H On China Steps Across "the Middle Income Tarp"

Since the reform and opening up, China’s social and economic development has made remarkable achievements, rising international status, a significant improvement in the standard of living of the people, a large number of social wealth, but China is also facing with many problems, such as worsening inequitable distribution of wealth, widening income distribution gap, insufficient domestic demand, the lack of a new growth point of economic growth, slow in the industrial restructuring and upgrading, the lag of the social security system and so on. In2010, China’s per capita GDP had exceeded4,000U.S. dollars. According to the World Bank’s latest standards, China has been the upper-middle-income country. World economic development experience tells us that the next few decades is a pivotal stage to successfully step across the "middle-income trap". This paper argues that it is critical for China to smoothly step over "middle-income trap", by drawing on the successful experience of how Japan and South Korea step into the high income countries from the middle income ones and the failure of how the Latin American countries fall into the "middle-income trap", by coordinating the relationship between the distribution of income and economic growth mode transformation, by increasing the proportion of middle-income group, by scientifically accelerating urbanization, by breaking the administrative monopoly, by narrowing the gap between the rich and the poor, and by expanding domestic demand.Based on the successful demonstration of the positive role of improving the distribution of income across in China’s stepping across "the middle-income trap", this paper reviews the successful experience of how Japan and South Korea step into the high income countries from the middle income ones and the failure of how the Latin American countries fall into the "middle-income trap". And the paper also has a deep analysis on the major constraints and favorable conditions China is faced with currently. Finally, from the angle of income distribution, this paper puts forward following proposed policy measures to skip the "middle-income trap":Expand the proportion of middle-income groups, and improving income distribution pattern; Scientifically accelerating urbanization, and improve the income level of farmers; Eliminate the administrative monopoly and promote equitable distribution; Deepen the reform of income distribution system, and continue to narrow the gap between the rich and the poor.