[starfallg]

China is rapidly heading towards the middle-income trap. All of the positioning in the past decade is in the hope of avoiding it. This is a massive challenge as the prosperity of the upper classes is based on cheap labour. All of the advanced economies overcame this by moving jobs up the value chain. China can't easily to do this due to its massive population, a large part of not very well educated. There is a real risk of social instability when semi-skilled jobs dry up.

[dragonelite]

I 100% believe that the main reason a country stays stuck in the middle income trap is its capability to create high tech IP which the nation can use to suck up what I would a global rent for lending out its IP.

That why the patent system is so toxic for the global south its like cutting off the steps on the value chain stair.

[throwaway4good]

10 years ago people were also chatting about China being caught in the middle income trap because China was unable to create its own global brands and original products, and was destined to be a cheap factory for western brands forever, never would be rich enough to have an internal market.

Today we have global brands like Xiaomi, Huawei, Tiktok in every corner of the planet.

And there is just going to be more of it.

[starfallg]

Middle income trap doesn't have much to do with global brands. It has to do with whether there is enough capacity to absorb excess labour when economic growth necessitates transition away from agriculture and manufacturing to service and information industries.

Export driven growth is also very risky as geopolitical issues (as we can see now with Huawei) can happen on a dime. In order to develop China up to western standards, the world needs to supply resources for a population well over all the western countries (EU+US+CANZUK+Asian Tigers) combined. All of the countries that have achieved had good relationships with their importing trading partners, China on the other hand is moving in the opposite direction due to political reasons.

[throwaway4good]

The point is it hasn’t happened and it doesn’t happen. Employment is high, internal consumption is growing, companies climb up the value chain etc.

Instead predicting that it is going to end abruptly tomorrow, the intellectual powers of commentators would be better spent on explaining why it continues and why it has continued for so long.

[starfallg]

> The point is it hasn’t happened and it doesn’t happen. Employment is high, internal consumption is growing, companies climb up the value chain etc.

All of which are beside the point. It is the type of jobs that are available and their relative value. Internal consumption needs to effect a shift in the economy towards services, which isn't happening. Off-shored high-tech manufacturing is moving away to more political acceptable countries.

>Instead predicting that it is going to end abruptly tomorrow, the intellectual powers of commentators would be better spent on explaining why it continues and why it has continued for so long.

Mainly because they created an unequal system with capital controls and ownership rules to siphon foreign capital and IP. This is supercharged by an hyper aggressive business environment and in general large appetite for risk, leading to sky-high asset prices, which is a concern for advanced economies, but much more of a concern for a developing one.

[dragonelite]

When I visited family in the Philippines every dam mall or street market I visited you saw Oppo, Vivo, Huawei and Apple stands. It was kind of a shock compared to here in western Europe.

And from what I can gather Chinese EV car brands are now just entering the European markets. The EV car market has pretty much has been a hard reset of the car industry where new players and old player need to duke it out. Its kind of exciting as someone with a Asian background to see so much happening in Asia to the point im planning on using the next 3~5 years to learn to read and listen to spoken Chinese. Just so I don't have to see it all through a western politically and racially biased lens.

[starfallg]

What's important is high-value jobs. You need these to transition excess labour away from unskilled and semi-skilled jobs. The key is creating and sustaining these jobs.

Obviously tech is a part of this, but also financial services as well as resource/energy industries. IP is less of an issue than it first seems, it's the ability to execute in a market that is more important.