Elephant in a Cage Why China has a Hard Time to Advance to the Group of Rich Countries?

This paper examines the structural and political-economic constraints that limit China’s long-term prospects for convergence with advanced economies. Using the metaphor of an “elephant in a cage,” the study highlights how market reforms unleashed growth but remain restricted by state control. The analysis traces China’s economic trajectory from the Maoist command economy to decades of market-oriented reforms, while emphasizing persistent challenges such as excess savings, financial repression, capital market distortions, real estate instability, capital flight, and demographic decline. It argues that these constraints, combined with authoritarian governance, significantly hinder China’s ability to achieve per capita income levels comparable to G7 nations. The paper concludes that while overall GDP parity with the United States may be attainable, genuine convergence in living standards will remain elusive without deeper institutional reforms and the establishment of rule of law.