Opening-up at the upper middle-income stage: implications from international experience

ZOU Jingxian1 ZHANG Bin2

(1.Lecturer at the National Academy of Development and Strategy, Renmin University of China)
(2.Research Fellow at Institute of World Economics and Politics, Chinese Academy of Social Sciences)
【Knowledge Link】Geary-Khamis dollar

【Abstract】After expanding rapidly for more than thirty years, China has started the upper middle-income (UMI) stage in terms of GDP per capita. Now, it may draw international experience to transit from UMI stage to high-income stage. This paper divided the countries into three groups (i.e., front group, successful catch-up group and failed catch-up group) by duration at the middle-income stage, compared the three by foreign trade, investment, exchange rate regime, and capital account openness, and found successful catch-up group managing to narrow their gaps with the front group, while failed catch-up group has remained at the bottom or even stagnant in some aspects. This paper argued that opening-up policies are beneficial in encouraging market competition, improving the efficiency of global resources allocation, and boosting industrial upgrading and structural transformation; meanwhile, a proper exchange rate regime and prudent capital account opening-up are crucial for China’s macroeconomic stability.

【Keywords】 upper middle-income stage; middle-income trap; opening up policy ; international experience;

【DOI】

【Funds】 “Overcoming Middle-Income Trap” Program of Asian Development Bank

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(Translated by GENG Qingyou)

    Footnote

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This Article

ISSN:1007-0974

CN: 11-3799/F

Vol , No. 02, Pages 9-23+4

March 2018

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Abstract

  • 1 The international experience of UMI countries in opening-up policy
  • 2 Role of opening-up policy
  • 3 Implications to China’s opening-up policy
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