Lessons from two economies

MONEY: GREATEST TOOLS FOR INVESTORS WILL REMAIN ADAPTABILITY AND VIGILANCE

- Francois Stofberg

As 2024 draws to a close, the global economy has delivered its fair share of surprises, challenges, and lessons. Among them, the unprecedented yield inversion between China and Japan's 30-year government bonds stands out as a defining moment.

For the first time, Chinese long-term bond yields fell below that of Japan's—a signal of shifting dynamics in the world's second-largest economy.

For investors, policymakers, and analysts, this moment encapsulates the economic stories of 2024: China's battle against deflation, Japan's slow recovery from stagnation, and the ripple effects on global markets.

China: The dragon slows

China's economic slowdown became this year's most significant narrative. Once the symbol of rapid growth, it now faces structural challenges eerily like Japan's "lost decades." Core inflation hovered at a mere 0.2% in October, echoing the deflationary spiral that Japan endured after its property bubble burst in the 1990s.