China on cusp of joining high-income club, but slowdown raises spectre of middle-income trap

Beijing officials trumpet dazzling economic figures to make case the country can escape middle-income trap

However, some inconvenient statistics point to a worrying trend for the world’s second-largest economy

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Statistically, China already stands at the doorstep of the high-income club, but there are concerns it could fall victim to the middle-income trap. Photo: Illustration by Lau Ka-kuen

Published: 6:00am, 20 Jul 2022

Ahead of this year’s 20th National Congress of the Communist Party of China, we take a look at how the country is responding to three potential traps highlighted by President Xi Jinping in the past decade. In the third of a three-part series, we examine the middle-income trap and the hurdles China’s economy must clear to escape it.

Chinese officials like to use numbers to describe the country’s economic miracle.

So that is what Han Wenxiu, a senior official with the Central Financial and Economic Affairs Commission, did when he summarised almost a decade of achievements under President Xi Jinping in mid-May.

He threw out a string of dazzling figures at a news briefing: the world’s No 2 economy, with gross domestic product (GDP) of 114 trillion yuan (US$17 trillion) last year, accounting for 18 per cent of global GDP – up from 11.4 per cent in 2012 – and contributing 30 per cent of global GDP growth in that time.

“We are close to the threshold of high-income countries,” Han said.

Statistically, China already stands at the doorstep of the high-income club, defined by the World Bank as those with gross national income per capita above US$12,695 in 2021. China’s was US$12,551 last year.

SCMP Series

How China is responding to 3 potential traps

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