(Bloomberg) -- China needs more structural reforms to lift parts of the economy that still have the potential to drive growth, a central bank adviser said, while pushing back against comparisons to Japan’s stagnation decades ago.

“China’s current situation is vastly different from what Japan used to be in,” said Liu Shijin, a member of the People’s Bank of China’s monetary policy committee, during a speech at the Financial Street Forum in Beijing late Wednesday. 

He was speaking to concerns over China’s so-called Japanification and claims that the country is falling into a “balance-sheet recession” like Japan did in the 1990s — where households and companies focused on paying down debt instead of spending or investing. Such discussions intensified as the economy lost steam earlier this year, reflecting investors’ growing pessimism on longer-term growth.

Japan’s recession was a result of a lack of new sources of growth, but China still has potential that can be realized by lifting the consumption of low-income groups and promoting emerging industries, Liu said, without specifying the sectors.

While China should maintain easy monetary and fiscal policies to support the economy, such traditional stimulus will only offer the benefit of short-term growth, Liu said. He called for more attention to reforms such as providing equal public services to migrant workers and stimulating entrepreneurship in advanced industries. 

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Liu joins a chorus of prominent Chinese economists in arguing against the Japanification claims. China’s per capita gross domestic product relative to the US is much lower than Japan’s level in the 1990s, and it’s still enjoying a medium-level pace of economic expansion, he said. 

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