The export sector in China crowds out much of China's economy. Goods and services every year could have been devoted to military and social spending. However much of China production frontier is already being bid off by its exporters. Much of China's military and social growth could have been much larger if its exporters were not so successful in being able to allocate scarce industrial and human resources towards their own personal endeavors.
The production frontier is finite. There can only be so much physically available for guns, butter and exports. And when the export lobby is just so powerful, a lot of guns and butter simply does not get produced.
Is China aiming to become a nation of shopkeepers? Shopkeepers are cowards. They should never run the country.
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