A Marxist Approach of the Middle-Income Trap in China

Abstract

Since 2012, China is confronted with a slowing down of its economic growth, and various studies about the middle-income trap wonder about the capacity of this country to reach the category of high-income per capita countries. Most of the time, the increase of wage costs, and more particularly of unit labor costs, is accused of being responsible for this slowing down, through the loss of international competitiveness in particular. Nevertheless, it is important to put in perspective this explanation, because the increase of the unit labor cost seems less dangerous than the decrease of capital productivity, which a reversion to the Marxist analysis allows us to better understand.