Debunking the myth of China’s coming productivity bust

Shanghai, Nov. 26, 2015: Yu Chengdong, Chairman and CEO of Huawei Consumer Business Group, unveils a new smartphone. According to Gartner Inc., Huawei sold the third largest number of smartphones in the world (27.2 million) in Q3 of 2015, after Samsung (83.5 million) and Apple (46 million) (source: dpa)
Shanghai, Nov. 26, 2015: Yu Chengdong, Chairman and CEO of Huawei Consumer Business Group, unveils a new smartphone. According to Gartner Inc., Huawei sold the third largest number of smartphones in the world (27.2 million) in Q3 of 2015, after Samsung (83.5 million) and Apple (46 million) (source: dpa)

We have heard the glib predictions of doom. China is growing increasingly less competitive. Its wages are rising and innovation faltering, landing it squarely in the ‘middle income trap’ that afflicts emerging economies with rising costs as they try to move up the value chain. Though it has poured money into R&D and modern equipment, productivity has stalled. Will this set of circumstances drag down the Chinese economy? It is worth taking a closer look at the accusations made against the Middle Kingdom to see whether they stack up, writes GIS guest expert Professor James Woudhuysen.

There is no smoke without fire. China’s productivity is about one-third of Korea’s. Sales per ...

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