The implications of China’s mid-income trap

Three decades ago, China’s annual economic output was about $433bn in current dollar terms, making its economy roughly the size of an Austria or South Africa today.

It is now comfortably the world’s second biggest economy — with current-dollar gross domestic product of $17.7tn — and in the post-financial crisis era it has easily been the single biggest contributor to global GDP growth.

Between the beginning of 2010 and the end…