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Aiming for the Top: Can China Escape the Middle Income Trap?

May 23, 2019 By Colin Shek

First coined by two World Bank experts in 2007, the middle-income trap phenomenon—the existence of which is disputed by some economists—describes how growth in developing countries tends to stagnate when gross national income (GNI) per capita rises above a certain level, as higher wages push up production costs. Countries can become “stuck in the middle” as they struggle to compete with low-income newcomers where labor costs are still low, and advanced high-income economies with strong innovation. Since 1960, only 15 countries have escaped the“middle-income trap.” Can China beat the odds?

Filed Under: All Articles, Chinese Economy, Economics, Emerging Economies, Globalization Tagged With: China's Middle Class, Wealth Gap

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Information, analysis, and interviews about the Chinese economy and doing business in China, from the people who know it best. Presented by the Cheung Kong Graduate School of Business, China's leading business school.


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