Pretending "always" for anything related to China, you can be sure their elaborate history will prove you wrong.
Not really, there's 2 middle income traps:
1) the ACTUAL trap / thesis - countries fail to educate / upgrade workforce enough to move up supply chains to generate high income employment to bring up income, the TRAP is lack of advancement, to which PRC is basically the LEAST trapped country in the world, pursuing industrial development in all high end sectors. Issues is PRC being highly developed in every sector = still not enough high end jobs for 1.4B people.
2) the economic middle income trap, for last few years, PRC consisitly a foreskin (low single %) below world bank definition/revision of upper income, people need to ask why that is? IMO it's because PRC DOESN'T WANT to be definitionally upper income to play up developing status, and lose related perks. It would be absolutely trivial for PRC to revaluate FX by a few % and cross nominal USD high income and take a huge victory lap, but they don't.
The reality is "hiding strength" is going ot be increasingly hard with time - PRC per capita is being brought down by 600m low income. The TLDR is bottom 4-5 quantiles, i.e. 40% very undereducated population who got left behind during modernization and generates about only ~5% of GDP. They skew old and will eventually phase out of stats (die) in next couple decades, and numerator is going to be increasingly high educated new cohorts working high income. Low/high income divide is largely generational, the future educated populations are going to be in disproportionately high income high skill jobs i.e. PRC is replacing 200m subsistent farmers with 200m tertiary workforce. If most of the 2 bottom quantile dies by 2050, PRC per capita will nearly double to medium high income simply doing nothing, with PPP to rival upper-high income if they hold on to production. Short of unforseen catastrophe, it's statistic inevitability.
That's without mentioning FX, i.e. PRC securing enough economic clout = eventually ability to flex the FX lever to multiply nominal GDP faster than actual growth.
>people die off and take their lead in manufacturing
Unlikely, those 600m are subsistent farmers (something like 200m households), informal workers etc... they are not in manufacturing or anything advanced, where advanced is literally ability to do basic arithmatic, aka this cohort was never in a position to be retrained for manufacturing. To put PRC manufacturing in perspective, I think at height, PRC manufacturing employed "only" 300m. Now they're acquiring RoW combined in automation (industrial robots) and uptraining skilled workforce to hold onto manufacturing / dominate in high end, i.e. that lead is likely set to grow. The bodies problem is basically most new gen wants to degrees and air conditioned office jobs instead of blue collar work. There's plenty of bodies to fill factories (see youth unemployment stats) but incentives/culture not aligned for vocational work.
Those 600m bluntly are just... excess people who don't meaningfully contribute to modern economy i.e. 200m farming households can be replaced by 20m advanced farmers with automation, but PRC agriculture not broadly automated specifically because farming is massive jobs program. Well except construction, hence PRC building spree now, where labour is plentiful and cheap. IMO this is basically PRC's happy accident - many wanted hukou reforms to increase equality, but really what CCP did was create a massive structural class disparity that enables 1) arbituaging very cheap labour for low end work 2) have that low end workforce be easily supported because it doesn't cost very much to provide for them. Also why PRC focuses on production side (industrial capacity)... need to build so much shit to economies of scale than make goods cheap enough for bottom quantiles. Which also happens to translate into global competitiveness for all markets, including emerging / low income ones like bottom PRC 40%.
>US is already at the top and continues to absorb the best people
Remains to be seen, huge % of US S&T talent came (past tense) from PRC, and now education exchanges are being cut off. Which is secondary to the fact that @60% and increasing tertiary that bias STEM, with like 200m new borns in the past 25 years in the pipeline, PRC simply has too much talent for US to meaningfully brain drain. US projected to increase population by 40m in next 30 years. US would have to train every new born, and every immigrant to be STEM to match PRC output, that's not counting the other 80m where percentage will go into some other high skilled field, just not explicitly STEM. Hence the talent generation gap is projected to be absurd in PRC's favour.
That an PRC academic institutions have caught up and increasingly, PRC's cream of the crop stay in PRC. This isn't the 90s where many PRC diasphora were top of their class from a small academic system that trained only a few, where every brain drained hurt. Increasingly, west is a dumping ground for PRC kids who couldn't hack it in tier1 PRC institutions (didn't score enough on Gaokao) but with parents that have enough resources to send them abroad... meanwhile the Chinese B & C teams are still crowding a lot of western labs to drive US/western innovation. The TLDR is PRC's high skilled demographic divident is projected to be so large that it unlikely to be meaningfully constrained. And for strategic competition, that's the demographic trend that's important to consider especially in next 60-70 year time frame, i.e. almost 2100s, since that's how long those new brains will be in the workforce.
The constrain / challenge is on PRCs end to generate enough skilled jobs, which will be difficult. But the side effect of surplus skilled labour is cheap labour, and IMO it's better to have too much talent than not enough for strategic goals, i.e. PRC is only actor projected to not have semi conductor talent shortage in next 10 years.
- Definition of this is 12,000 2011 USD, BLS says thats 17,600 2024 USD. Looking like 2024 closes at a little under 13,000 24 USD. If we calculate out the 6% CCP standard GDP growth rate, it'd take 5 years
- GDP is not very likely to grow at the formerly-real 6% per year moving forward. Population peaked, trade is now a tailwind instead of a headwind, GDP per capita at 13,000 is 0.5x Russia and 2.5x India, and we're in year 2 of a deflationary crisis that's barely being held off, if it is, and is characterized by an significant oversupply in housing stock that'll take years to run down. So I'll tack on 2 years, make it 7 years, 2031.
Those millions of unemployed youth didn't go through the gaokao to work in a BYD factory, it's the "useless" white collar jobs that everyone wants but there is short supply of. And the often unpredictable clampdowns on those industries don't help.
I feel like it's more of a case of how do they get out of it, rather than avoid falling into it, at this point. The demographics are shit and the country isn't particularly attractive to immigrants, nor (unlike, America and Canada, and honestly most of Europe, despite what the right wing say) do they really have room for more immigrants.
I mean it's probably fair to call it the consensus opinion, so a claim as extraordinary as calling it "clear nonsense" probably requires extraordinary proof?
"The pace of growth of domestic coffee chains has been impressive in the past year. Luckin’s performance has been especially strong. It has proved sceptics, who once saw its ultra-cheap coffee prices and high costs as a flawed business model, wrong this year. Luckin Coffee’s operating margin hit 15.3 per cent in the latest quarter as net revenues rose more than 40 per cent to $1.5bn, adding to annual sales that nearly doubled last year. It opened 1,400 new stores in the latest quarter, bringing its total to 21,300. Meanwhile, signs of the pressure are showing with same-store sales at Starbucks down 14 per cent in China last quarter."
"Automation, a rapidly growing trend in the local coffee chain industry, is helping margins during a time when costs are rising, especially delivery, sales and marketing expenses. Cotti, which has grown rapidly since it was founded in 2022, is pushing out coffee-making robots. Luckin has fully automated pour-over coffee machines. Luckin’s coffee robots and unmanned coffee shops were key to maintaining growth during the pandemic."
https://www.ft.com/content/5f070e18-3249-4bec-999b-56535cf25...
And you would be hard pressed to find anyone middle aged or older that actually drinks any coffee.
But the TLDR is it's the quality of workforce not the demographics that drives productivity and growth. JP TFR went below 2 in mid 70s, their economy has grown by 2000% relative to Yen. Same with SKR, TFR went below 2 in mid 80s, economy grew by 2500% relative to KRW... the sauce? Skilling up relative % of workforce to compete on higher end / higher value / higher paid industries. The current limitation with both these countries is they're small, relative to PRC, they've maximized human potential, reaching around 80% skilled workforce, basically the ceiling, they can no longer generate surplus enough talent to compete past limit.
PRC went >2 TFR in 90s, but they have so much people that they're still at 20% skilled workforce, the academic reforms to churn out tertiary only put in place ~10-15 years ago, their headroom is still very high. As in generating OECD+ in skilled talent combined per year. They're on track to add more STEM in the next 25 years (birth cohorts already predetermined) than US will add people (birth and immigration inclusive) - they're on track to have 2-3x more STEM than US total. Meanwhile their catchup in last 10-15 yeras was basically going from fraction of skilled talent to ~parity with US. The TLDR is PRC is in process of undergoing the GREATEST "productive" demographic divident in recorded history, and competitors are not remotely close. Will PRC reach ceiling like JP/SKR with >2 TFR, of course, but not until way past 2050s when they reach 80% highskilled workforce and can't replace at parity. And realisitally that's also a PRC who is multiple times larger than it is now (not 2000% but substantial).
If the full demographic argument is PRC will eventually demographically collapse, likely after most of us are dead, and growing multiple times current size because they generated a workforce larger than west can compete with... then that's going to make people shit bricks.
For reference entire PRC lol demographics narrative was popularized by Zeihan... who keeps forgetting the politics in geopolitics, i.e. US has most deep coasts for ports... except PRC dredges and builds the most productive ports; US has most naturally navigatable waterways, except PRC builds out / maintain their internal waterways with signifiantly more utilitzation. US has immigration... except at PRC scale, even shit TFR properly directed is more talent than US can realistically compete with. 4:2:1 pyrmaid? Yeah kind of PIA... except highest household savings rate in the world, and large regional CoL disparity means you can dump a lot of retirees in nice inland retirement cities one day where they cost fraction to upkeep but still maintain relative good QoL, better than what they grew up with. There's a lot of arbitraging opportunities. And in cases of upper quantiles, that 4:2:1 turns into wealth transfers to the 1 gen to start families.
What PRC does offer countries that want to catch up is access to cheap capital goods and cheap energy infra. Something PRC had to pay premium for while climbing ladder. It will be up to respective countries to arbituage accessible PRC capital and global demand to build up their industrial base... while opportunity lasts. Issue is we're in era where labour saving technology = more difficult to uplift via mass manufacturing employment and potential for export led growth is going to be increasingly limited as surplus importers try to reconfigure their own trade blocks.
But on the other hand 80% of the world , well 60% excluding PRC is consider middle income and poorer. So there is still substantial room to increase global consumption and accomodate new entrants, especially in non strategic / non zero sum sectors, it just won't be easy. Which is ultimately the limitation, a lot of underdeveloped countries don't have much competence in nation building and no ones going to do it for them. In strategic sectors, i.e. sectors where most countries can't support indigenously, or would take generations to build out (like having your own 200k aviation base that need 300 million population bloc to support), what PRC is going to offer is cheaper access relative to western incumbants. Hence PRC and west fighting zero sum in these sectors, with PRC trying to wrestle away western share, and west trying to protect their share. But the result should be more choice, cheaper choice.
IMO that's the cynicism behind PRC strategy, they will sell countries the tools to uplift themselves on the cheap, expecting most can't, while offering those that couldn't fallback/access to unparallely cheap goods, because PRC will simply have stupendous competitive advantage from being able to coordinate a lot of talent and a lot of robots across a lot of sectors linked by a lot of supply chains.