Advertisement
China’s 20th Party Congress
EconomyChina Economy

China on cusp of joining high-income club, but slowdown raises spectre of middle-income trap

  • Beijing officials trumpet dazzling economic figures to make case the country can escape middle-income trap
  • However, some inconvenient statistics point to a worrying trend for the world’s second-largest economy

Reading Time:8 minutes
Why you can trust SCMP
75
Statistically, China already stands at the doorstep of the high-income club, but there are concerns it could fall victim to the middle-income trap. Photo: Illustration by Lau Ka-kuen
Frank Tang
Ahead of this year’s 20th National Congress of the Communist Party of China, we take a look at how the country is responding to three potential traps highlighted by President Xi Jinping in the past decade. In the third of a three-part series, we examine the middle-income trap and the hurdles China’s economy must clear to escape it.
Advertisement

Chinese officials like to use numbers to describe the country’s economic miracle.

So that is what Han Wenxiu, a senior official with the Central Financial and Economic Affairs Commission, did when he summarised almost a decade of achievements under President Xi Jinping in mid-May.

He threw out a string of dazzling figures at a news briefing: the world’s No 2 economy, with gross domestic product (GDP) of 114 trillion yuan (US$17 trillion) last year, accounting for 18 per cent of global GDP – up from 11.4 per cent in 2012 – and contributing 30 per cent of global GDP growth in that time.

“We are close to the threshold of high-income countries,” Han said.

Advertisement

Statistically, China already stands at the doorstep of the high-income club, defined by the World Bank as those with gross national income per capita above US$12,695 in 2021. China’s was US$12,551 last year.

SCMP Series
How China is responding to 3 potential traps
[ 3 of 3 ]
Advertisement