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Voices

Let reform benefit all, bypass 'middle income trap'

(Xinhua)
Updated: 2014-03-10 21:38

BEIJING -- Chinese Premier Li Keqiang stressed recently that China would strive to let development and reform benefit all people, voicing the determination of the government to narrow the gap of wealth, establish a more fair and reasonable system of revenue distribution, and achieve common prosperity.

This is also key to China being able to stride over the so-called "middle income trap."

As the annual sessions of China's top legislature and top political advisory body continue, Xinhua reporters raised the question of the "middle income trap" to experts, scholars, businessmen and ordinary people worldwide.

Let reform benefit all, bypass 'middle income trap'

GDP growth target for 2014 set at 7.5 percent

Let reform benefit all, bypass 'middle income trap'

Five Key Points to improving people's lives

DIALOGUE 1

Xinhua: According to the levels set by the World Bank, China has joined the rank of the middle developed countries. Some analysts believe that China will inevitably face the challenge of the "middle income trap." What do you think of it?

Carl Dahlman, research head of the Development Center of the Organization of Economic Cooperation and Development, told Xinhua in Paris that he personally believes China's economic growth has outpaced other countries over the past 35 years, staying at a high of nearly 8 percent, although the pace is currently slowing.

Moreover, the Chinese government clearly knows what it needs to do on the path of reform, Dahlman said.

Tsugami Toshiya, former economic counselor at the Japanese embassy in China, said China has already recognized its "middle income trap" and the decision made at the third plenary session of the Communist Party of China Central Committee in November last year was groundbreaking.

Whether China can stride over the trap depends on the implementation of these decisions, Toshiya said.

Fernando Augusto Adeodato Veloso, investigator of Brazilian School of Economics and Finance of Getulio Vargas Foundation, said currently China is a bit like Brazil in the 1950s-1980s.

Veloso said both countries had developed rapidly in the start-up phase as they turned to more lucrative manufacturing and service industries from agriculture of lower productivity.

However, after per capita GDP reached the middle income level, the growth slowed down, he said, adding that the countries need to change the development model, such as focusing more on domestic economy rather than exports, increasing innovation investments, strengthening patent protection and enhancing the living standards of people.

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