Can China rise to high income?

Abstract

In 2014, China's GDP per capita reached US$7,500, but its GDP growth decelerated to 7.4 per cent from 7.7 per cent a year earlier. The combination of these two indicators raises the question of whether China will be able to continue its steady economic growth, avoid the 'middle-income trap' and become a highincome economy in the coming decade. The sustainability of Chinese growth has always been a contentious subject, but the challenge has never appeared more real than it is now because, historically, most other countries failed to graduate into high-income status after reaching a similar stage of development. And, more alarmingly, Chinese growth has been slowing quite visibly and persistently for the past several years.