But you see, say the Western economists, China’s emphasis on manufacturing production and investment in infrastructure and technology over increasing household consumption is the wrong model for development. According to neoclassical (and Keynesian) theory, it’s consumption that leads growth, not investment.  So China needs to break up its too large state sector, cut taxes for private enterprises and deregulate to allow the private sector to expand sales of consumer goods. 

But has the large consumption share in the Western economies led to faster real GDP and productivity growth, or instead to real estate busts and banking crises?  And is it not really the case that more productive investment boosts economic growth and employment, and thus wages and spending, not vice versa?  That is the experience in China over the last 30 years, with high growth and investment delivering rising wages and consumer spending.