Think of China as a continent, not as one national economy
While rich regions' growth rates may slow, poorer provinces still have plenty of catching up to do before they approach the middle income trap
We've heard a lot in recent months about how China is in danger of falling into the middle income trap.
But there's a problem with these warnings. They treat China as if it were a single country. But in economic terms, China looks more like an entire continent.
In case you missed it, the middle income trap is shorthand for the collapse in growth rates that afflicts some emerging economies once they reach a certain level of development.
The examples cited most often are in Latin America. In the 1960s and 1970s, economists predicted great things for fast-growing economies like Brazil and Argentina, forecasting they would reach developed status within a decade or two.
They never made it. In the 1980s their growth evaporated amid the Latin American debt crisis. Today, incomes in the big Latin American economies are still less than half those enjoyed by the developed world.
Now pessimists warn that something similar could happen in China. For the last 30 years China has been able to generate high growth rates simply by playing catch-up with the rest of the world.