China's future growth prospects: Heading toward a middle-income trap?

04/30/2013

Yingying Xu, Ph.D., economist
While the consensus among researchers is that China is nearing or already at the end of its high-growth era after more than three decades of double-digit economic expansion, there is still heated debate about what the new normal growth rate will be, whether the downward shift will be gradual and modest or abrupt and profound and whether China will be stuck in the so-called "middle-income trap." Forecasting the timing and magnitude of China's growth slowdown is an imperfect science, but it is clear that China is at a crossroads, and how the government responds to these challenges will play a crucial role in determining whether China can settle down smoothly around its new potential growth rate. Issues in Brief

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