KEVIN DRUM draws attention to an analysis of catch-up growth episodes by Stuart Staniford, which suggests that the Eichengreen-Park-Shin paper on growth slowdowns is too pessimistic about China. Mr Staniford writes:

To try to get a better grip on the situation, I did two things. Firstly, to formalize the instinct that the US has been at/near the productivity frontier at most times, I expressed every country's GDP/capita as a fraction of the US value in the same year. Then I started kicking countries out of the sample, unless they met the following criteria: they started out the sample clearly less productive than the US (I took less than 60% as my threshold), and ended up significantly more productive, relative to the US, than they had started out. Ie, we want countries where it's somewhat plausible that there's a story of underdevelopment, period of rapid catchup, followed by slowing growth once the country is a fully developed country with modern capital infrastructure and levels of productivity.

And Mr Drum summarises the findings:

Long story short, Stuart produced the chart below, which suggests China can keep growing at a fast pace until its per capita income is somewhere in the $25,000 range, which is probably still 15-20 years away. I don't have the chops to adjudicate this, but I thought it was worth highlighting a contrarian opinion anyway. China might very well slow down in the next five or ten years anyway, since it faces multiple constraints (resource scarcity, productivity limits, demographics), but the $17,000 limit is just a guess, and you should probably put some fairly large mental error bars around it.

So, a few points. First, it seems a little unfair to call the $17,000 threshold a guess. What the authors did was assemble a sample of growth episodes and determine when the probability of a growth slowdown was highest. They helpfully provide a chart of the distribution of slowdown events:

As you can see, there are experiences in which rapid growth persisted well after per capita output hit $17,000, but these are not the norm. The six high-income outliers shown above are, in order of ascending income, Puerto Rico, Japan, Hong Kong, Ireland, Singapore, and Norway (included despite the indication that oil-exporters are excluded). The only large, populous, manufacturing-oriented economy in the bunch is Japan, and I'm not sure that China hopes to emulate the Japanese experience.

Second, the $17,000 figure is not the only guidepost for which the authors find a significant probability of slowdown. They also identify a ratio of per capita output to the leader of about 58% to be important, as well as a share of manufacturing in total employment of 23%. On the first measure, as Mr Staniford indicates and as the authors acknowledge, China has a way to go. Hard data aren't available on the second, but extrapolations from previous data releases suggest that China is at or close to the manufacturing employment threshold. So, two of the three indicators point to a near-term growth slowdown for China.

Finally, the Eichengreen-Park-Shin paper tests which economic variables have a significant influence on the probability of a slowdown. They find that a high level of trade openness is helpful in delaying a slowdown, and they attribute the anomalous performance of places like Hong Kong and Singapore to this factor. Factors that bring forward the moment of deceleration include a high old-age dependency ratio, an undervalued currency, and an extremely low level of consumption in output. China suffers from these afflictions in spades (though to be fair Japan did as well, but again, China would probably prefer to avoid Japan's ultimate growth fate).

Obviously, China is a unique case, and one simply can't be sure how the above factors will affect its economy. If I had to guess, I would say that by mid-decade China's growth rates are likely to slow from over 9% a year to something like 6% a year. And I would further say that what happens to China's economy after that will depend a great deal on how its financial and political systems handle that slowdown.