>Countries can have cutting edge industries AND still lag behind in development - Brazil (Defense, Aerospace, ONG, Automotive), South Africa (Defense), Turkey (Defense, Automotive, ONG), Mexico (Defense, Automotive, ONG), Russia (ONG, Defense, Aerospace, Automotive), Malaysia (Automotive, ONG, Electronics), etc are all countries that are major innovators and even leaders in STEM/innovtion heavy industries, yet still have significant issues with spreading development across their countries.

Again, these countries do not have any innovation advantage in those industries.

Here are actual leaders in those industries:

Aerospace --> USA, EU, UK, Japan

Defense --> USA, EU, China, Israel, Russia

Automotive --> USA, EU, Japan, South Korea, and soon to be China

ONG --> USA, UK

Electronics --> USA, Japan, EU, China, South Korea, Taiwan

Energy --> USA, EU, China

Gaming --> USA, Japan, China

You're confusing having a large industry with leading SUSTAINED innovation.

When was the last time you bought a Malaysian brand electronic? When was the last time you drove a Mexican brand car?

High income countries produce innovation, hence the ability to move up in the value chain, hence moving above middle income trap.

I don't think we're disagreeing that equitable development is a huge challenge for PRC, at PRC scale, but my main point is middle income is not a useful lens to evaluate PRC, because 1) it's arbitrary cutoff that PRC is going to pass sooner than later 2) stupid large countries operate on different dynamics/expectations. It's even very not useful to lump 32M malaysia together with 200M Brazil let alone 1400M PRC.

> BY DEFINTION

Conceptually middle income trap is about countries stops moving up value chain and income gets stuck in middle income levels. It's a dumb blunt indicator that has no bearing on equity of development. If country has 100 Tony Starks making 20Trillion dollars in GDP of wizard widgets, while 1.4 billion subsists on crippling poverty but GDP per capita is above middle income, then congradulations, that country has escaped the middle income trap and all the wizard widget would categorize it as an advanced economy even if 99.99% of the impoverished people starves. Techncially if PRC is stuck at +$1 above middle income, it has escaped the trap, but the real question is weather PRC can continue moving up value chain and build competitive comprehensive national power, even at the cost of extreme inequity, not how/whether such equity can be addressed, which obviously is still important consideration for policy makers.

On that note PRC per capita gdp is set reach upper income this year, if not already even with revised slow growth numbers. Official CCP stats is $12,551 for 2021, which will put PRC in upper income of $12,696 with 2% growth this year. If you entertain the Shanghai police leak demographic extrapolations seriously, PRC today has 100M less people and entered upper income years ago. Meanwhile PRC is climbing value chain rapidly in essentially every sector, it's not specializng in a few, like the mid sized countries, but issue is, PRC simply has too many people for everyone to be lifted into upper income range. The difference with Malaysia/Mexico/Turkey/Russia/Brazil is on paper, extrapolating from recent Asian Tiger and other historic medium size country development trends, there should be enough opportunities for middle sized countries of 20-200M to specialize and be competitive in some higher tier sectors and escape the middle income trap.

PRC is not a middle sized country.

My opinion expectation suitable for middle size countries is ridiculous to apply to PRC with 1.4B people where 200M-300M tier1/2/3 workforce (very course guestimate) are already specializing in most sectors + 100s of millions of bullshit makework jobs by SEOs just to keep people busy, while 100s of millions more drift in informal economy. Think of USA with 160M workforce who can do pretty much everything there is to do, except manufacturing, which during peak, PRC employed ~300M. There's simply not enough domestic opportunities or global demand for 1.4B people. A good example is central gov reluctantly holding on to inefficient collective agriculture that employs 450M when realistically mechanization will axe 440M of those jobs and provide better food security.

>MASSIVE legal undertaking

Yes, there's going to be a lot of policy changes and reforms to get common prosperity rolling, or address rural education, vocational training etc. But TBH and blunt, opportunity for education and training has already passed for 100s of millions who are stuck in informal economy. Interior provinces neglected for too many generations. I don't know if they'll be taken care of by safety net or simply neglected - even Xi stressed common prosperity is not about handouts/welfare - but whatever they get, it's unlike to uplift them into upper income. They're never going to experience 25000 per capita China Dream by 2049. I think going forward PRC will remain a 2 tier society, something like gulf state with professional class and migrant labours that goes back to their less developed homes where PPP stretchs further. There's going to be reforms to improve QoL of of the bottom, but the classes are never going to converge. And hot take: CCP probably wants it that way, modern PRC is built and likely can only be sustained by 2 tier society with massive cheap migrant labour pool.