Editor's note: David Blair is the author of Eight Reforms: How China Created Transformational Economic Growth, and the vice-president of the Center for China and Globalization. The article reflects the author's opinions and not necessarily the views of CGTN.

Over the past 20 years, China has sharply improved the living standards of its people and at the same time has made huge investments that create transformational opportunities for the future. The coming decades are a time to start harvesting the fruits of the capabilities created for entrepreneurial creativity throughout the country and also for high-value added manufacturing and agriculture.

China has created for itself two huge comparative advantages that can enable it to continue to improve the lives of average people over the next decade. First, rural revitalization and related infrastructure investments have set the stage for a dynamic, innovative, entrepreneurial culture throughout the country. Second, China is in the best position to achieve large productivity enhancements by applying new technologies to the real economy of manufacturing and agriculture.

The nation has gone from poor infrastructure to what is probably the best transport and telecommunications system in the world. Crucially, this infrastructure stretches to small cities, villages and rural areas almost everywhere. Combined with the rural revitalization program that improved the education, healthcare and living conditions of rural and small town citizens, these investments have created the conditions enabling a flowering of dynamic small business culture.

A key fact about innovation is that it is impossible to predict when and where it will happen. A country greatly increases its chances of developing transformative innovation by giving opportunities to all its citizens in all areas. The next great world-changing idea could come from anywhere, not just from a small number of people concentrated in a few research centers.

Think of the brothers Orville and Wilbur Wright, who developed the airplane. They had only high-school educations, worked as bicycle mechanics and builders, and lived in the relatively small and isolated city of Dayton, Ohio. But, they had the skills and dynamism to see the key problems of airflow control and solve them by continuous tinkering. In contrast, Harvard professor Samuel P. Langley, who received a lot of public attention and government investment, failed to solve the problems. Of course, the ideas and innovativeness of the Wright brothers were unique to them, but another key factor was the spirit of dynamism that characterized the American Midwest at the time. As an American, it worries me greatly that that dynamic spirit seems to be gone now.

Very few people can change the world the way the Wright brothers did. But, a man or woman who builds a small business in his or her community is also making a great contribution. That business can provide employment and improve lives. It can also inspire younger people to seize opportunities and follow a similar path.

I can see a Chinese economy a decade from now where many millions of people throughout the country grow their opportunities, creating a dynamic attitude that encourages millions of others, creating a self-reinforcing, benevolent cycle. This beautiful vision is possible only because of the infrastructure and revitalization efforts of the past decade.

During the first decade of the century, China also became the workshop of the world with a huge number of industrial clusters not available anywhere else. In the early years of industrialization, China's comparative advantage was based substantially on a large low-wage labor force. Thank goodness the low-wage business strategy is no longer viable because wages have gone up rapidly—at a faster rate than GDP over most of the period. 

Since the goal of any economy should be improving the lives of average people, the rapid rise in real wages is a very good thing. But, this means that Chinese businesses have to move to a strategy of producing higher value-added products and are dependent on a more qualified labor force. Fortunately, China's industrialists have learned the nuts and bolts of how to do manufacturing—perhaps better than those in any other country.

China's second great opportunity in the coming decades is to apply new technologies to manufacturing. The world has seen a lot of technological change over the past 20 years, but much of this change has gone into phones, entertainment apps and the like—hardly productivity enhancing. China's manufacturing companies are now in a position to apply the new technologies to the real economy, to improving manufacturing and also agricultural productivity in transformative ways.

The new technologies also give China an opportunity to create a new kind of agriculture that is both greener and more productive. The agricultural reforms of the late 1970s that kicked off the reform and opening-up period were critically important and appropriate for their time. China then had a very large agricultural population, so the best strategy was to divide the land into millions of small plots that each farmer could work intensively. 

However, the vast improvements in China's economy over the past 45 years have changed the fundamental situation for agriculture. Urbanization and rising wages have given young rural people lots of opportunities to work away from the farm. Also, the old way of farming uses lots of toxic fertilizers and pesticides that are harmful for the environment, expensive, and often imported. Recent reforms have given farmers the right to lease the usage rights to their land to companies that can apply new precision technologies which can be both more productive and ecologically friendly.

So, China is now prepared to apply the new technologies to the real economy of manufacturing and agriculture. This can lead to huge increases in living standards, improvements in efficiency, and a greener world.

In addition to investments in infrastructure and education, some specific policies of the Chinese government have made the coming transformative opportunities possible.

First, China's economy has been driven by a sequence of reforms designed to solve problems and create opportunities appropriate to each stage of economic development. In the early decades of reform, the government was "crossing the river by feeling for stones" creating fundamental institutions for the economy. Later, systematic legal and institutional reforms allowed market entities to rapidly raise economic incomes. More recently, reforms have improved real living standards by emphasizing environmental protection and economic fairness. These reforms need to continue, especially policies that encourage small entrepreneurs.

Second, government policy has been active in ensuring that monopolies don't destroy the essential mechanism of a market economy. Without strong competition, none of the microeconomic models that claim the market leads to efficiency make any sense. Unfortunately, the American government has become corrupted by monopolists in many sectors. This has led to crippled innovation, corporate power controlling much of the government, and rising levels of inequality among the people. Fortunately, the Chinese government has found a good balance between encouraging markets to work while actively intervening to prevent the rise of monopolies.

Finally, and most importantly, China's reform process continues to emphasize the importance of increasing real wages for average people. For most years in the reform period, wages actually rose more rapidly than the rapidly rising GDP. Wage levels are not some kind of natural occurrence. They are instead created by government policies. The Common Prosperity policy indicates that maintaining these increases in the standards of living of average people will continue to be a priority. In contrast, again, median real wages in the U.S. have not risen one dollar since 1979 and have fallen during the high inflation rates of the current administration. 

Rising real wages are not purely a matter of fairness, though that is certainly important. Rising average incomes are an important creator of the domestic demand that has to be a critical driver of a very large economy, such as China. Furthermore, rising real wages force companies to move up market and create a more productive economy. My research shows that economic booms not accompanied by rising real wages soon turn to stagnation.

The next 10 years will not be easy. China needs to change its business model away from the old model, which was driven by low wages and high rates of infrastructure investment. Fortunately, past policies and investment have created two great opportunities—(a) entrepreneurial growth by average people around the country and (b) applying new technologies to the real economy of manufacturing and agriculture. Seizing these hard won opportunities can ensure a further fundamental transformation of Chinese living standards.