> how long can the state afford
> to finance this (spurious) increase in demand? and since the state is
> quickly shedding its ownership role (20 years ago it employed over 90% of
> the workforce; today the number is under 50%), how can it continue to
> increase wages as a whole?
China has $2.7 trillion in forex reserves. Leveraged ten times, that's a potential $20.7 trillion in fresh internal credit (in reality, it will be even more, because the renminbi is appreciating vs the dollar).
Unleash independent unions, and wages will go up. Fortunately, China's workers have one huge advantage over their 19th and 20th century forebears: very high rates of digital connectivity.
-- DRR