The world appeared to change on Nov. 15, the day bold and epochal reforms were unveiled that promised to overhaul one of the world's biggest economies. Analysts, investors and historians alike rejoiced at the audacity of the plan.
That was Japan. On Nov. 15, 2012, Shinzo Abe, then one month away from becoming prime minister, pledged "unlimited" stimulus and the kind of supply-side policies for which investors had long been clamoring. A year later, the buzz is gone, and not a single structural reform has been implemented. Abe's record should give pause to those now rushing to praise Xi Jinping for a Chinese reform document that is as vague as it appears bold.
Granted, the comparison between Japan and China is an imperfect one. The two countries have vastly different political systems and levels of per capita income, not to mention different challenges to overcome. But they've followed similar development paths, with China now facing the same dilemma Japan did in the 1970s — how to lessen a dependence on exports and excessive investment and promote consumption-led growth. More important, both leaders face tremendously powerful vested interests that are intent on thwarting their most critical reforms.