| The Report of’East Asia’s Rejuvenation’ of World Bank in2006indicated the concept of’Middle-Income Trap ’the first time,which mainly described the situation after a country’s average per capita income went into middle-class and due to unsuccessfully transformation of economic development pattern, result in the lack of economic sustainable growth and being in a economic stagnation situation. The report specifically pointed out that the East Asia area was generally in a situation of the increasing income gap and this impacted the smooth transformation of economic development pattern. It warned the East Asia’s economy from preventing being trapped into the’Middle-Income Trap’.At2008, China’s Per Capita GDP was over$3595and crossed the threshold of Middle-Income Country. China’s goal aimed at being a High-Income Country with which had a Per Capita GDP of$11116. In corresponding was China’s economic policy framework since1970’s, the domestic reform and the opening to the outside world were the key point of the whole development strategy. Especially after the confirmation of the direction of market economy reform, the main function of governments at all levels was promoting economy growth. The basis of economy growth was fulfilled by the export-based development strategy based on capital and export driving and exporting products which had high labor intensity. However, the key element of driving China’s economy to crossing Low-Income Trap and Low-to-Middle-Income Trap is changing. The slow pace of government reform, the quickly decreasing demographic dividend, the severe conflict of resource and environment, all these lead to the extensive attention on China’s maybe confronted ’Middle-Income Trap’. Base on these, it is essential to have an analysis systematically. Especially on the path dependent and develop environment prospective to have a further discuss on other economic entities’ reasons of trapped or not trapped into the Middle-Income Trap. And have a clear understanding of common problems and specific characteristic when China confronting this topic, thus, proposing operational and specific suggestion on how to step over the Middle-Income Trap for China.This dissertation mainly researches on’what is Middle-Income Trap’, lessons and enlightenments from Latin America and East Asia countries, why China will confronted with Middle-Income Trap, how to step over this trap, strategies and suggestions on stepping over it. Specifically, firstly, analyze different opinions on topics on Middle-Income Trap systematically. Secondly, avoid drawing easy conclusion based on analysis on the combination of common and specific aspects. Different countries had different problems and reasons on Middle-Income Trap. Actions were different based on historical path, the effect were different as well. It needs further explore on historical backgrounds of the differ strategies in Latin America and Japan and South Korea. And think deeply of China’s domestic and international situation. The previous experience can give advice on the latter situation, but it will not gain a lot by doing exactly the same. Thirdly, introducing the analyses of impact on economic policy by individual economical social environment and regulation elements into Middle-Income Trap issue. Economical condition is determined by social regulations and itself has a close relationship with changes in regulations. The main element in discussing economical policy is economical and social conditions. The birth and growth and appear, burst and disappear of Middle-Income Trap all have their own specific social sources and backgrounds. Not only have they had relationship with domestic and international economic and financial elements, and political system, but also historical and cultural causes.No matter the internal financial policy, currency policy, and external exchange rate and trade policy, all these do not have certain answers. Economical policies have to take regulations and environmental affects and differences into consideration. The China’s Pattern inspired30-year’s development and it has a demand on changing the development pattern. At the same time, the development of global economy and low-carbon economy show the future of human society’s economical pattern. Therefore, research and compare different countries’Middle-Income Trap or the relationship with economical policy of developing the trap and regulations and conditions has a positive effect on finding out the route of China’s macroscopic development and way of promoting future economical pattern.In order to achieve the above goals, this dissertation will focus mainly on3aspects of research objects:First, what is Middle-Income Trap and whether it exists or not. On the concept of’Middle-Income Trap’, there are two totally different understandings:one thinks the core of’Middle-Income Trap’is average income level. And a lot of countries had proved that. The statistical significance does exist. It approved on certain phase of Middle-Income, the high-speed increase economical entity has a trend of slow down or even stop increasing. Another opinion thinks that it is not essential for a certain country step into’Middle-Income Trap’ due to exist of distributed income gap. The average income of the whole society in any country will certainly experience a long or short period of Middle-Income. This is not a trap but a normal law of social and economical development. Misunderstanding of modernization into Middle-Income Trap and treat not properly distribution problem as total income level problem, and treat civil rights issues as civil livelihood issues will not solve the problem at the base.Second, research the forming reasons of Middle-Income Trap. The emphases are not only on economical structures caused by economical development pattern but also on the shortcoming of political system. It analyzes traditional growth power attenuation, Demographic Dividend vanish, unreasonable income distribution, increase on restrictions of resources and environment, the speeding attenuation of comparative advantage based on China’s labor and land, the theory of comparative advantage also reveals common opinions of periodically and restrictively on developing countries guidance, the biggest threaten for China’s stepping into the trap, which comes from the combination of political power and capital, the purpose is not reforming the old system, but remaining and unchanging the current situation. The unbalance of social power leads to the unbalance of benefit. Some judgment even states the danger of combine country institutions and policy.Third, discuss on how to avoid stepping into the Middle-Income Trap and how to overcome the trap. Using strategies from Japan and South Korea for reference, which include fair and reasonable incoming distribution policy or society equalization distribution policy, and science and technology innovation and leadership, free trade environment, increasing middle-class level formation and transformation in economical development power structure, and fulfilling the transformation in social structure and political democratization. It also pointed out the special geopolitics and the alliance with United States that Japan and South Korea have in their development, and also hold negative opinion on their influence on labor market caused by welfare strategies. Discuss on strategies specifically combined China’s actual situation.This dissertation is divided into6chapters. The first chapter mainly elaborates the significance of the topic and analyzes the current status of domestic and international’s relevant research. The second chapter mainly states the main problems on China’s facing Middle-Income Trap from the points of domestic reform and open market to the outside. It also highlighted the influence of China’s unbalance region development. The third chapter analyzes the experiences and lessons from different kinds of countries when facing the Middle-Income Trap by comparing Latin America model and East Asia model. It also concludes the regulation elements leading to these two different results. The forth chapter is corresponding the main questions from chapter two. It states the reforming of the advantage in competition for China’s international role when facing other countries and driving domestic administration reform and adjusting function of government, all these make sure the strategies of how China will step over the Middle-Income Trap. The fifth chapter states the specific solutions from three perspectives:increasing citizen income, land reform and urbanization, avoid the rent-seeking actions when transforming the economy, based on the strategies of how China will step over the Middle-Income Trap. The sixth chapter proposals systematic strategies based on the consideration of China is now the largest developing country and second largest economical entity in the world and the influence on the world geopolitical situation and financial system when China is stepping over the Middle-Income Trap.The innovation of this dissertation is mainly reflected in4aspects:First, take public policy and institution environment’s cause and frame analysis elements into consideration when analyzing the proposal of Middle-Income Trap. This means expand the level and aspect of analyzing the Middle-Income Trap. And it creates space for general analysis and individual difference analysis.Second, combine the general analysis of the Middle-Income Trap with the actual situation of China, giving attention to the historic environment and cause of the differences in the systems behind the experiences and lessons rather than simply list and copy the so-called "experiences" of any other countries. Analysis on China not only center around both of the two themes of reform and open-up, but also give full consideration to the objective factors that China has larger regional differences.Third, pay attention to the impact of the external environment factors in China’ stepping over the Middle Income Trap, as the largest developing country and the second largest economies in the world, constituting a major variables to economic structure and the division of the world, China’ stepping over the Middle Income Trap will also be a fundamental impact over the International Geopolitics and world financial system, so the analysis of international environment and the study of countermeasures are the problems that must be considered.Fourth, introduce factors such as the risk,preference and information asymmetry into the mathematical analysis to the rent-seeking behavior, it can explain the phenomenon of rent-seeking on economic transformation, and provides the basis for how to control the rent-seeking behavior and evaluation measures to curb rent-seeking adctivities.Through the research on China’s striding over the Middle Income Trap, it can be found, the essence of the Middle Income Trap that China is facing is Development Transformation Trap. Judge the threshold of Striding over the Middle Income Trap, the income level is only a reference standard. Corresponding with that, the Chinese economy is facing the bottleneck for the transformation of development, mainly in the open-up to the outside world, which reflected in encountering the bottlenecks of labor supply, natural resources and trade barriers in the traditional labor-intensive export-oriented development strategy; in the internal reform, a variety of contradictions caused by the diminishing marginal effects derived from the government-led mode of investment stimulating and the administration-rization extruding the marketalization in the allocation of resources are also increasingly sharp. Fundamental adjustment of China’s economic development is required because of the dual constraints of resources and environment and the common challenges of internal and external. Otherwise, even across the income threshold in the quantitative indicators, the original growth pattern and development path is unsustainable, which will be repeated.To stride over the Middle Income Trap and to achieve the transformation of development mode, China should not only learn the experiences of East Asian countries and the lessons of Latin American countries, but also consider its own circumstances, and then to explore a new path of development for resource conservation, environment friendly, social harmonious development from the two aspects of open-up and internal reform, the key of which is the transformation of government functions.In a new development model, a wrong orientation is to make the government and the market in opposition, or self expansion to the ability of the existing system "concentrate on doing big things" under the guidance of "state intervention in the economy", and then to continue to expand the financial and management scope of governments at all levels; or by reflection of excessive government intervention in the economy, stress that "the market universal", and advocate put spirit and comprehensive privatization. After the analysis, the author thinks, summarizing the experience and practice, in the new innovation oriented development mode, enterprises, especially private enterprises is the most active factor. But the government does not abstain or neglect from acts, but will instead focus to provide more and better public services and build institutional environment.This dissertation discuss the international economic environment and the countermeasures when China stepping over the Middle Income Trap with a large space. This is because that as the largest developing country and the second largest economy in the world, China’s economy constitutes a major variables on the economic structure and the division of the world; the transformation and development of China will fundamentally affect the International Geopolitics and world financial system, and they also need the reformation of the International Geopolitics and world financial system.
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