"Middle Income Trap" And China’s Economic Development Strategy

Since2006，"Middle income trap"put forward by the world bank, andled to the study and discussion of the scholars. Most countries in the worldof development, reveals the "middle income trap" is a commonphenomenon. In2010China entered the middle income countries, how toovercome the "middle income trap", to keep the economy healthy,sustained growth, access to developed countries, is an important researchtopic.In this paper, using system research method reveals the "middleincome trap" formation mechanism. Dynamic mechanism is the source ofeconomic growth, no dynamical mechanism of economic developmentbecome stagnant or even retrogress. Loss of balance in the process ofeconomic development, dynamic mechanism will be reversed, become afactor to restrain the sustainable development of economy. Strategydetermines the power of economic growth options, indicates the directionfor the dynamic mechanism and balance mechanism to decide the economic operation. Therefore, economy strategy, dynamic mechanismand balance mechanism is essential to the sustainable development ofeconomy, the three complement each other. Into the middle-income stagein most countries due to continuously in order to increase the "investment"and "other factors" as a driving force, promote economic growth. In orderto increase the "investment" and "material production factors" as thedriving force to bring is the extensive mode of economic growth, theeconomic growth is not sustainable, resulting in economies fall into the"trap". Run an economy is dynamic mechanism and balance mechanism ofstrategic, economic operation implemented by the economies of the resultof the interaction of. Enter the various contradictions accumulatedeconomies middle-income during the economic development highlightedin middle-income stage, system unbalance balance imbalance in industrialstructure, the widening gap between rich and poor, shortage of resourcesenvironmental deterioration of sustaining economic growth, and tomaintain the health of the economy, continued to coordinate the relation between growth elements is broken, beyond the critical point ofmaintaining economic growth and make the balance system is in aninvalid state, economic growth decline. The strategy of economicdevelopment indicates the direction for the economy, economy, internalresource allocation based on economic development strategy based on the.The development strategy of violation of international, domesticenvironment and the economy’s productivity level, institutional constraints,guiding the development strategy of economy development is wrong.Middle-income countries continued in the process towards high incomecountries old to labor cost, resources for the strategic choice of thedevelopment strategy of international competition, no successfulconversion, economic development will inevitably fall into the"middle-income trap". The sustainable and healthy operation of aneconomy’s development strategy, implemented by the economy’s dynamicmechanism and balance mechanism of economic operation of the result ofthe interaction of. Formation mechanism of "middle income trap" is the three elements of the inappropriate distribution.The economic and social structure from the economy, society andresource environment, three constitute the three dimensions of sustainabledevelopment, three-dimensional equilibrium is a concrete manifestation ofsustainable development. The three-dimensional system, simply put, theconsumption structure reflects the people’s preference, technologyinnovation to provide technical support for the realization of the demandsof the people, at the same time, the new technology may change people’sdemand tendency. Production decision depends on the producer needs topeople, rely on technical support to production to meet the people needproducts, promote technological innovation to promote the transformationof industrial technology and industrial structure to advanced. People’sdemand is decided by the people’s income level, income structuredetermines the consumption structure, income structure is affected byindustrial structure. Three-dimensional system of any Party running resultsbeyond the other side capacity, three-dimensional three-dimensional system balance will be broken, a state of imbalance, development isunsustainable. The relationship between the technological innovation,from the three-dimensional system of industrial structure, income structurefactor perspective discusses the three elements and the "middle incometrap". Many middle-income countries due to the low level of technology,lack of technological innovation ability, the lack of economic growthmomentum, and make the economy falling into the "trap". Lack oftechnological innovation, has restricted the upgrading of the industrialstructure, can only engage in labor-intensive and resource-intensiveproducts production in the world industrial division of labor, productionactivities at the lower end, the industry value chain, profit is scanty,difficult to maintain sustained economic growth. The majority ofmiddle-income countries showed a widening gap between rich and poorcharacteristics in the area of income distribution, the widening gapbetween rich and poor inhibition technology innovation, consumerdemand structure formation, the upgrading of the industrial structure and the economy falling into a "middle-income trap". From the theoreticalanalysis of the "middle income trap" formation mechanism, to fall into the"economic structure of the Middle Income Trap" and successfully crossedthe "middle income trap" typical countries were analyzed, and comparedthe structure characteristic and China, that China’s existing risks fallinginto the "middle-income trap". On the basis of the proposed developmentstrategy of our country across the "middle-income trap"..That implementthe innovation strategy, establish and improve the national innovationsystem; the development of strategic emerging industry, upgradingindustrial structure; narrow the income gap, inclusive growth;maintenance of low carbon development, the advancement of new city.