Chinese leaders strengthen determination to avoid middle-income trap at fifth plenum

Oct 30, 2015, 08:30 am

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A Chinese cartoon showing a strong will that China should avoid the middle-income trap./ Source from search engine Baidu

By Hong Soon-do, Beijing correspondent, AsiaToday - The fifth plenum of the Communist Party of China, which ended on Thursday, is significant in many ways. However, in short, it was a meeting where party officials showed their strong determination to avoid middle-income trap. In other words, Chinese leaders likely had a serious discussion to avoid the nation from losing its way to become a developed country and achieve the greatest ever work in the history of socialism.

Such assertion is well testified by Xi Jinping's continuous comments at various discussions, saying that China should not fall into the middle-income trap. Besides, the fact that "new normal" of slower but more sustainable growth has been one of the major topics at the fifth plenum can be understood in the same context.

According to sources in Beijing on Thursday, China is currently placed in a situation that socialist countries had never experienced before. China's GDP per capita climbed towards US$8000. We could say that China is one of the middle-advanced countries that is just about to become a developed country. The way it looks, China could become a high income nation within a few years where GDP per capita is over US$12,000, according to World Bank standards. To be more optimistic, the country's GDP per capita could be US$15,000 by 2020 when the 13th Five-Year Plan ends.  

Chinese Finance Minister Lou Jiwei often warns that China could be headed toward middle-income trap./ Source from Xinhua News Agency

However, things have not been going well for China. Its stock market is shaking and economic warning lights of hard landing is flashing over the Chinese economy. In some ways, there are typical signs of middle-income trap. Chinese Finance Minister Lou Jiwei said at a recent economic forum, "There is a 50 percent chance that China will get caught in the middle-income trap."

Of course, there is little possibility that China will face with the worst situation looking at the Chinese economic authorities' ability to react in advance. However, it's not a strange thing that there are continuous discussions of the middle-income trap considering the fragile global economy and fatigue of Chinese people after decades of rapid growth. Because of this, it was an appropriate decision of the Chinese leaders to strengthen such determination at the fifth plenum.

#fifth plenum #middle-income trap #China 
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