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China will enter high-income stage by 2024, economic expert says

(People's Daily Online)    13:57, June 12, 2016
China will enter high-income stage by 2024, economic expert says

Liu Shijin, former Deputy Director of the Development Research Center of the State Council predicts that China will enter high-income stage by 2024. 

In an article published on People's Daily, Liu says that since China has already entered the middle-income stage, it seems inevitable that the country will eventually reach the high-income. However, even once China has entered the high-income phase, there will still be a gap between China and developed Western countries. Therefore, the question of how to maintain China’s strong power of development in the coming years is a vital one.

Liu explains that based on the classification of the four income stages by the World Bank, China’s first low-income stage (1978–1998) saw the country’s gross national income (GNI) per capita go from $190 to $820. The second stage (1999–2009) was the lower middle-income stage when foreign trade in labor-intensive industries became a vital engine for growth, and real estate became a pillar of the national economy.

The third stage, upper middle-income (2010–2023), is when the economy enters the “new normal.” It is expected to be another 13 years before China reaches the high-income stage in 2024. Currently in China, high-tech contributions to economic growth have reached 55.3 percent, but this number is still low compared to the standard of developed countries.

In the next six to seven years, assuming China’s current economic development continues, a well-off society is just around the corner. However, considering the fact that China’s GNI per capita is only $12,600 (compared to $55,000 in the U.S. and $110,000 in Luxembourg), Professor Liu says there is still a long way to march before China becomes a truly developed country.

From the history of developed Western countries, Professor Liu suggests that China can learn some lessons for its own growth. For example, innovation has become an increasingly important factor in economic development. China has been investing and will continue to invest in scientific and technological innovation, especially after entering the high-income development stage.

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Editor:Yao Xinyu,Bianji)

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