China is not heading toward Japan-style stagnation because the government is behind the latest property slump, Yao Yang, dean of an economics department at a top Chinese university, told reporters in late September. Not only does that imply recent sluggishness is temporary, but China’s high savings rate, artificial intelligence applications and renewable energy prowess signal the country’s longer-term potential, he said. “I think we should compare China to Japan in the 1970s, because after the Tokyo Olympics in 1964, Japan entered a period of fast economic growth … which lasted for 30 years,” Yao said in Mandarin, translated by CNBC. He heads the National School of Development at Peking University As bold as the claim sounds, Bernstein took a similar view in a Sept. 29 note titled “The Long-View: ‘Japanification’ of China? — Not really.” Despite similarities to Japan in the 1990s — such as an aging population and poor consumer confidence — China today bears many differences, wrote Rupal Agarwal, director and Asia quant strategist at Bernstein. For example, China’s urbanization rate in 2022 was 64%, the same as Japan’s back in the 1960s, she said, noting Japan’s urbanization rate in the 1990s was a much higher 77%. China is also leading in innovation based on research and development spending as a percentage of sales, the report said. “While there are no easy and quick fixes to China’s economic challenges, we believe there are still ample levers to bring back broad-based recovery,” she said, noting those include increased urbanization and central government assistance on local government-led debt problems. Easier said than done, especially since that debt and urban development are linked to a struggling real estate sector that’s accounted for about a quarter of China’s economy. While Bernstein’s Agarwal didn’t have stock picks in her Sept. 29 report, she shared some buy-rated Chinese stocks in a separate report that month — high growth names still cheap relative to five-year valuations. Here are three of the stocks on the list, which didn’t include price targets: BYD — Bernstein lists the mainland China-traded shares of the Chinese electric vehicle giant, which is on its way to becoming a global exporter of cars. Shares are down by about 7.5% for the year so far. Estun Automation — Shezhen-listed Estun sells robots and components for factory automation. The stock is up nearly 2% for the year so far but trading at about half its record high reached in 2021. Meituan — the Hong Kong-listed Chinese food delivery giant has suffered along with the rest of the Hong Kong market this year, with a 38% decline. The company reported a 33% year-on-year surge in second-quarter revenue and swung to profit from a loss during that time. Economic analysis and market projections, however, do remain in the realm of theory. After a summer of mounting worries about China’s growth prospects, KKR’s head of global macro, Henry McVey, made yet another trip to the region . Versus his visit earlier in the year, this time people had a better understanding of property problems, he told me in an interview Thursday. He added that the further away consumers moved from the zero-Covid period, the higher their confidence. “For me, personally, this was a really important trip because I got a much better understanding of how the economy is changing, more of the structural drivers,” he said. He pointed to China’s push to reduce carbon emissions and increase the integration of tech in the economy — such as through automation. Those two broad categories of “green” and “digital” economy are growing rapidly and contributed 1.6 percentage points and 3.1 percentage points, respectively, to China’s GDP growth last year, versus the 3.7-percentage-point drag from real estate, according to KKR estimates published last week. China’s GDP rose by 3% last year, under pressure from Covid-related restrictions that ended in December. Citi in the last week revised up its China GDP forecast to 5% for the year, around the national target. — CNBC’s Michael Bloom contributed to this report.