Is China Slipping into the 'Middle Income Trap'?

[The Economy is Getting Worse]

No, China still has fewer taxes, regulations, and a smaller welfare state than the US. This is indicative for a faster growth environment. Contrary to conventional wisdom, deflation is a good thing - it means a lower cost of living for everyone. We had a lot of deflation in the late 1800s, when our innovation and growth were the fastest.

It is possible that Xi Jinping could screw things up - he implemented extremely authoritarian COVID lockdowns for example which have slowed the economy for the last 2 years.

[The Economy is Getting Worse]

No, China still has fewer taxes, regulations, and a smaller welfare state than the US. This is indicative for a faster growth environment. Contrary to conventional wisdom, deflation is a good thing - it means a lower cost of living for everyone. We had a lot of deflation in the late 1800s, when our innovation and growth were the fastest.

It is possible that Xi Jinping could screw things up - he implemented extremely authoritarian COVID lockdowns for example which have slowed the economy for the last 2 years.

It's hard to have a lot of growth if your population is falling, and I think in practice China is much more regulated -- in the sense that local governments are empowered to take very authoritarian actions against enterprises they dislike -- than the United States.

Have you seen DeSantis? It isn't just China being regulated at the local level. In any case, local regulation is much better than federal, in that there is competition where businesses can move if they don't like the current locality.

Also, what matters more is living standards, which doesn't matter much on population (although a higher population could mean more innovation). Monaco has a small population but high living standards.

[The Economy is Getting Worse]

No, China still has fewer taxes, regulations, and a smaller welfare state than the US. This is indicative for a faster growth environment. Contrary to conventional wisdom, deflation is a good thing - it means a lower cost of living for everyone. We had a lot of deflation in the late 1800s, when our innovation and growth were the fastest.

It is possible that Xi Jinping could screw things up - he implemented extremely authoritarian COVID lockdowns for example which have slowed the economy for the last 2 years.

This is someone who's never been there, doesn't speak the language, has never done any business with anyone from there, and hasn't met anyone from there at any substantial level.

There are state-owned monopolies in oil/gas, telecoms, banking, airlines, tobacco, and many other sectors. Where there aren't monopolies, state-owned enterprises are able to use their connections to selectively enforce regulations against their private sector competitors. Is your private company stealing orders from a state-owned competitor? Watch out: you could be fined for breaking this or that regulation, or worse get jailed for breaking a tax law from 20 years ago. Then there are regulations such as needing approval (not just notification) to move more than $50000 out of the country per year, needing to register a website with the police, needing to allow a Communist Party cell in your company if there are three or more Party members, and so forth.

Hence, one of the dark jokes that circulate is that "we pay taxes like in Scandinavia, we are regulated like in the Soviet Union, we see social inequality like in Latin America, and we enjoy social services like in Antarctica." In short, the worst of everywhere in the world.

Have you seen DeSantis? It isn't just China being regulated at the local level. In any case, local regulation is much better than federal, in that there is competition where businesses can move if they don't like the current locality.

Local governments love to impose or enforce arbitrary regulations without oversight, as a pretext to either extract money or to protect their cronies. Example: regulations - set at the national level - are intentionally vaguely worded to allow for flexibility in enforcement. Local governments then use these as a tool to either selectively levy fines or to push out businesses that are treading on the turf that "belongs" to their cronies. They also control local banks, further tilting the playing field. Also, getting a business license in China isn't as simple as paying a fee and filling out a form - you actually need to schmooze the bureaucrat in charge, who can deny it merely because the business threatens to steal customers and talent from his crony. China is less a single economy than a thousand little economic fiefdoms. Some of them have a genuine understanding of what attracts business, but the emphasis is on some. That's why China's economic geography is increasingly concentrated in a handful of megacities.

And even then, there's only so much the most pro-business local administration can do, if the big boss in Beijing is issuing increasingly erratic decrees.

1.I've been to China before. The costs of things are usually less, and I usually have to fill out way less forms there than here. Maybe you need to visit China yourself to see how much it has changed in the last 40 years, and you will realize that they're doing something right.
2.China's tax rates are lower than the US
3.China has lower regulations than the US. For example,  consider the process of building a high-speed rail. In America, environmental review alone takes 10+ years. In China, it's less than 5 years from planning to finishing construction.
4.Having "thousands of fiefdoms" allows for more competition. Competition picks the more efficient systems over the less efficient systems by allowing businesses/people to vote with their feet, leading to more overall efficiency. Also, having a megacities should be the natural outcome of free market development, as higher population density is more efficient.
5.The US has very high level of state control in the sectors. Yes, the industries aren't nationalized, but it's very far from a free market as well. Consider banking, where the Federal Reserve controls interest rates, and there are regulations such as "Too Big to Fail" (which encourages big banks to take excessive risks knowing that they will be bailed out) and Dodd-Frank. It's also nearly impossible to get in the financial field now; regulations are so strict. For example, you have to basically spy on your brokers.

The US airline system is highly inefficient as well. Usually, qualityof products improve over time, but airlines have been getting squishier and squishier. It's basically an oligopoly - with more competition we wouldn't see last minute tickets be much more expensive. It ties to the banking system, where airlines aren't really making money and basically selling their miles to the bank.