The process is fraught with challenges. At the beginning of the process, what these countries have to sell to their customers is their relative poverty. Their poverty allows them to sell labor cheaply. If the process works and the workers are disciplined, investment pours in to take advantage of the opportunities. Like the investors, local entrepreneurs prosper, but they do so at the expense of the workers, whose lives are hard and brutal.

It's not just their work; it's their way of life. As workers move to factories, the social fabric is torn apart. But that rending of life opens the door for a mobile workforce able to take advantage of new opportunities. Traditional life disappears; in its place stand the efficiencies of capitalism. Yet still the workers come, knowing that as bad as their lot is, it is better than it once was. American immigration was built on this knowledge. The workers bought their willingness to work for long hours and low wages. They knew that life was hard but better than it had been at home, and they harbored hopes for their children and with some luck, for themselves....

As the process matures, low wages rise -- producing simple products for the world market is not as profitable as producing more sophisticated products -- and the rate of growth slows down in favor of more predictable profits from more complex goods and services. All nations undergo this process, and China is no exception. This is always a dangerous time for a country. Japan handled it well. China has more complex challenges.

Since the Industrial Revolution, there have always been countries where comparative advantage in international trade has been rooted in low wages and a large work force. If these countries can capitalize on their advantages, they can transform themselves dramatically. These transformations, in turn, reorganize global power structures
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The arcs along which nations rise and fall vary in length and slope. China's has been long, as far as these things go, lasting for more than 30 years. The country will continue to exist and perhaps prosper, but this era of Chinese development -- pyramiding on low wages to conquer global markets -- is ending simply because there are now other nations with even lower wages and other advantages. China will have to behave differently from the way it does now, and thus other countries are poised to take its place
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GLOBAL RELATIONS

 

Who Authorized Preparations for War with China? – (Yale Journal of International Affairs – June 12, 2013)

In this detailed analysis paper, the military-policy expert Amitai Etzioni asks, “Who authorized preparations for war with China?” His answer is stark: Mr. Obama has spoken of a “pivot to Asia,” but there has been no political intent or desire to have such an active military confrontation with China – in fact, the politics and diplomacy have been moving in the opposite direction. Nonetheless, the Pentagon has concluded that the time has come to prepare for war with China, and in a manner well beyond crafting the sort of contingency plans that are expected for wide a range of possible confrontations. It is a momentous conclusion that will shape the United States’ defense systems, force posture, and overall strategy for dealing with the economically and militarily resurgent China. Etzioni writes, “The imagined result of ASB (AirSea Battle plan) is the ability to end a conflict with China in much the same way the United States ended WWII: The U.S. military defeats China and dictates the surrender terms.” “AirSea Battle is demonizing China,” James Cartwright, the former vice-chairman of the U.S. Joint Chiefs of Staff, warned last year. A Marine Corps assessment warned that the concept is “preposterously expensive to build in peace time” and, if used as intended, would “cause incalculable human and economic destruction,” in good part because it makes escalation to nuclear war far more likely. And the Chinese have responded in kind: “If the U.S. military develops AirSea Battle to deal with the [People’s Liberation Army],” Col. Gauyue Fan warned, “the PLA will be forced to develop anti-AirSea Battle.” And that is now taking place. Soon after assuming power last year, Mr. Xi abandoned his predecessor’s commitment to “peaceful rise,” took direct command of the Central Military Commission and commanded the military to focus on “real combat” and “fighting and winning wars.” (Editor’s note: This article is a long, very detailed analysis worth your attention, but if you just want the “bottom line”, see U.S. and China Smile for Cameras, Prepare for War.)