The middle-income trap describes a situation in which a country, having attained a certain income level, gets stuck there (due to given advantages). The high-income trap is of a similar nature, because although the positioning of these economies might be more advantageous to begin with, they find it difficult to promote innovation in manufacturing or upgrade to higher value-added services to remain competitive and provide benefits to a wider spectrum of society.
In this episode of The Sound of Economics, Giuseppe Porcaro and Alicia García-Herrero are joined by Syaru Shirley Lin, Compton Visiting Professor in World Politics at the Miller Center of Public Affairs at the University of Virginia. They discuss the middle/high-income trap in East Asia, and especially in China. Is the high-income trap different between East Asia and Western Europe, especially in terms of their economic relationship with China? How has COVID-19 changed the economic landscape?
This episode is part of the ZhōngHuá Mundus series of The Sound of Economics.
ZhōngHuá Mundus is a newsletter by Bruegel, bringing you monthly analysis of China in the world, as seen from Europe.