The 'Middle-Income' Trap: Is the One Belt, One Road Initiative Key to China's Ascension to a High-Income Economy?

33 Pages Posted: 21 May 2018 Last revised: 8 Dec 2018

Date Written: May 9, 2018

Abstract

Despite being the world's largest economy, China remains a third world nation. This classification is synonymous with having a middle-income per capita economy. China has been the fastest growing economy and is on the verge of breaking its barriers, but economists have developed middle-income trap theory, which may threaten China's historic rise. In order to break through the trap, theorist suggest a country adapt their economic policies to its own economy. China may be addressing the issue another way. The One Belt, One Road initiative is a global endeavor which may expand China's economy, beyond its own boarders. The initiative may solve all of China's internal demand problems in the cement, steel, and aluminum industries. Will the OBOR initiative be sufficient?

Keywords: Middle-Income Trap, China, People's Republic of China, One Belt One Road, Economy, Global Economy, Asia, Economics, PRC, OBOR, Third-World

JEL Classification: O53, O50, P40, P43, P2, P1

Suggested Citation

Blasingame, Daniel, The 'Middle-Income' Trap: Is the One Belt, One Road Initiative Key to China's Ascension to a High-Income Economy? (May 9, 2018). Available at SSRN: https://ssrn.com/abstract=3176047 or http://dx.doi.org/10.2139/ssrn.3176047

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