Is China heading for stagnation as property slump goes Japan’s way in a deja vu crisis

China’s real estate assets are facing the risk of a protracted pricing decline, if Japan’s experience in dealing with its own property bubble and more than two decades of economic stagnation are anything to go by, analysts said.

The spectre of a real estate crisis blowing up to become a full economic crisis in the world’s second-largest economy looms large, as household consumption and investment are likely to take a severe blow and the fiscal resources of the government are also limited because the funding crunch in the property segment also impacts land sales, a major source of revenue, according to Natixis Corporate and Investment Banking.