stimulus programs, showcase projects, and now these efforts to prop up politically connected losers, is also wasting capital on a colossal scale. When originally "invested", this money shows up as GDP, and props up the growth rate. But if that capital is used unproductively, that GDP gold turns to dross.
The Chinese hatred for everything Japanese - a hatred that is waxing particularly hot right now - will likely prevent them from learning something from the Japanese experience. But by failing to heed the Japanese experience, China is running the very serious risk of repeating it.
It is far better to submit to the gales of creative destruction than to attempt to preserve an unviable structure and unviable firms. Japan tried otherwise and failed. China seems intent on making the same mistake.
