Over at Equitable Growth: About every 10 years since 1975, I have forecast a reversion of China's economic growth rate to the standard pattern of hesitant and, at best, slow convergence to the United States frontier. A great deal of China super-growth has seemed to me to be catch-up to the norm one would expect given East Asian societal-organizational capabilities, a norm below which China had been depressed by the misgovernment of the Qing, the civil wars of the first half of the twentieth century, the Japanese conquest, and the manifold disasters of Mao Zedong's Parkinson's Disease. The rest has seemed to me to be due to luck, and to China's ability to apply the standard Hamiltonian gaining-manufacturing-technological-capability-through-exports on a world-historical scale and thus reap economies of scale from the doing. READ MOAR
There thus seems to me to be no secret Chinese institutional or developmental sauce. And China lacks the good-and-honest-government, the societal trust, and the societal openness factors that appear to make for full convergence to the U.S. frontier in countries from Japan and Singapore to Ireland and France. Greece or Chile has thus seemed to me to be China's most-likely future, and it will take quite a while to get there.
I have been wrong four times in a row now.
But I, once again, renew my bet on a major Chinese growth slowdown in the next decade.
We will see how I do...
Is China’s Growth Miracle Over?: "Despite the slowdown, there are several reasons for optimism...:
...China’s existing allocations of capital and labor leave a lot of room to improve efficiency... improved resource allocations could provide a much-needed boost to productivity.... China’s technology is still far behind advanced countries’... total factor productivity remains about 40% of the U.S. level.... China could boost its productivity through catching up with the world technology frontier.... China is a large country, with highly uneven regional development. While the coastal area has been growing rapidly in the past 35 years, its interior region has lagged.... Growth in the less-developed regions should accelerate. With the high-speed rails, airports, and highways already built in the past few years...