China's real estate crisis looks like Japan's 1990s bust, even without the same banks

A new economic paper compares China's current real estate crisis to Japan's bust in the 1990s. It turns out the two situations look very similar, even though their financial systems are different.

For years, economists focused on how banking systems could make a real estate crisis worse. This paper shows that China's current downturn looks a lot like Japan's 1990s bust, even though their banks are different. It means the crisis could drag on for years through how people spend and invest, not just through bank failures.