Aging populations, as Japan taught us, are inherently deflationary. Folks in their 70s don’t spend the way 20-somethings do. With the unemployment rate for Chinese between 16 and 24 stuck above 17% —or higher given the vagaries of Beijing’s data—what good will subsidies and rebates do?

China's bond yields have plunged to all-time lows in recent weeks, drawing parallels to Japan's "lost decades," a long period of economic stagnation.