China’s middle income trap

Cross posted from Investing in Chinese Stocks

The People’s Daily is out with the official word:

In USD, the world’s per capita GDP has more than ten thousand US dollars. Of course, many low-income countries are “being average”. The high per capita income from the ceiling of the $ GDP11000 still lags far behind, thus “middle income trap” risk still exists. Success beyond this trap, is China’s “Thirteen Five” period of development final exam, is building a moderately prosperous society must pass through one.

…From the direct cause of the need to promote economic growth, “Troika car analysis. ” 2011 to 2013, consumption, exports to our economic growth rate continued to decline, particularly by the international financial crisis affecting the world economic downturn, the export contribution rate even dropped to negative, the contribution rate is only increasing investment . 2014 and the first quarter of 2015 the situation has improved, consumption, export growth and the contribution rate has increased, but investment alone big situation has not fundamentally changed. Coupled with the law of diminishing marginal investment returns play a role, the role of investment-led economic growth continued to decline, resulting in downward pressure on the economy continue to grow.

The main underlying causes are the following: First, the transformation of the mode of economic development is lagging behind. Mainly rely on investment-led economic growth, investment mainly for the “iron-based”, resulting in steel , crude steel, cement and other in the last 30 years to achieve a high-speed growth of two to three times, resulting in extensive epitaxial expanded reproduction unsustainable development enhancements .

Second, the economic structural imbalances. Heroes of GDP and investment-driven economic development, most likely to lead the project, the investment battle, repeated introduction, redundant construction, structural imbalances, excess capacity causing economic decline. Third, the demographic dividend attenuation, labor costs increased. Since reform and opening, the new GDP, about 1 / 4-1 / 3 is the creation of new work, thanks to changes in population age structure demographic dividend “golden age” offer. 2010, 15-64 working age population accounted for 74.5 percent of the peak, the dependency ratio fell to 34.2% of the lowest value.

But crossing the inflection point, an opposite trend appears, the proportion of working age population decline, the dependency ratio rises. In this context, economic growth will naturally decrease. Fourth, the shortage of tightening resource bottleneck, approaching the upper limit of the ecological environment. A direct consequence of the extensive development mode, consume a lot of natural resources, scarcity intensified rapidly increasing dependence on foreign energy resources, ecological carrying capacity overwhelmed.

One of the plans is to improve “population quality.”

ed to mention that, in the working-age population is supplied across the Lewis turning point, the investment plus unlimited supply of labor after the end of the development model, to improve the population quality, achieved by conversion into the demographic dividend bonus to personnel in a prominent position, is to improve labor productivity and economic efficiency.

I read that as being as eugenic as it sounds. China is spending a lot of money on genomic research and the hunt for genes that influence intelligence.
iFeng: 人民日报:中等收入陷阱风险仍存 经济减速合乎规律

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  1. On eugenics. There have been very few states in history that have any interest in a more intelligent population. They want an ignorant mass of state dependants.

    • innocent bystanderMEMBER

      maybe back in the days of battalions of infantrymen, but now they have robots and drones and too many mouths to feed

  2. sydboy007MEMBER

    It will be very interesting to see how hard the vested interests push back against the reforms China needs. They only have to look to straya to see just how effective they can be. It’s amazing how people can so easily be lead to believe something against their interests is actually of benefit to them. See it all the time with people who vote for the republicans in the USA.

    As for the eugenics, I’ll start to panic when the Chinese roll out Dr Singh or Soong. Perhaps stray can help with building the S. S . Botany 🙂

  3. “resulting in extensive epitaxial expanded reproduction unsustainable development enhancements”


  4. Hah !….I often thought that gene warfare would be the ultimate way to attack someone who could overwhelm you on the field of battle. Any geographically separate land is vulnerable to gene warfare, it would just be slow but with depleting sperm counts, the attack vector would be places with large assisted reproductive industries. You wouldn’t even know until it was too late.

  5. casewithscience

    It is inevitable that humans will use genetic technology to improve themselves. The difficulty is that natural reproduction is relatively straightforward (albeit, it does go wrong) and interfering with those processes can lead to systemic and catastrophic problems, including some that do not appear in morphology such as sterility, acceleration of hayflick limits, increased susceptibility to cancer, etc. These are all problems commonly resulting in the phenotypes of engineered species. For instance, the sprague-hawley rat (common lab rat) has 1/3rd of the life span of a standard brown rat, because the genes coding for their distinctive albinism also result in organ failure, particularly breakdown in integrity of the eyes (ie – they pop).

    Any reliance by China on genetic technology to create a workforce in the next 50 years is fantasy. The Chinese are only now catching up to what we, the US and the Koreans were doing in the 1990s. Even if they catch-up through copying, their academic and research infrastructure is still quite weak for various reasons. It is difficult to implant an 800 year old tradition into such a large economy overnight. Peer review and creativity appear to be quite constrained within their systems. Accordingly, the prospect of the Chinese getting to the position of tech-leader is pretty doubtful. Even Tsinghua and Peking (their equivalents of Oxbridge) are well outside of leading any particular fields. By comparison, Australia has 7 universities in the top 100 worldwide by research impact, China has 3 (QS Research Rankings). The primary fields of impact for Australia are pharmacy, bio-chemistry, astronomy, geology and medicine (ie hard sciences). The primary fields for China in terms of academic impact is philosophy. Also, the highest rank in life sciences achieved by a Chinese university is #73 at Peking University.

    All that said, if they want to pay Australia or Korea to design some really top notch humans in about 2035, I am sure we could do it.

    • Seems your view of China is a little out of date. Beijing Genome Institute (BGI) is the biggest fish in the genomics pond.

      • casewithscience

        Nah, Mediocritas, I assure you I am current.

        BGI is largely funded by Western companies (through service arrangements) and uses techniques developed in California, which they purchased from a US tech firm. No new sequencing or assembly techniques have come from them, they are a cheap source of doing established types of work (basically an assembly line). They have some workforce, but the essential elements for creating new methods (innovation) just simply aren’t there.

        BGI also haven’t succeeded in assembling artificial RNA or DNA, which the US, Europeans, Koreans and Australia all did in the mid-2000s. I also note they purchase all their sequencing machines from the US and haven’t yet been able to manufacture their own (though I am sure some reverse engineering will be going on). As I said, the Chinese are way behind in gene tech.

        If I were to take a bet, I would wager the Indians are further along in bio-tech than the Chinese.

      • Japan and South Korea used to just knock everything off too, being renowned for cheap and low quality. Then we outsourced enough manufacturing, they reverse engineered and learned, next thing you know they’re leading innovators. Same thing is going on in China:


        They’re trying to go head-to-head with Illumina. Doesn’t matter if the IP originated in the USA, the Chinese are taking it, modifying it and innovating.

        They’re the clear leader in quantity and they’re catching up fast in quality.

  6. CRISPR/Cas9 people.

    Genomic modification with precision that could only be dreamed of just 4 years ago. Now the standard in all molecular genetics laboratories and already being used to repair human genetic diseases (amongst other things).

    Doesn’t take Einstein to dream up a way in which a bioweapon could be engineered that uses a racially targeting Cas9 guide sequence. If large States are not already working on these then I’m a monkey’s uncle.