Should-Read: Michael Spence: The Global Economy’s New Rule-Maker

Should-Read: Michael Spence: The Global Economy’s New Rule-Maker: “Not too long ago, many pundits doubted that China could make the shift… to a service economy underpinned by domestic demand… https://www.project-syndicate.org/commentary/china-in-the-global-economy-by-michael-spence-2017-08

…But even if China’s economic transition is far from complete, its progress has been impressive… offloading its labor-intensive export sectors to less-developed countries with lower labor costs… shifted to more digital, capital-intensive forms of production, rendering labor-cost disadvantages insignificant….

As a result of these changes, China’s economic power is rapidly rising. Its domestic market is growing fast, and could soon be the largest in the world. And because the Chinese government can control access to that market, it can increasingly exert its influence in Asia and beyond. At the same time, China’s declining dependence on export-led growth is reducing its vulnerability to the whims of those who control access to global markets. But China does not actually need to limit access to its own markets to sustain its growth, because it can increase its bargaining power by merely threatening to do so…