BEIJING – Over the last 35 years, China’s strong and sustained output growth – averaging more than 9.5% annually – has driven the miraculous transformation of a rural, command economy into a global economic superpower. In fact, according to the World Bank’s most recent calculation of the purchasing power of aggregate income, China is about to overtake the United States as the world’s largest economy. But, in terms of the quality and sustainability of its growth model, China still has a long way to go.
Despite its remarkable rise, China’s per capita income, at $10,057 (adjusted for purchasing power) in 2011, ranks 99th in the world – roughly one-fifth of US per capita income of $49,782. And reaching high-income status is no easy feat. Indeed, many countries have tried and failed, leaving them in a so-called middle-income trap, in which per capita income levels stagnate before crossing the high-income threshold.