China mulls new measures to avoid 'middle income trap'
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E-mail Xinhua, November 7, 2013
After over 30 years of torrid growth catapulted China into the group of middle-income countries, the government faces the task of preventing prolonged stagnation experienced by many countries following similar increases in living standards.
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Gross Domestic Prerequisite [By Jiao Haiyang/China.org.cn] |
China’s gross domestic product (GDP) per person was around US$6,000 last year.
By World Bank standards, this makes China a “higher middle income country,” a phase in which many countries, such as Latin American economies, are finding it hard to sustain growth.
This stagnation is identified by some economists as the “middle income trap,” and as China’s economy gradually slowed down in recent years, it became questionable whether China could avoid the syndrome.
Confident of growth
The economy grew 7.8 percent last year, the slowest since 1999. Growth in the first three quarters this year was also 7.8 percent, and analysts generally expect less expansion in the fourth quarter.
In a response to worries over China’s prospects, President Xi Jinping, when meeting with a group of foreign members of the 21st Century Council in Beijing last week, stressed that China is confident of achieving sustainable and healthy growth.
“There are sufficient internal factors supporting China’s economic development. We are confident that the Chinese economy will keep growing in a sustained and healthy way,” said the President, denying the possibility of any middle income trap.
Just days earlier, Premier Li Keqiang had spoken of a “golden balancing point”: a fair economy that is both stable and sustainable.
Qiao Hong, chief economist for greater China at Morgan Stanley, said the leaders’ remarks showed confidence in the strength of the economy, coupled with an awareness of what needs to be done.
“Their comments can also be read as a pledge to drive growth through deeper reforms and opening-up,” she added.
