Correlations: The Middle-Income Trap
As labor costs rise in emerging economies, they must boost productivity, improve education, and master innovation to fully develop
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Speaking on June 6 in Chengdu, China, Executive Vice Premier Zhang Gaoli said his country “has to stand up to the test of striding over the ‘middle-income trap.’ ” Zhang was referring to a well-known phenomenon: Many nations can move from low-income to middle-income status, but as labor costs rise only countries that boost productivity, improve education, and master innovation fully develop.