The Study For The Impact Of China’s Income Distribution On Breakthroughing The Middle Income Trap

In the context that China has become to be a middle-income country, inconnection with the reality that the gap of Chinese residents in income distributionbecomes widening and China is facing to avoid the middle-income trap, this papermainly used the theory and evidence ways to explore the impact of the widening gapof Chinese residents in income distribution on avoiding the middle income trap.First, in the framework of economic growth and income distribution, this papermade a brief summary and evaluation for the part of income distribution’s impact oneconomic growth in the western economics, found that: the relevant of the westerneconomics can make some explanation to the reality that income distribution’s impacton avoiding the middle-income trap.Second, this paper made an empirical analysis on China’s economic growthimpetus since1980, and specifically analyzed the contributions of physical capital,human capital and total factor productivity to economic growth. The results showed:China’s economic growth mostly depends on the investment in physical capital. Toachieve the Long-term Growth of Chinese Economy, we should increase thecontributions of human capital and total factor productivity to economic growth.Third, this paper analyzed the changing trend of Chinese residents’ incomedistribution, and specifically analyzed urban residents income distribution pattern,rural residents income distribution patterns,and income distribution pattern betweenthe urban and rural residents. In this part, the paper makes a fundamental judge to thechanging trend of Chinese residents’ income distribution that the income disparitiesbetween urban residents, between rural residents and between urban and ruralresidents were expanding.Once again, this paper analyzed the impact of the widening gap of Chineseresidents in income distribution on avoiding the middle income trap. Specificallyinspected the impact on propensity to consume, on physical capital accumulation, on human capital accumulation,on technical advances and social efficiency.The results showed: the expanding residents’ income distribution will prevent Chinafrom avoiding the middle income trap.Finally, this paper posed several policy recommendations points to narrow theincome gap.