CN’s Economy Will Keep Expanding, If Only Because It Remains Backward

choi

Bob Davis, An Unexpected Argument for Optimism on China Growth. China Real Time, Oct 17, 2012
http://blogs.wsj.com/chinarealti ... sm-on-china-growth/
("two San Francisco Federal Reserve economists are bullish on the Chinese economy for an unusual reason: its continued backwardness. * * * 'There is an advantage to backwardness, in the sense that a poorer region or nation has a lot of catching up to do before it prices itself out of certain activities,' said Mr Spiegel, explaining his paper")

Note: The blog cites
Israel Malkin and Mark M. Spiegel, Is China Due for a Slowdown?  FRBSF Economic Letter, Oct 15, 2012.
http://www.frbsf.org/publication ... 2012/el2012-31.html
(a) FRBSF = Federal Reserve Bank San Francisco
(b) The summary of the Letter is as follows: "An analysis based on episodes of rapid expansion in four other Asian countries suggests that growth in China’s more developed provinces may slow to 5.5% by the close of the decade. But growth in the country’s less-developed provinces is expected to run at a robust 7.5% pace."

Jump to section 2 "Middle-income traps in other Asian countries" because whatever prediction on China must be based on past performances--in this case, "Hong Kong, Japan, Korea, and Taiwan" (singapore not included). I was interested in what the FRBSF authors had to say about the foursome, and determined if the argument made sense or not.