Keywords "middle income trap"? Labor Cost Competitiveness of Middle-income Countries in China and Latin America
In recent years, domestic academic circles have paid great attention to the "middle income trap". Enter "middle income trap" in Google's search engine, and you can get 6.5438+0.2 million results. However, when studying this topic, many scholars misinterpreted the meaning of this concept and put forward some incorrect views. This paper attempts to start with the definition of "middle income trap", point out the misunderstanding of this concept in domestic academic circles, and answer the crucial question of whether Latin America and China are caught in the "middle income trap".
First of all, what is the "middle income trap"
About the origin of the concept of "middle income trap", there is such a knowledge in academic circles at home and abroad: it was originally put forward by the World Bank. By searching the Internet, we found that the World Bank published a report on how East Asia responded to the global economic weakness in June 2006. In this report, economists of the World Bank pointed out that "if middle-income countries want to prosper, they must take some different measures. This proposal is consistent with the growth rate of middle-income countries. " These economists also believe that middle-income countries are sandwiched between poor countries with lower wages and stronger competitiveness and innovative developed countries. However, this report does not use the term "middle income trap". ?
In 2007, the World Bank published a research report entitled "Revival of East Asia: Views on Economic Growth". In this report, economists of the World Bank believe that due to the lack of economies of scale, middle-income countries in East Asia have to strive to maintain their unprecedented high growth rate. The strategy based on the accumulation of production factors may lead to continuous deterioration. This consequence is bound to happen, because the marginal productivity of capital will decline. Latin America and the Middle East have been middle-income regions for decades, but they can't get out of this trap. This is the first time that the World Bank mentioned the "middle income trap".
In 20 10, the World Bank published a research report entitled "Strong Growth and Risk Increase". In this report, economists of the World Bank believe that many economies in Latin America and the Middle East have fallen into the middle-income trap for decades. In this trap, as high-yield and low-cost producers, they try to remain competitive in the face of rising wage costs, but they cannot upgrade their value chain or enter the expanding market of products and services based on knowledge and innovation. ?
Although the economists of the World Bank failed to clearly define the exact meaning of the "middle income trap" in the above three reports, we can draw such a conclusion between the lines: after a country enters the ranks of middle-income countries, with the increase of per capita income, labor costs will rise, but its industrial structure and scientific and technological innovation have not improved or made significant progress. As a result, it can neither compete with other developing countries with lower labor costs nor with developed countries, thus falling into a dilemma. In other words, the "middle income trap" mentioned by the World Bank does not refer to all the problems encountered by a developing country on the road to development, but refers to a "dilemma" situation encountered after the rising labor costs.
The analysis of the definition of "middle income trap" by some foreign scholars may help us understand its true meaning. Like Peruvian scholar Luis? According to Luis abugatas-Majluf, the only way for Jordan to cope with the "middle income trap" is to transition to skill-intensive, advanced technology and higher labor productivity. Vikram of Carnegie Endowment for International Peace? Vikram Nehru believes that Indonesia can avoid falling into the "middle income trap" only by vigorously developing its manufacturing industry and reducing its dependence on the export of primary products. ?
Japanese scholar Kenichi Ono believes that the middle-income trap is the "glass ceiling" between the second and third stages. The first stage is the simple manufacturing industry under the guidance of foreign capital; In the second stage, supporting industries began to develop, and technology was acquired through direct purchase from abroad or introduction of foreign direct investment. In the third stage, domestic enterprises have mastered the technology and management experience needed to produce high-quality products; The fourth stage is characterized by innovation and product design. ?
American scholar Eva? Eva Paus believes that the "middle income trap" describes such a state: on the one hand, a middle-income country cannot compete with low-income countries when producing general export products; On the other hand, this country has not yet established the ability to produce knowledge-intensive and technology-intensive goods and services. Therefore, the core of the "middle income trap" is that it cannot develop into a higher knowledge-intensive industry. She pointed out that economic development is a process of economic and social change. In this process, the production structure is constantly evolving to production activities with higher added value. In other words, middle-income countries always face the challenge of how to transition from commodity production to knowledge-intensive production activities.
Pass also believes that China has become a strong competitor in the field of international trade, so it is difficult for many middle-income countries to compete with China in low-wage intensive production; At the same time, these countries have not yet cultivated the production capacity to compete with developed countries in the field of high productivity. Therefore, they are in danger of falling into the "middle income trap". ?
Of course, we don't agree that Pass blames China for other middle-income countries falling into the "middle-income trap". However, it can be seen from the statements of the above foreign scholars that the concept of "middle income trap" is relatively narrow. It doesn't mean all the problems and challenges a country encounters on its development path, but only how to make corresponding adjustments to the industrial structure after the labor cost increases.
16,2013 There is an article about the "middle income trap" in The Economist published in February. Explaining the "theory" of the "middle-income trap", this article wrote: "Rich countries boast of having the best technology, while poor countries boast of having the lowest wages. Middle-income countries have neither the best technology nor the lowest wages." The implication is that middle-income countries are caught in a passive situation of dilemma. This paper holds that middle-income countries can avoid falling into this trap through system construction.
However, in domestic academic circles, the definition of "middle income trap" is often misinterpreted as the following three meanings: First, some developing countries have been stumbling on the road of development for a long time after entering the middle income stage, thus failing to rank among the high-income countries. Second, after entering the middle-income stage, a series of economic and social problems accumulated by some developing countries in the low-income stage will be concentrated. In addition to weak economic growth, these countries are also facing problems such as increasing poverty, "three rural issues", difficulty in labor transfer, excessive urbanization, unfair income distribution, serious polarization, fragile financial system, high inflation rate, weakened social cohesion, widespread corruption, drug abuse and deterioration of social security. Third, some developing countries fall into the "middle income trap" mainly because the original growth mechanism and development model are out of order, the government cannot cope with various challenges and systemic risks in the political, economic and social fields, and weak domestic demand leads to excessive dependence on external demand, and so on. ?
In 20 10, People's Forum magazine, after consulting 50 domestic experts and scholars, listed ten characteristics of countries caught in the "middle income trap": slow or stagnant economic growth, democratic chaos, polarization between the rich and the poor, frequent corruption, excessive urbanization, shortage of social services, employment difficulties, social unrest, lack of faith, and fragile financial system. Many articles published in magazines believe that Latin American countries have fallen into a "middle income trap". ?
To sum up, in domestic academic circles, many people regard the "middle income trap" as a "basket" and put all the problems encountered by middle-income countries (especially Latin American countries) into it.
Second, the "middle income trap" is not a "digital game"
The World Bank's definition of "middle income trap" fails to tell us clearly how to judge whether a country has fallen into this trap. However, some scholars believe that in 2009, the World Bank regarded the economies whose per capita gross national income (GNI) exceeded 12 196 as high-income economies, and those whose per capita GNI ranged from 996 to 12 195 as middle-income economies. Therefore, if a country's per capita income fails to reach this goal for a long time, it can be regarded as falling into the "medium". They also asserted that "20 1 1 is the first year for South America to get rid of the' middle income trap'", because according to the statistics of relevant international organizations, the per capita gross national income of Chile and Uruguay in 20 1 1 year exceeded that of the World Bank in 201year. ?
It is inappropriate to take whether a country's per capita gross national income is greater than a specific figure as a criterion for whether it has crossed the "middle income trap".
First, what is a long-term wandering in the middle-income stage? "Long-term" is obviously an ambiguous adverbial of time, and how many years is "long-term" is obviously a time adverbial of different opinions. Moreover, the expression "long-term" also underestimates the difficulty of development. American economist W.W. Rostow believes that the economic development of all countries in the world has to go through five different stages, namely, the traditional society, the stage of creating the premise for "take-off", the stage of "take-off", the stage of "maturity" and the stage of high consumption of people. He believes that the process from the "takeoff" stage to the "mature" development stage takes about 60 years. It can be seen that it is a long process for developing countries to jump from the middle income stage to the high income stage.
The history of world economic development shows that among the more than 100 developing China countries in the world, after all, several countries can stand out. It is hard to imagine that more than 100 developing China countries can rank among middle-income countries and high-income countries in a relatively short period of time. It should be noted that when the per capita gross national income of developing countries is increasing, the value of developed countries is also increasing, and the "threshold" of high income will also be raised. More importantly, middle income and high income are relative. Without middle-income countries, there will be no high-income countries. Therefore, to a certain extent, there will always be some countries in the world that are always at a disadvantage in the process of catching up with other countries.
Second, taking GNI per capita as a sign of jumping out of the "middle income trap" is tantamount to a "numbers game". As mentioned earlier, in 2009, the per capita gross national income needed to get out of the "middle income trap" was $65,438+$0.265,438+$0.96; 20 1 1, the per capita gross national income of high-income countries increased to 12276 dollars, so the height of getting out of this trap increased by 80 dollars. This means that whether a developing country can jump out of the "middle income trap" depends on whether the dividing line set by the World Bank has changed, no matter how much the industrial structure of this country has changed. This is a ... Second, because the indicators set by the World Bank for high-income economies are dynamic, countries that have jumped out of the "middle income trap" this year may fall into this trap again next year. The reason for this kind of entry and exit is that the "threshold" set by the World Bank for high-income economies has been mechanically copied.
We can also ask: Take 2009 as an example, If a country's per capita gross national income is 12 195 USD (that is, less than the "standard line" of high-income economies determined by the World Bank 1 USD) or 12 194 USD (higher than the "standard line" of high-income economies determined by the World Bank) Can $2,000 (less than the "standard line" of high-income economies set by the World Bank 196) be considered as jumping out of the "middle income trap"? We can't even rule out the possibility that some politicians may use the method of "cooking accounts" to increase the per capita gross national income of their countries or regions in order to jump out of the "middle income trap".
In addition, the per capita GNI in US dollars is easily affected by exchange rate factors. We can make such a bold imagination: due to major changes in exchange rates, the gross national income of some countries in the world may rank among the middle-income economies, or fall from the ranks of high-income economies to the ranks of middle-income economies. Such "jumping out" or "jumping in", the industrial structure, competitiveness and technological innovation ability of this country may not have changed significantly.
If per capita income is introduced into the concept of "middle income trap", it may make a big joke. For example, let's assume that a country's per capita income cannot rank among the high-income economies for a long time for various reasons, and it can only wander in the "middle income trap". However, the weather is unpredictable. One day, the country was hit by a major earthquake or other natural disasters, and countless people lost their lives. Undoubtedly, due to the sharp decrease of population in this country, its per capita gross national income will rise rapidly, reaching or exceeding the standard line of high-income economies, so it will jump out of the "middle income trap". It is incredible that a natural disaster can make a country jump out of the "middle income trap". For another example, in 2009, Libya's total population was 6.42 million, its GDP was 58.8 billion dollars, and its per capita GDP was only 9 1.589 dollars. This shows that Libya has not jumped out of the "middle income trap". If we assume that the war of 20 1 1 broke out in 2009 ahead of schedule and that the population of Libya was reduced by1600,000, then the per capita GDP of Libya will reach 12 199 USD. Isn't it funny that a war actually made a country jump out of the "middle income trap"?
Third, it takes a long time and hard work for the per capita gross national income of a populous country to reach the standard of a high-income country. For example, the population of China has greatly exceeded1300 million. No matter according to the high-income economic index (12 196 USD) determined by the World Bank in 2009 or the new standard (1 1 USD) determined by reference to 20/kloc-0, only the total economic output of China exceeds 16 trillion USD. Today, China's economy is less than $7 trillion. It will be a long process to grow from $7 trillion to 16 trillion. Moreover, it can be concluded that the World Bank's high-income goal is bound to "rise with the tide". Does this mean that China will fall into the "middle income trap" for a long time?
Third, how to correctly understand that Latin America is caught in the "middle income trap"
When domestic academic circles discuss the "middle income trap", they often regard Latin America as a negative textbook. For example, some people think that "Brazil, Argentina, Mexico, Chile and Malaysia all entered the ranks of middle-income countries in the 1970s. Until 2007, these countries were still struggling in the "development stage" with a per capita GDP of 3,000 to 5,000 US dollars. In the same period, only a few countries and regions such as Japan, South Korea and Singapore jumped out of the' middle income trap'. Others believe that Latin American countries have experienced economic stagnation for more than 30 years after experiencing rapid development in the 1960s and 1970s. At that time, these countries mainly adopted the industrialization strategy of import substitution and focused on developing large enterprises. The urbanization process is too fast and the inequality between the rich and the poor is very serious. The rapid economic growth makes people's expectations rise faster than the economic growth rate, which brings great pressure to the government's social security, and eventually leads to high foreign debt and fiscal deficit, serious inflation and repeated financial crises, which brings great losses to economic development. " ?
It is debatable to regard Latin America as a "specimen" or "typical" of the "middle income trap".
First, most Latin American countries have not stagnated for a long time after entering the ranks of middle-income countries. It is true that in the 1980s, due to the debt crisis and economic crisis, the economic growth rate of Latin American countries was very low, even negative in some years. But the so-called "stagnation" lasted less than a decade. After entering the 1990s, Latin American economy once again embarked on the road of recovery. Except for 2009, which was affected by the international financial crisis, the growth rate in other years was positive, with a high growth rate in most years and even close to 6% in some years.
Second, slow economic growth, worsening poverty, prominent issues concerning agriculture, rural areas and farmers, accelerated urbanization, unfair income distribution, serious polarization, declining social cohesion, widespread corruption, drug abuse and deterioration of social order are not only the "patents" of Latin American countries, but also chronic diseases of other developing countries and even some high-income countries.
Third, when discussing Latin American disease, Latin American beautification, Latin American trap and Latin American phenomenon, we regard various problems encountered by Latin American countries in the process of economic and social development as typical symptoms; When discussing the "threshold of 1000 USD", these problems were said to be the arguments that Latin America failed to cross this "threshold"; When discussing the road of Latin American modernization or Latin American development, these problems are regarded as negative teaching materials for its "failure"; When discussing the effectiveness of Latin American economic reform, these problems are characterized as the inevitable consequences of "neoliberal reform"; Now we are discussing the "middle income trap", and these problems are presented as strong evidence. This research method is obviously inadequate.
Of course, we can't ignore the following two facts: first, the labor cost in Latin American countries is rising, and the negative effects brought about by it are obvious. For example, in 1980s and 1990s, American multinational companies moved a large number of factories from Mexico and other countries to China and other developing countries in Asia. Second, it is difficult for most Latin American countries to reduce their dependence on the export of primary products. Former Venezuelan oil minister Juan, who played an important role in the establishment of the Organization of Petroleum Exporting Countries? Pablo? Perez? Alfonso said in 1970, "Ten years later, twenty years later, you will see that oil has brought us (Venezuela) destruction, ... oil is the excitement of the devil."
Therefore, if we must say that Latin America has fallen into this trap, then we should point out that this trap refers to the adverse consequences caused by rising labor costs and excessive dependence on the export of primary products, and is not an all-encompassing problem encountered by the region in the field of economic and social development.