Here's why China's economy is headed for stagnation, according to Nobel economist Paul Krugman

• China's economy is headed for a slowdown, according to Nobel laureate Paul Krugman.
• Krugman pointed to similarities between China and Japan, which saw its economy decline in the 90s.
• China's future will likely be even worse as the nation faces strong demographic headwinds.

China's economy is headed for a major slump, according to Nobel laureate Paul Krugman.

The top economist compared China's disappointing economic performance so far this year to Japan's economic woes in the 90s, when the nation's economic power began to decline.