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Paper Tiger
by James Rickards Daily Reckoning
The story of China’s explosive growth from 1978 to 2008 is well-known.
China’s GDP surged from less than $150 billion in 1978 to over $3 trillion by 2008. China’s average annual growth rate exceeded 10% from 1978 to 2005. During this period, over 600 million people escaped poverty to obtain at least a stable if low-income standard of living.
Between 2000 and 2008, China became the factory to the world providing everything from simple assembly to textiles to world-class automobiles and laptop computers.
In the 1960s and 1970s, development economists believed that moving an economy from low-income to middle income was a huge challenge, but once middle-income status was reached the path to high-income was just a matter of time.