The Identification Of The Middle Income Trap And The Research On Its Influencing Factors

As China's economic aggregates continue to rise in the global rankings,and China being a very typical representative of emerging developing countries,in the current macro environment,China has shifted from high-speed development to stable growth in the medium-speed development after a thirty-year fast growth.China is eager to maintain a new normal.And at the same time,China is faced with various urgent challenges.In the coming decade,we will pay attention to if China can overcome such reforming difficulties,as it is closely related to whether China can escape the middle-income trap.In order to avoid falling into the middle-income trap,China is sparing no effort to find a breakthrough and explore the power of new economic growth.The article focuses mainly on the identification of middle-income trap and the long-run economic growth issues.First of all,the article traces the theoretical basis of middle-income trap through combing and analyzing previous related literature.The middle-income trap has its theoretical sources such as the Economic Growth Theory and the Economic Development Stage Theory,etc.Second,the article also proves the rationality of the existence of the middle-income trap,while also summing up the typical facts of such kind economies,they all appear lower per capita GDP growth,lower human capital level,lower labor productivity level and increasing income gaps.On this basis,the paper uses the panel data of 128 countries and regions,with a time span of 46 years,to further predict the economic growth of each country by using the economic growth convergence model,and in this way to identify and distinguish whether one economy is a middle-income trapper.China is most likely to fall into the middle-income trap as many problems appear,like the lacking of domestic demand growth,overcapacity,the increasing income disparity,the aging population,the unreasonable industrial structure,and the missing of innovation ability.There is urgent need for China to explore the path of innovation-driven economic growth,in order to stabilize domestic economic growth and alleviate social phenomena.The nature of studying middle-income trap is researching on the economic growth.To further understand the factors affecting the middle-income trap,the article focuses on the empirical test of the effects of total factor productivity,industrial structure,government finance and economic openness on both the trappers and the crossers,in the hope that China can focus on policy guidance at this stage.To be specific,to ensure the economy is open but not excessively dependent on international trade;to improve the efficiency of government financial expenditure,not deliberately catching up with the current wealth advancement;to accelerate the industrial structure upgrading,to cultivate innovation-driven industrial development strategies;to put emphasis on human capital and technological advancement innovation.Finally,based on the above explorations and findings,the paper proposes policy recommendations in a targeted manner so as to hope that China can actively explore the development path at this stage and achieve an all-around improvement of economic and social development at an early date.Firstly,a new economic growth model driven by innovation should be built,and our development should be achieved from creation;Secondly,to promote the realization of all-round development of human beings and upgrade the level of human capital;Thirdly,to accelerate the pace of economic restructuring and upgrading to achieve the synergetic development of multi-industries;Lastly,to adhere to resource conservation,and pay attention to high quality development.