China is not an average country!

Comments on The Economist's Analects - China: "The post-industrial future is nigh", 17/04/2013, http://www.economist.com/blogs/analects/2013/02/services-sector


This argument in this piece relies heavily on the chart by Messrs Ghani and Kharas that is based on the so called world normal using econometric estimate.

The problem, or at least a potential problem with this kind of approach is that the average approach is itself problematic in a very diversified world and the huge differences between countries in many respects of their situations, including their primary productive factors endowment, their education level, their entrepreneurship, theirs sizes, land and so many factors.

Just ask a reverse question: should China follow the average approach how could it be able to achieve its extraordinary economic transformation with such a different speed from the average?

Once one understands this question and its implications, it will not be difficult for one to understand the problem with the average approach.