New Delhi, Aug. 24 -- Singer Madonna recently celebrated her 67th birthday with a cake shaped like a giant Labubu toy-signalling, if any doubts still lingered, the arrival of this stuffed toy from China as an icon of contemporary popular culture.

And that, in turn, attests to a structural shift in the Chinese economy, placing it in the league of rich-world economies, even if its per capita income still sits the middle-income bracket, albeit towards the upper end of that income range.

It is not in doubt that China is no longer the low-cost manufacturer of the world, relying on low wages, tremendous scale, and state-enabled superior infrastructure to flood the world's markets with all kinds of goods at prices no one else could match.

The...