Proceedings of the 40th International Academic Conference, Stockholm

THE ‘LEWIS TURNING POINT’ IN CHINA AND ITS IMPLICATION FOR THE EMERGENCE OF A ‘MIDDLE INCOME TRAP’: EVIDENCE FROM PROVINCIAL DATA

JOHN HICKS, CLAIRE HARVEY

Abstract:

Economic development in China has major implications for the world economy. A China which pushes on to become a high income economy will command considerable influence on the world stage. However, to the extent that China is caught in a middle income trap (MIT), that influence may be mitigated. The literature suggests that the emergence of the Lewis Turning Point (LTP) will signal the possible onset of a MIT. This paper, therefore, pursues the question of whether or not a LTP has been reached in China – an issue of some debate in the literature – through the application of provincial data to a simple fixed effects econometric model designed to detect the presence of a LTP.

Keywords: Middle Income Trap; Lewis Turning Point; China

DOI: 10.20472/IAC.2018.040.025

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