Credits: World Bank ׀ Enlarge |
But that requires that people outside your country buy your low-priced manufactures. And the world has reached a point at which demand for manufactured goods is no longer highly elastic [...] After the 2015 stock market crash, China is likely to have another five, maybe ten, years of very healthy growth. The party can redistribute income from the rich to the middle and the poor and from the coasts to the interior. Mammoth demand from an enriched urban middle class and peasantry can provide business for all of China's factories that otherwise would be selling into an export market with lower-than-expected demand elasticity. The interior can be brought up to the manufacturing productivity standards of the coast (see also HERE)