The China growth model — moving farmers into factories and selling their products to the world — is no longer driving miracle growth. Over the past couple of decades, export-oriented manufacturing lifted hundreds of millions from poverty, giving rise to a period of dramatic economic expansion. But that playbook, is less and less able to generate the returns poorer countries need to raise standards of living. (Click here to read the full story in Bloomberg Businessweek.) Automation is spreading, replacing workers with robots. Supply chains have fragmented as war tears through Ukraine and the Middle East. Post-pandemic inflation and higher interest rates have pushed once-promising nations like Ethiopia toward default. And tensions between the US and China are reshuffling trade patterns and inspiring protectionist policies. Read More: China Asks Carmakers to Halt Europe Expansion Over Tariff Spat Compared to two decades ago, manufacturing today makes up a smaller portion of global economic output — and China already accounts for more than a third of it. Add the next dozen countries into the mix and there's little room for places still looking for a way in. That means dozens of nations have no clear route to building wealth. What comes next? Economists broadly agree on one thing: Growth is likely to be hard-won in the future. Diversification is key. Countries can no longer rely just on manufacturing. They should branch into services — a broad category covering everything from computer coders to pedicurists — and consider protectionist policies as the old rules of globalization shift and change. - On this episode of Bloomberg's Voternomics podcast, we discuss former US President Donald Trump's self-proclaimed favorite word: tariffs. While mainstream economists warn that hiking taxes on certain imports is bad for business, not everyone appears to be of the same mind.
Related Reading: —Kai Schultz and Shruti Srivastava in New Delhi Click here for more of Bloomberg.com's most-read stories about trade, supply chains and shipping. |
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