Human Capital Investment and the Middle-income Trap - International Experience and Facts of China

摘要

As the "Lewis turning point" occurred and the demographic dividend disappeared, China is facing the risk of falling into the middle-income trap. Both theory and international experience show that human capital investment is the key to avoiding the middle income trap. However, human capital accumulation in China now faces problems such as impaired motivation for education, unbalanced allocation of educational resources, and insufficient higher education opportunities. In response to these, we may draw on the experience of Japan and Korea in going smoothly through the middle-income phase. China needs to increase investment in public education, improve the structure of such investment, further popularize higher education, and develop continuously vocational education and on-the-job training, so as to provide solid human capital foundation for overcoming the middle-income trap.