Wong recalls how his colleagues spent three years coaxing him to join them in golf and to also buy golf memberships, which cost from US$500,000 each — a hefty sum today, and certainly more so 35 years ago. In addition, there was plenty of speculative activity surrounding golf memberships and a Nikkei Golf Index was even created, part of a series of “hubristic exuberance” observed by him in Japan then. In contrast, Xi banned the Party cadres, government officials, military officers and SOE executives from playing golf more than a decade ago. A hundred golf courses in China built on land acquired via dubious means were shut.
The various market and economic crises over the years have boosted the global reputation of several market commentators including Nouriel Roubini, dubbed the “Dr Doom” for his pessimistic prognosis that had turned true. Richard Koo, chief economist of Nomura Research Institute, gained wider prominence for his “balance sheet recession” thesis which was applied retrospectively to how post-bubble Japan — both corporates and households — focused more on reducing their debt load, than to invest for new growth, leading to the deflationary decades which Japan is only starting to recover from over the past years.
Koo believes that China is too suffering from a balance sheet recession and that big gun stimulus from the government is needed if the country wants to avoid what happened to Japan.
Wong Kok Hoi, CEO and CIO of APS Asset Managment begs to differ. “The Japanification of China”, he argues in a recent paper, is “plainly wrong”. In a way, Wong is uniquely positioned to comment on both China and Japan. After graduating from Hitotsubashi University in 1981 under a scholarship from the Japanese government, he spent his early working years in Japan, where he witnessed the bubble forming — and bursting.
