Evading middle income trap: international experience and China’s solution

ZHANG Xiaojing, 1

(1.Economic Research Department, Chinese Academy of Social Sciences)

【Abstract】Many factors can plunge an economy into the middle income trap, such as technology, industry, income, the limit to growth, regression toward the mean and social conflicts. The history of Latin American countries shows that the following problems must be avoided: opening up the economy without appropriate policies, misplacement of urbanization and industrialization, and fluctuations caused by populism. China’s reform has improved efficiency in many aspects. To further improve efficiency and competitiveness, China should reallocate existing social assets. First, China should reform the complex administrative departments and public institutions to release production resources and reduce fiscal pressures. Second, China should reform the state-owned sectors and promote mixed-ownership to promote fairness in terms of resource allocation, reduce monopolistic power over capital and technology, and utilize social resources more effectively.

【Keywords】 middle income trap; limit to growth; reallocation of existing social assets; state-owned-enterprise reform;

【DOI】

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(Translated by LING feixia)

    Footnote

    [1]. [1] Pritchett, L. and L. H. Summers, “Asiaphoria Meets Regression to the Mean”, NBER Working Paper No.20573, 2014. [^Back]

    [2]. [1] Fan, G. & Zhang, X. Management World (管理世界), (9): 12–24 (2008). [^Back]

This Article

ISSN:1007-0974

CN: 11-3799/F

Vol , No. 06, Pages 27-32+4

November 2015

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Article Outline

Abstract

  • 1 Analysis of the middle income trap
  • 2 Lessons from Latin America
  • 3 China’s way out
  • Footnote