The story of China's explosive growth from 1978 to 2008 is well-known.

China's GDP surged from less than $150 billion in 1978 to over $3 trillion by 2008. China's average annual growth rate exceeded 10% from 1978 to 2005. During this period, over 600 million people escaped poverty to obtain at least a stable if low-income standard of living.

Between 2000 and 2008, China became the factory to the world providing everything from simple assembly to textiles to world-class automobiles and laptop computers.

In the 1960s and 1970s, development economists believed that moving an economy from low-income to middle income was a huge challenge, but once middle-income status was reached the path to high-income was just a matter of time.

This was called the "takeoff " theory based on the view that it was hard to get a plane off the ground, but once airborne it could soar to almost any feasible altitude in time.

It turns out that theory was completely wrong.