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President Xi Jinping’s top economic adviser commissioned a study earlier this year to see how China could avoid the fate of Japan’s epic bust in the 1990s and decades of stagnation that followed.

The report covered a wide range of topics, from the Plaza Accord on currency to a real-estate bubble to demographics that made Japan the oldest population in Asia, according to a person familiar with the matter who has seen the report. While details are scarce, the person revealed one key recommendation that policy makers have since implemented: The need to curtail a global buying spree by some of the nation’s biggest private companies.

Communist Party leaders discussed Japan’s experience in a Politburo meeting on April 26, according to the person, who asked not to be identified as the discussions are private. State media came alive afterward, with reports trumpeting Xi’s warning that financial stability is crucial in economic growth.

Then in June came a bombshell: reports that the banking regulator had asked lenders to provide information on overseas loans made to Dalian Wanda Group Co., Anbang Insurance Group Co., HNA Group Co., Fosun International Ltd. and the owner of Italian soccer team AC Milan. While the timing of those requests is unclear, other watchdogs soon issued directives to curb excessive borrowing, speculation on equities and high yields in wealth-management products.

Jim O’Neill Photographer: Simon Dawson/Bloomberg

Jim O’Neill, previously chief economist at Goldman Sachs Group Inc. and a former U.K. government minister, said Chinese policy makers are constantly looking to avoid the mistakes of other countries -- and Japan in particular.

“You see it in repeated attempts to stop various potential property bubbles so China doesn’t end up with a Japan-style property collapse,” O’Neill said in an email. “There does appear to be some signs that some Chinese investors don’t invest in clear understandable ways, but they wouldn’t be the only ones where that is true!”

Read more on China’s debt bomb

The State Council Information Office didn’t respond to a faxed request for comment on the report. On Tuesday, Vice Commerce Minister Qian Keming told reporters that Chinese companies must be prudent in outbound investment in the entertainment, sports, hotel and property sectors.

The moves reflect concerns that China’s top dealmakers have borrowed too much from state banks, threatening the financial system and ultimately the party’s legitimacy to rule -- a key worry ahead of a once-in-five-year conclave later this year that will cement Xi’s power through 2022.

The study was commissioned by Liu He, whose role as director of the office of the Communist Party’s top economic policy committee makes him one of Xi’s most-senior advisers, the person said.

It provides at least one key reason for China’s moves to rein in outbound investment that jumped to a record $246 billion last year. The impact has been swift: Acquisitions abroad tumbled 55 percent in the first six months from the same period in 2016, according to data compiled by Bloomberg.

Japan Warnings

Beyond stemming China’s deal flow, the study also recommended:

A new national law to spell out the rules for overseas investments. Companies currently need approvals from the commerce ministry, the top foreign-exchange regulator and the national economic planning body

Tighter scrutiny by regulators on the long-term viability of overseas investments -- particularly return on assets -- to ensure that risks don’t blow up. It likened Chinese companies to speculative retail investors looking for quick returns on the stock exchange

Ensuring that China doesn’t shift manufacturing overseas before it has a chance to replace those jobs with new value-added industries

The study warned China was in danger of emulating Japan in the 1980s, when it had become a manufacturing powerhouse after years of near double-digit economic growth. It cited Japanese purchases of everything from Pebble Beach golf club to Columbia Pictures to Rockefeller Center in New York as examples of what could go wrong when companies have a strong currency and the ability to borrow cheaply against surging land valuations at home.

The Pebble Beach Golf Links in California. Photographer: Ezra Shaw/Getty Images

China is now moving to ensure its companies don’t repeat those mistakes.

Read a QuickTake Q&A on China’s risk crackdown

Still, even as authorities look to deleverage the economy, the Communist Party remains committed to ensuring annual growth of about 6.5 percent this year to achieve a promise of building a “moderately prosperous society” by 2020, with gross domestic product and income levels double those of 2010. Whether they can both hit that target and curb financial risks is an open question.

“The deleveraging push is serious when it comes to limiting the potential for systemic financial stress in the short-term,” said Logan Wright, Hong Kong-based director of China markets research at Rhodium Group LLC. “But it is less clear that Chinese authorities are truly prepared for the longer-term economic consequences of a financial system growing at a much slower rate in the future.”

— With assistance by Keith Zhai, Jun Luo, and Kevin Hamlin