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1. BRI and MIC 2025 in global growth context
Due to accelerating automation of low-skilled jobs, China will not leave a China-sized gap in the market as it climbs up the value chain - relying on cheap labour to export goods to developed ecomomies won't get as much FDI or revenue
Due to accelerating automation of low-skilled jobs, China will not leave a China-sized gap in the market as it climbs up the value chain - relying on cheap labour to export goods to developed ecomomies won't get as much FDI or revenue
2. That's why it's important to kick-start growth in LEDCs without relying on low value-added exports to MEDCs
Good old Smithian specialisation, given the right infrastructure and education investments and judicious technology transfers, can drive plenty of growth within LEDCs
Good old Smithian specialisation, given the right infrastructure and education investments and judicious technology transfers, can drive plenty of growth within LEDCs
3. If the BRI does what it says on the tin, this is exactly what it is trying to promote - infrastructure and other (semi-)public goods investments to promote regional market integration and specialisation that doesn't rely on self-exploitation for the global rich for a pittance
4. This is also conspicuously what both free markets and developmental aid have failed to deliver - due to a catalogue of textbook market failures (private investors won't gain from positive externalities), and the insistence by the US amongst others on political conditions
5. It might be true that this benefits Chinese heavy industries that would otherwise be starved of demand, and that this gives China more diplomatic cachet, but to oppose BRI on these grounds is to deny the developing world a huge new growth opportunity *just to spite China*
6. In fact, most Westerners have failed to think far enough ahead: growth in LEDCs would not only generate more demand for Chinese goods, but also increasingly in luxury, equipment, and technology markets, in which Western firms are still competitive if not dominant
7. The US's obsession with monopolising the heights of the global value chain to the exclusion of China, putting aside spitful rivalry, makes sense given expectations of anaemic global growth - expectations predicated on what some might call the failures of global capitalism
8. The idea that competition for technological leadership is zero-sum, while pedantically true, ignores that significant growth in developing economies would support a much larger market at the *top of the value chain as well*, which can accommodate China alongside incumbents
9. This is why, in the context of global growth and BRI, MIC 2025, calling for state investment to advance up the value chain, need not be at the expense of incumbents in developed economies
This best case scenario is truly a win-win, for both developed and developing economies
This best case scenario is truly a win-win, for both developed and developing economies
10. Before anyone else tweets this at me, I know, I know
