On China's low inflation rate: I don't think the comparisons with Japan are relevant because Japan entered a long period of stagnation and industrial decline. Anyone looking at China today would be crazy to call the country stagnating in innovation or industry.
So what's going on? I think the best comparison would be America in the 1870-1890s, when it had a long period of stagnating prices but the economy was still very innovative. Having very low price growth for an extended period is a challenge and anyone who pretends otherwise is lying to you. But we have to move away from the Japanese comparison because Japan's lost decades were also marked by a drastic fall in innovation and/or competitiveness. That's clearly not what is happening here.
At the same time, there also differences with America. The US was a much younger country with an extraordinarily high birth rate and high immigration in the late 1800s. Population growth was booming like crazy, which is not what's happening in China. But if AGI really takes off and robots become commonplace, should we panic about falling birth rates? It's not clear to me that we should. We could also see more novel tech like artificial wombs, clones and even bioengineered babies. I'm not a doomer on demographics.
