Social Sciences in China (Chinese Edition)

No.8, 2017

 

Building a National Innovation System with Chinese Characteristics to Vault over the Middle Income Trap

(Abstract)

 

Gong Gang, Wei Xiye, Yang Xianming et al.

 

Some doubts have been expressed over the existence of the middle income trap. On the basis of a transition probability matrix and the uniform growth theory interpretation, we clarify the queries about its existence, using a growth theory framework to research the causes, mechanisms and conditions of the middle income trap in developing countries from the perspective of technological progress. Our findings show that whether a developing country can escape the middle income trap depends upon whether the technological growth rate it achieves through independent R&D is higher than that of frontier countries. The construction of a national innovation system and the implementation of an innovation-driven development strategy in China are laying an institutional foundation that will enable the country to vault over the middle income trap.