From The Perspective Of The Middle-income Trap, Economic Opening, Technological Progress And Industrial Structure Upgrading

Since China's reform and opening up,China's economic development situation has gradually entered the stage of high-speed steady growth,which has been a qualitative leap and GNI per capita has risen from $155 in 1978 to $8,260 in 2016.The income level is already more than the medium-income countries and also has become the country with the most middle-income groups in the world.The middle-income stage as a key period of economic development and transformation in a country,if fail to complete the perfect transformation of the pattern of economic development,therefore,it could lack of economic growth drive capacity,or get stuck in the condition of economic stagnation,which is named by "middle-income trap".At present,China has entered the best period of economic development.However,with the increasing challenges of the international economic situation,combined with the increasingly prominent domestic economic and social development contradictions.If the transformation of economic development mode cannot be realized in time,the current economic growth rate will not be sustainable,and even couldn't get to two "one hundred" goals of 19th report,which may be fallen into a "middle-income trap",in turn,severely hampered the development of economic health and stability.The communist party of China(CPC)puts forward that China's economic development has achieved a high quality transformation,as the central economic work conference.It is the fundamental requirement for developing ideas,formulating economic policies and implementing macro-control in the current and future period.Now,the research on"middle-income trap" has attracted more and more attention from the academic circles,but most of the research is only on one side of the theory or the impact factor.This paper will start from how to change the pattern of economic development and the study of factors affecting the "middle-income trap”as the focus,the following research:First of all,it has already research on the "middle-income trap" deeply,by reading a large amount of literature and research on the path of developed countries' economic development such as Japan and Korea,it shows that the transformation of economic development mode is decisive,systematic and vital to avoid the "middle-income trap".Among them,the upgrading of industrial structure is the key way to transform the mode of economic development,and the upgrading of industrial structure is closely related to the support of economic openness and technological advance.Second,from the perspective of "middle-income trap",this paper analyzes the impact mechanism of economic openness and technological advance on the upgrading of industrial structure,it is concluded that the economic openness will affect the upgrading of industrial structure through international trade and foreign direct investment,and technological advance influences the upgrading of industrial structure through technology import,innovation and diffusion.At the same time,the interaction effect of economic openness and technological advance will also promote the upgrading and optimization of industrial structure.Third,in this paper,,according to the research of the world bank's classification standards and Felipe and Kumar in July 2015[1],then based on the data availability:49 countries were selected as sample countries,which were divided into four categories:deep crossing?shallow crossing?the deep and shallow trapped groups of country.At the time of the period of 1980 to 2015,using system GMM estimation method,respectively investigates the relationships between economic openness?technological advance and upgrading industrial structure in such countries.The empirical research shows that the primary means of transforming the mode of economic development is the upgrading of industrial structure,which is also an important prerequisite for overcoming the "middle-income trap".In addition,economic openness and technological advance are the primary thrust to promote the optimization and upgrading of industrial structure in the crossing groups.And also,economic openness will significantly increase the advance of technology in the structure of the industry,through the way of international trade and foreign direct investment,in the deep crossing group,increasing international trade level and increasing foreign direct investment will significantly increase the efficiency of technology input,output and efficiency in the advancement of industrial structure,while the trapped ones lack the corresponding significance.Finally,by the above theory and empirical research to gain the following related enlightenment and reference for China's economic development:One is should be reasonable allocation and utilization of foreign direct investment in China,zealously promote the economic exchanges between the countries and construction;The second is to adjust the structure and efficiency of technical input,and improve the technological innovation ability by cultivating high-tech talents and improving the industrial system;The third is to take the industrial structure as an opportunity to avoid the"middle-income trap",so as to maintain the healthy development,which is of great and far-reaching significance to China's economic development.