China set to break key economic barrier despite trade war, but can it avoid the middle income trap?

China’s per capita gross domestic product (GDP) is set to exceed US$10,000 in 2019 despite the turbulence caused by the trade war with the United States

This will allow the Communist Party to deliver its goal of a ‘comprehensive well-off society’ in China by 2021

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President Xi Jinping defined 2020 as a key milestone on the journey of realising his “Chinese dream”, which includes making China a “basically modernised socialist country” by 2035 and a “powerful” socialist country by 2050. Photo: Xinhua

Published: 6:00am, 1 Jan 2020Updated: 12:49pm, 15 Feb 2020

China’s is set to a break a key barrier of increasing per capita gross domestic product to US$10,000 despite the trade war with the United States, one of “two centennial goals” for creating a “comprehensive well-off society” by 2021.

In July, China claimed to much online controversy that its nominal gross national income per capita for 2018 was US$9,732, just shy of the five-figure sum which is a key milestone for the ruling Communist Party.

China's headline gross domestic product (GDP) growth rate dropped to 6 per cent in the third quarter of 2019, but according to calculations by the South China Morning Post, this will still allow China to reach the US$10,000 figure this year.

Officials, including Han Wenxiu, a deputy director at the Central Financial and Economic Affairs Commission, earlier stated that China has passed that psychological threshold in 2019.

The World Bank defines high-income countries as those with per capita gross national income (GNI) of above US$12,375, with China belonging to a large group of “upper-middle countries” where per capita GNI falls in the wide range of US$3,996 to US$12,375.