Will Dragon fly out of 'Middle-Income Trap'? by Akshat Joshi
Introduction China is among the world's fastest-growing economies. Post-1990s, China witnessed unprecedented growth. The two main reasons are foreign investments and increased productivity. As a result, China has done exceptionally well in eradicating poverty. The GDP per capita of China increased from $300 in 1990 to $12,556 in 2021 . After its golden decades, the question arises- "Will China become a high-income economy, or will it fall under " The Middle-Income Trap ?" Before answering the question, let us understand what a middle-income trap is. The middle-income trap (MIT) is an economic condition of any nation where the growth tends to flatten out once it reaches a middle-income country. The middle-income trap has been a problem for several middle-income countries. In fact, as per the world bank report, out of 101 middle-income countries in 1960, approximately 13 became high-income by 2008 based on per capita income level. The countries affected have a com...
