Rather, the problem is that the benefits of growth have failed to trickle down to disaffected youth…. With modern manufacturing underdeveloped, many young workers with fewer skills and less education are consigned to the informal sector. Corruption is widespread. Getting ahead depends on personal connections of the sort enjoyed by the sons of military officers and political officials, but few others.
It may stretch credulity to think that a high-growth economy like China might soon be facing similar problems. But the warning signs are there. Given the lack of political freedoms, the Chinese government’s legitimacy rests on its ability to deliver improved living standards and increased economic opportunity to the masses. So far those masses have little to complain about. But that could change, and suddenly.
via Barry Eichengreen: Wellsprings of Uprisings – Brad DeLong’s Grasping Reality with All Ten Tentacles.
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