It is not too difficult for poor nations to become less poor. Becoming rich is much harder. This middle income trap might now be about to slam shut over China.
>>Both China and the Americas have a bit over one billion inhabitants. Latin America is twice as populous as North America (USA and Canada), just as rural China is twice as populous as urban China
China also has the virtue of being a single, unified language block, while the Americas are divided into three major blocks. Even Brazil being a Spanish-speaking country instead of a Portugese-speaking one would help the whole somewhat unified market thing.
I suspect the sharp difference between urban and rural is fairly common. Looking at the United States, industrial urbanization could be said to have started in the late 1800s but really only was completed during the "move to the Sunbelt" of the 1970s. I've read that in 1960 around 1/3 of housing units in the US still didn't have indoor plumbing.
I have some doubts about the "middle income trap" phenomenon being a real thing, or at least, a surprising thing. Wikipedia states the middle income zone is $1k to $12 GDP/capita in 2011 dollars. In order to cross that zone in 50 years, the economy has to grow at 23%/yr! Also, there are difficulties measuring the GDP of any country other than the US, given currency fluctuations and varying prices of various commodities. So one would have to take measurements decade-by-decade to average those out. You might make a useful (publishable?) project by accumulating the data needed to make a good test of it.
I've also wondered if the fundamental limitation on development is capital accumulation. The idea being that given the current world GDP only a certain amount of capital will be accumulated per year and thus the amount of "development" that can happen per year. Depending on their policies, countries can compete to see which country undergoes that development, but it is a fixed-positive-sum game. I have read that during critical phases of industrialization, both Japan and South Korea implemented policies both to increase capital accumulation by suppressing consumption and to prevent locally accumulated capital from being exported.
My numbers are wrong, the middle income zone is $1k to $12k GDP/capita, and crossing that zone in 50 years requires steady growth at 5%/year. That's less insanely high, but no country has ever achieved 50 years of 5% real growth that I've ever heard of.
OK, this I can believe. I've lived with incomplete plumbing before; so long as you have something like a sink, you can draw and store water. Still, if 35% lacked complete plumbing, there's an implication that many of those did indeed lack *all* plumbing.
Geographical cognitive sorting is something that happens everywhere. I bet Oberlin has a higher average IQ than neighboring Ohio towns. Often this is masked by attracting both the high and the low tails which is how you end up with gentrified and ghetto neighborhoods in the same city.
Maybe the difference in China is that the hukou system keeps the low tail from forming roots in first tier cities.
I don't know whether I would use the word "good enough governance" in one sentence with "China" recently. If you are comparing with the rest of the Third World, sure, but that's not a great contest; Russia too seemed to be governed well enough in the early 2000s if one squinted. Recent years have convinced me that authoritarian structures in a semi-democratic government, if left unchecked, eventually overgrow the whole system. Many Chinese apparatchiks might be individually intelligent, but if the main incentive in their career is to suck up to Xi Jinping, their intellects will be used to that very aim.
And of course the well-worn stereotype about Chinese lack of creativity still holds true, despite their advances in using CRISPR and AI. Can you come up with a field of science or industry that the Chinese (the ones living in China, not the 2nd generation ones in the USA) have *pioneered* rather than scaled-up (often by cutting corners) or slightly tweaked? (TikTok = (Instagram + Youtube) / 2.) This would be grossly unfair as a swipe at the Chinese nation (not their fault America is sucking in their most creative and independent-minded people; ask the Nordics), but it spells nothing good for the near future of their country.
That's true, but I doubt China will gain much from it. Many Westerners are now loathe to go there. Here is a good longread by an ex-expat: https://danwang.co/2022-letter/ ; some of it is personal but I suspect most Westerners will have the same general reaction (I certainly do).
The countries I'd expect to profit from American brain drain are European countries (if they don't smother it in red tape), Latin/South America (to the extent they can get reasonably stable governments), Southeast Asia (if China doesn't mess with it too badly) and perhaps the Mideast (under optimistic prognoses, when the main conflicts are resolved).
I agree that China has recently been a prime example of why democracy is good for governance. When the man at the top makes the wrong decision there is no one there to correct it, and the whole country suffers. But in the article I was thinking more of the nuts and bolts type of governance. China might have made the wrong decision on lockdowns but it still says a lot about their state of governance that they were able to implement their severe and prolonged shutting down of society with minimal fuss and interference. No other developing nation would have been able to carry through with something like that. Many developed nations would probably have stumbled somewhere in the process too.
Ah, sure, they are good at scaling, whether it is building skyscraper projects or locking their exit doors. But this kind of skill, lacking the appropriate flexibility and reactiveness, is probably one of the things that get a country stuck in the middle income trap. Maybe high-income countries are both industrious and open-minded whereas middle-income ones are one but not the other.
I'm not eager to give China points for being able to "carry through", though. Recent years have shown that populations all over the world tolerate totalitarian and highly disruptive actions by the governments much better than we thought. Russia and Iran should have collapsed 5 times over the last 5 years if common Western optimism was true. Instead, we are seeing emigration, escapism and cope. I would also have expected a much stronger (and less unfocussed) immune reaction against authoritarian lockdowns in the West.
Well... I agree that *checks and balances* are good for governance. But I think miserable, backward China and even his psychotic younger brother, North Korea, will both outlast the democratic movers and shakers in the West. China may have earned unimpressive marks across his entire report card for the last hundred years, but success for large societies, just as for individual students, is often decided simply on the basis of your worst score.
Mao should have reformed the writing system. Communist revolution is the time to do it! Out with the imperialist old and in with the people's alphabet. Tragic missed opportunity. A simpler writing system would improve China's GDP instantly, if not for the time it takes to learn.
China has pinyin, a perfectly useful latinization of the Chinese language developed in the 1950s which I assume all literate Chinese are fluent in. The Chinese still learn and prefer to use their traditional characters. I do not know exactly why they stick around with an inferior writing system, but I suspect the reasons are very similar to why Americans stick around with an inferior measuring system.
I was in China in the mid '70s. Pinyin was widely displayed though not used eg I don't remember Mao's Little Red Book being in Pinyin. Maybe it was like Esperanto, just a little too 'foreign' to everyday life.
My knowledge of China is always a bit shaky. But I think that pinyin is used as the main method for communicating with Chinese computers. And as such it should be used more or less daily by the vast majority of Chinese. But apparently this has not spilled over into ordinary usage yet (that I know of).
> This theory of different evolutionary tracks for rural and urban China rests on the assumption that there was only limited genetic exchange between the Chinese cities and the Chinese countryside. I have no idea if this was the case (it seems far-fetched).
I don't find it far-fetched. Given the vertical norms of classical Asian societies, it would be easy to maintain even within a homogeneous society. But moreover, China isn't homogeneous. There is an ethnic component to the economic divide within China; wealthy regions are overwhelmingly Han, and rural areas are non-Han. See https://link.springer.com/article/10.1007/s12076-020-00260-3
As a final note, I suspect that a missing ingredient to go from middle to high income is trust. The Chinese government handles things in a clumsy and authoritarian way, especially lately. For an example of where I'm getting my perceptions, see https://quillette.com/2023/01/28/beijing-in-retreat/
When I wrote that it was far-fetched I was thinking of the situation in Europe where it would indeed be far-fetched to talk about high barriers between town and country. But the fact is that I have no idea how it would play out in China. I do know some things about European history but I know next to nothing about Chinese history. Which always makes me hesitant when it comes to drawing conclusions.
In China, wealthy regions might be overwhelmingly Han, but poor regions are also overwhelmingly Han. China is, simply put, an overwhelmingly Han country. China's two poorest provinces are Gansu, in central China, and Heilongjiang, in the far northeast. Both provinces are overwhelmingly (more than 90%) Han. The western and southern regions where most of the ethnic minorities live might not be rich like the coastal cities, but they are not poor either compared to other Chinese rural areas.
And I am also very impressed by the seeming ease with which you produced a data-heavy article in what can not have been much more than an hour. As a comparison, this article took me 8-10 hours to write. I can clearly learn a thing or two from your productivity.
>>Both China and the Americas have a bit over one billion inhabitants. Latin America is twice as populous as North America (USA and Canada), just as rural China is twice as populous as urban China
China also has the virtue of being a single, unified language block, while the Americas are divided into three major blocks. Even Brazil being a Spanish-speaking country instead of a Portugese-speaking one would help the whole somewhat unified market thing.
China's population structure will also make the next few decades interesting... the median age in China is now greater than the U.S., https://www.wilsoncenter.org/blog-post/median-age-china-surpassed-united-states
What is the level of mutual intelligibility between the languages/dialects of China compared to that between Spanish and Portuguese?
I don't know but I think the answer is relevant. And not necessarily given by the way we happen to categorise the linguistic space.
I suspect the sharp difference between urban and rural is fairly common. Looking at the United States, industrial urbanization could be said to have started in the late 1800s but really only was completed during the "move to the Sunbelt" of the 1970s. I've read that in 1960 around 1/3 of housing units in the US still didn't have indoor plumbing.
I have some doubts about the "middle income trap" phenomenon being a real thing, or at least, a surprising thing. Wikipedia states the middle income zone is $1k to $12 GDP/capita in 2011 dollars. In order to cross that zone in 50 years, the economy has to grow at 23%/yr! Also, there are difficulties measuring the GDP of any country other than the US, given currency fluctuations and varying prices of various commodities. So one would have to take measurements decade-by-decade to average those out. You might make a useful (publishable?) project by accumulating the data needed to make a good test of it.
I've also wondered if the fundamental limitation on development is capital accumulation. The idea being that given the current world GDP only a certain amount of capital will be accumulated per year and thus the amount of "development" that can happen per year. Depending on their policies, countries can compete to see which country undergoes that development, but it is a fixed-positive-sum game. I have read that during critical phases of industrialization, both Japan and South Korea implemented policies both to increase capital accumulation by suppressing consumption and to prevent locally accumulated capital from being exported.
My numbers are wrong, the middle income zone is $1k to $12k GDP/capita, and crossing that zone in 50 years requires steady growth at 5%/year. That's less insanely high, but no country has ever achieved 50 years of 5% real growth that I've ever heard of.
> I've read that in 1960 around 1/3 of housing units in the US still didn't have indoor plumbing.
That's a striking claim; do you remember where you read it?
Here are the Census figures: https://www.census.gov/data/tables/time-series/dec/coh-plumbing.html https://www2.census.gov/programs-surveys/decennial/tables/time-series/coh-plumbing/plumbing-tab.txt
In 1950, 35% of housing units "lacked complete plumbing". By 1960, the number was down to 16%.
OK, this I can believe. I've lived with incomplete plumbing before; so long as you have something like a sink, you can draw and store water. Still, if 35% lacked complete plumbing, there's an implication that many of those did indeed lack *all* plumbing.
Thanks for chasing this down, Worley!
Geographical cognitive sorting is something that happens everywhere. I bet Oberlin has a higher average IQ than neighboring Ohio towns. Often this is masked by attracting both the high and the low tails which is how you end up with gentrified and ghetto neighborhoods in the same city.
Maybe the difference in China is that the hukou system keeps the low tail from forming roots in first tier cities.
I don't know whether I would use the word "good enough governance" in one sentence with "China" recently. If you are comparing with the rest of the Third World, sure, but that's not a great contest; Russia too seemed to be governed well enough in the early 2000s if one squinted. Recent years have convinced me that authoritarian structures in a semi-democratic government, if left unchecked, eventually overgrow the whole system. Many Chinese apparatchiks might be individually intelligent, but if the main incentive in their career is to suck up to Xi Jinping, their intellects will be used to that very aim.
And of course the well-worn stereotype about Chinese lack of creativity still holds true, despite their advances in using CRISPR and AI. Can you come up with a field of science or industry that the Chinese (the ones living in China, not the 2nd generation ones in the USA) have *pioneered* rather than scaled-up (often by cutting corners) or slightly tweaked? (TikTok = (Instagram + Youtube) / 2.) This would be grossly unfair as a swipe at the Chinese nation (not their fault America is sucking in their most creative and independent-minded people; ask the Nordics), but it spells nothing good for the near future of their country.
China may still be losing their talent to America, but America is no longer holding on to the talent they produce themselves:
https://time.com/6140707/americas-brain-drain-economy/
When I talk to my children about higher education, it's never here at home; always abroad. America is a sinking ship.
That's true, but I doubt China will gain much from it. Many Westerners are now loathe to go there. Here is a good longread by an ex-expat: https://danwang.co/2022-letter/ ; some of it is personal but I suspect most Westerners will have the same general reaction (I certainly do).
The countries I'd expect to profit from American brain drain are European countries (if they don't smother it in red tape), Latin/South America (to the extent they can get reasonably stable governments), Southeast Asia (if China doesn't mess with it too badly) and perhaps the Mideast (under optimistic prognoses, when the main conflicts are resolved).
I agree that China has recently been a prime example of why democracy is good for governance. When the man at the top makes the wrong decision there is no one there to correct it, and the whole country suffers. But in the article I was thinking more of the nuts and bolts type of governance. China might have made the wrong decision on lockdowns but it still says a lot about their state of governance that they were able to implement their severe and prolonged shutting down of society with minimal fuss and interference. No other developing nation would have been able to carry through with something like that. Many developed nations would probably have stumbled somewhere in the process too.
Ah, sure, they are good at scaling, whether it is building skyscraper projects or locking their exit doors. But this kind of skill, lacking the appropriate flexibility and reactiveness, is probably one of the things that get a country stuck in the middle income trap. Maybe high-income countries are both industrious and open-minded whereas middle-income ones are one but not the other.
I'm not eager to give China points for being able to "carry through", though. Recent years have shown that populations all over the world tolerate totalitarian and highly disruptive actions by the governments much better than we thought. Russia and Iran should have collapsed 5 times over the last 5 years if common Western optimism was true. Instead, we are seeing emigration, escapism and cope. I would also have expected a much stronger (and less unfocussed) immune reaction against authoritarian lockdowns in the West.
Well... I agree that *checks and balances* are good for governance. But I think miserable, backward China and even his psychotic younger brother, North Korea, will both outlast the democratic movers and shakers in the West. China may have earned unimpressive marks across his entire report card for the last hundred years, but success for large societies, just as for individual students, is often decided simply on the basis of your worst score.
Mao should have reformed the writing system. Communist revolution is the time to do it! Out with the imperialist old and in with the people's alphabet. Tragic missed opportunity. A simpler writing system would improve China's GDP instantly, if not for the time it takes to learn.
China has pinyin, a perfectly useful latinization of the Chinese language developed in the 1950s which I assume all literate Chinese are fluent in. The Chinese still learn and prefer to use their traditional characters. I do not know exactly why they stick around with an inferior writing system, but I suspect the reasons are very similar to why Americans stick around with an inferior measuring system.
Fun fact: When I looked up pinyin on Wikipedia just to make sure it was institutionalized by the communists I saw that the inventor of pinyin was one Zhou Youguang (https://en.wikipedia.org/wiki/Zhou_Youguang). the fun fact about him is that he lived until 2017, dying at an age of 111, placing him just outside Wikipedia's list of oldest men: https://en.wikipedia.org/wiki/List_of_the_verified_oldest_people
I was in China in the mid '70s. Pinyin was widely displayed though not used eg I don't remember Mao's Little Red Book being in Pinyin. Maybe it was like Esperanto, just a little too 'foreign' to everyday life.
My knowledge of China is always a bit shaky. But I think that pinyin is used as the main method for communicating with Chinese computers. And as such it should be used more or less daily by the vast majority of Chinese. But apparently this has not spilled over into ordinary usage yet (that I know of).
> This theory of different evolutionary tracks for rural and urban China rests on the assumption that there was only limited genetic exchange between the Chinese cities and the Chinese countryside. I have no idea if this was the case (it seems far-fetched).
I don't find it far-fetched. Given the vertical norms of classical Asian societies, it would be easy to maintain even within a homogeneous society. But moreover, China isn't homogeneous. There is an ethnic component to the economic divide within China; wealthy regions are overwhelmingly Han, and rural areas are non-Han. See https://link.springer.com/article/10.1007/s12076-020-00260-3
As a final note, I suspect that a missing ingredient to go from middle to high income is trust. The Chinese government handles things in a clumsy and authoritarian way, especially lately. For an example of where I'm getting my perceptions, see https://quillette.com/2023/01/28/beijing-in-retreat/
When I wrote that it was far-fetched I was thinking of the situation in Europe where it would indeed be far-fetched to talk about high barriers between town and country. But the fact is that I have no idea how it would play out in China. I do know some things about European history but I know next to nothing about Chinese history. Which always makes me hesitant when it comes to drawing conclusions.
In China, wealthy regions might be overwhelmingly Han, but poor regions are also overwhelmingly Han. China is, simply put, an overwhelmingly Han country. China's two poorest provinces are Gansu, in central China, and Heilongjiang, in the far northeast. Both provinces are overwhelmingly (more than 90%) Han. The western and southern regions where most of the ethnic minorities live might not be rich like the coastal cities, but they are not poor either compared to other Chinese rural areas.
Then what do you think of... THIS?
https://thingstoread.substack.com/p/are-han-regions-wealthy-regions
I stand corrected.
And I am also very impressed by the seeming ease with which you produced a data-heavy article in what can not have been much more than an hour. As a comparison, this article took me 8-10 hours to write. I can clearly learn a thing or two from your productivity.
My article was
* A mere two-minute read,
* Directly responding to a single, simple detail in your well-researched post,
* In a way I've done literally a hundred times before, and
* No children, animals, or wives interrupted me
So the lesson is just that short posts can be made with speed and confidence if you lean very hard on specific skills you've mastered.