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Japan's Stock Market Plunges 4,500 Points in Sudden Crash
On August 5th, the Japanese stock market suffered a heavy blow, with the index plummeting by 4,500 points directly.
This inevitably reminds people of the Japanese economic crisis in the 1990s of the last century. Could it be that this crisis will reoccur?
What about China, which faces similar challenges like Japan, how should it respond in the following?
Plaza Accord
In the 1980s of the last century, the Japanese economy grew rapidly. Starting from the "Jinmu Boom" period, the country seemed to have entered an accelerated mode. The gross domestic product soared rapidly, becoming a symbol of quality and confidence, and quickly occupied the global market.
Under the surface of prosperity, there were hidden undercurrents that were not easily noticeable. In 1985, to deal with its own trade deficit, the United States joined hands with several other developed countries to sign the famous "Plaza Accord."
The core content of the agreement is very simple, which is to devalue the US dollar. This is nothing wrong in itself, but for Japan at that time, it became a fatal "poison."
The yen appreciated sharply, exports were hindered, and Japanese companies began to look for new investment directions. At this time, the real estate market was like a huge whirlpool, attracting everyone's attention.
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The concept of "buying a house can make money" spread rapidly. From corporate giants to ordinary people, they were all involved in this real estate speculation craze. The land price in Tokyo doubled in just a few years, and some people even made the wild claim that "one Tokyo can buy the whole United States."In pursuit of profit, banks adopted an unusually lenient lending policy. Complex collateral was no longer necessary; with just a simple application form, one could easily secure a substantial amount of funds.
People who lost themselves in the bubble were bewitched, frenetically buying and speculating in real estate, fantasizing about getting rich overnight.
However, the revelry would inevitably come to an end. In 1989, the Bank of Japan got a new leader—Yasushi Mieno. This financial strongman, later dubbed the "Ghost of Heisei," began a vigorous monetary tightening policy as soon as he took office.
He raised interest rates consecutively, increasing the cost of borrowing, while the government also introduced a series of policies to suppress housing prices. The bubble was mercilessly burst, and the stock and real estate markets collapsed in response.
Once bustling Tokyo became a "ghost city" overnight. Countless businesses went bankrupt, countless people lost their jobs, and countless families were burdened with enormous debts.
The "Showa youth" who bought at the peak had not yet had the chance to savor the joy of wealth when they were forced to swallow the bitter fruit of the bubble's burst.
Among them, some chose to end their lives, seeking relief in despair; others gritted their teeth and persisted, spending the rest of their lives repaying the astronomical loans; and some gave up hope entirely, becoming "Heisei hermits," numbing themselves in a life of low desire.
A "lying flat" society
"We, our generation, have lost the ability to dream," said a Japanese person. Born in the early 1990s, he grew up in the darkest period after the burst of Japan's bubble economy.From a young age, he witnessed how his parents' generation lost themselves in the economic bubble and struggled to survive after it burst. The deep despair and sense of helplessness ingrained in their bones filled him with confusion and fear about the future.
They are different from their parents; they have not experienced the era of rapid economic growth and prosperity, nor have they held hope for the future. Growing up in an environment of economic stagnation and social class rigidity, they see no opportunity for change.
He says that today's young people in Japan no longer work tirelessly like their parents did, striving to buy a house or a car. They place greater emphasis on their personal quality of life, seeking spiritual fulfillment rather than material enjoyment.
They are unwilling to get married and do not plan to have children because the future seems unimaginable to them. Rather than bringing children into this hopeless world, they prefer to not give them a chance to be born at all.
Although this statement may sound pessimistic, it truly reflects the feelings of young people in Japan today. They have chosen a "low-desire" lifestyle, rejecting the temptations of consumerism and pursuing a simple, comfortable, and free state of living.
This attitude towards life has been termed the "Heisei Parasite" phenomenon by some sociologists. They believe it is an inevitable result of changes in social structure following the collapse of Japan's bubble economy.
During the prosperous period of the economic bubble, Japanese society advocated "seniority-based ranking" and "lifetime employment," where young people could achieve stable income and promotion opportunities, and ascend the social ladder through hard work.
However, after the bubble burst, Japanese companies, in an effort to reduce costs, abolished "lifetime employment" and adopted "non-regular employment." They had to frequently change jobs, and their income became unstable.
As a result, they turned away from reality and embraced a "low-desire" lifestyle. They turned away from reality and embraced a "low-desire" lifestyle.
We are not without dreams; it's just that these dreams have been defeated by reality. A Japanese netizen wrote this on a forum. His words may represent the voice of many young Japanese people.Can China Break Free from the "Heisei Dilemma"?
Japan's "Lost 30 Years" has sounded a warning bell for China. It tells us that the harm of a bubble economy is enormous, and once it bursts, it will bring an unbearable cost to the entire society.
In recent years, China's real estate market has also shown signs of overheating, with housing prices soaring and speculation rampant. How similar this is to the situation in Japan at that time!
To curb the rapid rise in housing prices, the Chinese government has also introduced a series of regulatory policies. The concept of "housing for living, not for speculation" is becoming more and more deeply rooted in people's hearts.
However, to truly avoid a predicament similar to Japan's, relying solely on policy adjustments is far from enough. More importantly, fundamental structural reforms must be carried out.
We need not only to change the economic development model and not continue to rely on real estate to drive economic growth, but also to vigorously develop the real economy and enhance scientific and technological innovation capabilities, thereby achieving a healthy economic cycle.
At the same time, it is necessary to reform the income distribution system, narrow the wealth gap, and allow more people to share the fruits of economic growth. This will fundamentally alleviate social anxiety and enhance people's confidence in the future.
The most important thing is to strengthen the construction of the social security system, so that people have a place to rely on when they are old and have medical care when they are sick, which can truly alleviate people's worries and make them dare to consume and invest, thereby promoting the sustained and healthy development of the economy.
The phenomenon of "Heisei hermits" in Japan is also worth pondering. The younger generation in China is also facing tremendous life and mental pressures. High housing prices, high prices, involution, lying flat... These keywords all reflect their inner anxiety and confusion.
How to create a more fair, just and hopeful social environment has become an important challenge of our times. We cannot expect all young people to become "strivers", nor can we force them to pursue "success".The author believes that everyone has the right to choose their own way of life, and we should respect their choices, understand their difficulties, and strive to create a more inclusive and diverse social environment for them.
Despite differences in national conditions and stages of development between China and Japan, both countries face similar challenges. How to break out of the "Heisei Dilemma" and avoid the "Lost 30 Years" are questions that our generation must seriously consider and answer.
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