But that's manufacturing capacity it doesn't have for technology is also doesn't have. To get it will either take buying it in at international prices (in $), or take take world class investment in technology, training, manufacturing capacity etc. Having cheap rice and roads will help a bit, but it won't come close to closing the gap with the US. To do that they would need to effectively become the US, or something like it and as a result their domestic cost advantage would evaporate. You don't get to move from being a third world country with a third world cost base to being a first world country and keep your third world cost base. The two go hand in hand. That's why Chinese manufacturing is beginning to lose it's price advantages over places like Vietnam and Mexico.
> China is becoming international standard technology. Its mercantilist strategy has paid off since it has become the manufacturing hub of the world.
China has a very long way to go before it becomes a technological rather than manufacturing powerhouse. Assembling high tech iPhone components made in the USA, Japan, Taiwan and South Korea will only get you so far. The value added to an iPhone from assembly in China is only about $10. The same goes for many other high tech goods 'manufactured' in China.
They are moving up the value chain of course, that's why their cost base is rising and hence actualy their PPP advantage is beginning to erode. Japan, South Korea and Taiwan did the same thing, but China are still a very long way from the top.
> China just started buying $400 billion in gas from Russia in RMB though
Russia is desperate. They gave in to humiliating terms from China because the post-Crimea sanctions are bleeding their economy out.