In August of last year I put up a post entitled, “Can China, With Its Present Government And Business Structure, Ever Turn Out A Company Like Apple?” I was asking whether a nation that has famously opened countless fake Apple stores could ever create an actual company like the one birthed by Jobs-Wozniak. In the New York Times, the excellent James Fallows wonders similar things in “Can China Escape The Low-Wage Trap?” An excerpt about the downside to China’s meteoric rise:

“Some of the limits and failures are well publicized: among others, the environmental despoliation that has made cancer the leading cause of death in China; the demographic shift caused by the one-child policy that threatens to make China the first society to grow old before it grows rich; and the problems of transparency and accountability in the Chinese governing system, illustrated most recently by the Bo Xilai and Chen Guangcheng cases.

Those, at least, are the problems that get the headlines. But there’s a bigger one, which the Chinese government and public are only now starting to recognize: whether the success of China’s current model is leading toward a ‘low-wage trap,’ in which its outsourcing factories get bigger but don’t necessarily move the country toward the higher tiers of the world economic structure.

PUT differently, will Chinese companies ever go from assembling iPads to fostering future Apples of their own — or, similarly, from selling knockoff copies of Western movies, music, search engines and online apps to establishing China’s own pop-culture industries with worldwide profits and soft-power appeal?

Nearly every Apple product is ‘made’ in China, but barely 10 cents on the Apple sales dollar stay with workers, suppliers or anyone else in te country. The rest goes to designers and shareholders in the United States, component makers in Japan, machine-tool makers in Germany and retailers or shippers around the world. The problem for America with this arrangement is that it disproportionately rewards the top rather than the middle of our income scale. The problem for China is figuring out how to capture more of the rewards to begin with.”