AVOIDING MIDDLE-INCOME TRAP: CASE OF CHINA

MÁRIO ZEMAN

https://doi.org/10.53465/EDAMBA.2021.9788022549301.571-581

 

Abstract: The middle-income trap is a relatively new concept that became very popular after the financial crisis in 2008. It describes countries that have managed to develop economically from low-income countries to middle-income countries. However, the initial determinants of economic growth have exhausted their potential, and therefore these countries have stagnated economically. China is also currently one of the middle-income countries that a middle-income trap could potentially threaten. We used various absolute and relative methods to determine whether China is in the middle-income trap. However, we did not reach unambiguous conclusions, as the individual methods generated mixed results. The development of other factors such as composition of exports, the enrolment of universities, and the number of patents received over time suggest that China will transform into a modern economy based on services and innovation. However, further reforms are likely to be necessary. Middle-income trap stays as a potential threat for Chinese economy.

Keywords: China, middle-income trap, economic growth

JEL classification: I25, O10, O40

Fulltext: PDF

Online publication date: 12 May 2022

 

To cite this article (APA style):

Zeman, M. (2022). Avoiding Middle-Income Trap: Case of China. Proceedings from the EDAMBA 2021 conference, 571 – 581. https://doi.org/10.53465/EDAMBA.2021.9788022549301.571-581