ABSTRACT
In addressing the end of "Cheap China" this chapter focuses on three issues. First, the nature of the country's international competitiveness and its economic structure relative to other countries at different levels of development. Second, the nature of Chinese productivity growth and the internal productivity gaps, which create challenges for the next stage of development. Third, the question of whether China has reached the Lewis turning point at which rising urban wages and the exhaustion of surplus rural labour forces economic development to shift away from labour-driven growth and towards greater reliance on capital and technology. Higher labour costs and rising energy prices have significantly chipped away at "Cheap China's" manufacturing cost competitiveness. Following the paths of Korea, Hong Kong and Singapore, China is trying to achieve structural change while re-defining the basis for its competitiveness, in order to move away from "Cheap China" to become a "moderately prosperous society".
