Strong Leadership Necessary to Avoid 'Middle Income' Trap

Political steps for China

Now, back to the question at the beginning of this article: Can China smoothly transit from a medium per capita income level to high-income status? Many scholars and observers have already pointed out their optimism in this regard. However, the key here is not economy but politics. With effective political development, it will be possible for China to enter the high-income bracket in the coming twenty years. But if it suffers political setbacks, China could fall into the "medium-income trap" like other countries in the region have done.

There is reason for the Chinese people to worry about this. Over the past several years, China has been suffering from weak political leadership. The ruling party is seeing a great number of vested interest groups inside itself, which aim to divide the existing pie instead of making the pie bigger. Even if the pie grows larger, these interest groups want to claim more of the pie for themselves.

Strictly speaking, the Communist Party of China now has many ideologies, not just one. Although the Party theoretically maintains democratic principles within itself, various interest groups comprise the intraparty democracy, while national politics is manipulated from behind the scenes. These interest groups tend to stick to their own respective ideologies. Each vested interest group attempts to make its own ideology the official party line. If this situation continues, it is very possible that China will once again decline before it will rise further, like what happened during the Ming Dynasty.

In terms of China's political future, the 18th National Congress of the Communist Party of China is especially meaningful. Whether China can transition from short-term-oriented, fast-paced growth to long-term medium growth, and from medium income to high income status, depends on a strong and powerful leadership to keep vested interest groups in check and push for sustainable development. The country is waiting to see whether its newly elected leaders are up to this arduous task.

The author is director of the East Asian Institute of the National University of Singapore.

(This article was first published in Chinese and translated by Li Bin.)

Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.