Tl;dr -

1. Mass employment via light and low skilled manufacturing will not help provide mass prosperity in 2025. Automation is the name of the game (can confirm in Vietnamese and Indian high value manufacturing as well as Chinese)

2. Work to build a social safety net that complements gig work. An export driven economy is increasingly tenuous in the current climate. Expanding a domestic consumer market by ensuring prosperity reaches the bottom half is what will allow you to build a resilient economy.

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I've ranted about this for over a decade now. Concentrating only on export and industry development while ignoring the need to expand a domestic consumer market either by leveraging higher incomes (highly unlikely) OR a stronger social safety net is the solution to over-production in most cases.

It's an increasingly mainstream view in Chinese economic academia as well, but the Xi admin remains petulantly opposed to what it derisively terms as "Welfarism" ("福利主义典范国家，中产塌陷、贫富分化、社会撕裂、民粹喧嚣，这不乏警示— 防止落入“福利主义”养懒汉陷阱"*) [0].

Li Keqiang was a major proponent of expanding the social safety net due to his early experiences in childhood, but he sadly passed away.

Countries like Vietnam are following a similar approach, and it is not going to end well.

[0] - http://theory.people.com.cn/n1/2021/1116/c40531-32283350.htm...

* - "In a welfare state, the middle class is collapsing, the rich and the poor are polarized, society is torn apart, and populism is clamoring. This is a warning to avoid falling into the trap of "welfarism" that breeds laziness."

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oezi 5 hours ago | parent [-]

As Germany and Japan can attest, export-led growth works great until it doesn't, because you are stuck to suppress wages across the economy to maintain your export edge. You need to also build the internal market and carefully manage the housing market as the central instrument for wealth accumulation of your citizens.

I think the US is unique to realize that they can achieve more by being a consumer spending economy and using run-away housing prices to inflate their citizens wealth (using immigration to increase demand).

	▲	t_mann an hour ago \| parent [-]
		I can see the point re internal market vs export orientation. But why make the housing market the focal point of wealth creation? Wouldn't the stock market be a much more overall beneficial place to let your population accumulate wealth (which the US also does quite successfully, through 401k, cheap and trustworthy financial products like ETFs, a strong SEC,...)? Pushing house prices ever higher comes with so many societal problems, and also with serious financial risks. The start of Japan's lost decades, which you mentioned, wasn't weak domestic demand. It was a housing price bubble so extreme that small areas of central Tokio were worth more than all of California. Domestic demand was actually very strong in Japan up until that bubble burst. The biggest financial crisis in the US in recent memory (2008) was also due to the housing market, its consequences eclipsing that of the dotcom bubble or the 1987 crash. That being said, stock market bubbles are no fun either - the Great Depression of the 1930's was caused by a stock market crash. But at least stocks don't tend to push people into homelessness already while they're booming.