Across The "middle-income Trap" Research In China

Caught in the risk of “the middle-income trap” and the overlarge gap on theincome distribution is not only an important current economic subject, but also thetwo major economic problems faced by our country. This article is on the base ofKuznets hypothesis to closely link up the narrowing of income distribution gap andstriding over "the middle income trap".Firstly, this paper studies the literatures of the question of income distribution"the middle income trap" and Kuznets hypothesis. We find that there exist certainlinks among the above three question. Secondly, we found that the link betweenincome distribution and "the middle-income trap"—the Kuznets hypothesis. Inorder to get the precise contact between income distribution and “the middle-incometrap”, we study the Kuznets hypothesis again and receive the sufficient condition forthe Kuznets hypothesis. we found that the specific conditions which established theKuznets hypothesis, is the characteristics of a country’s initial stage of developmentto meet the rising phase of the Kuznets curve and the per capita income at$11,000on the previous stage. Then the links between the country’s economic developmentand income distribution will meet the Kuznets inverted U-shaped curve. This articledescribes that a “fair” distribution of income is an important factor of this country’seconomic development when the country lies in the middle-income stage. When acountry comes into therapeutic time window of the "middle income trap", it canreduce the degree of inequality in income distribution to successfully out of thepredicament of the "middle income trap".Thirdly, we find the characteristics of the Kuznets inverted U-shaped curve atthe turning point. It helps us point out the start condition in the implementation ofcountermeasures for striding over the "middle-income trap". Fourthly, we analyzethe experience and lessons on the countries which have successfully stridden over the "middle income trap" or fallen into the "middle-income trap". We found the fairof the income distribution is crucial on whether they can successfully stride over the"middle-income trap" or not. Lastly, in the nonparametric estimation and the linearregression analysis method, we have used630sets of data from48countries orregions and precise metrological instruments to verify the view of this article. Themetrological verification found that the test results support the view of this article,and illustrates that the distribution of income and per capita income is significantlyrelated.This paper studies the characteristics of the China’s economy at the presentstage, pointing out that China’s economic development is fit into the Kuznetshypothesis. If our country pays positive attention to the fair of the incomedistribution, China’s per capita income will reach$11,000or more in2030, andstride over the "middle-income trap". Finally, according to the characteristics ofChina’s economy at present stage, we put forward the specific strategies for solvingthe problem of inequality in income distribution and helping our country tosuccessfully stride over the "middle-income trap". At the last, we also pointed outthe inadequacies in our studies. The inadequacies is that the quantitative relationshipof between the inequality of income distribution and per capita income only showthat the both have significant relationships at middle-income stage, but we can’t getsatisfactory results. These deficiencies and shortcomings point out the direction forfuture research.