Will China Fall into a Middle Income Trap? Growth, Inequality and Future Instability



Thilo Hanemann,
Li Hongbin,
Liu Shouying,
T. Sicular,
Cai Fang,
Kwon Daebong,
J. Edward Taylor,
Francisco Ferriera,

Date and Time

December 6, 2011 8:30 AM - 5:30 PM



By Invitation Only.

RSVP required by 5PM December 01.


John A. and Cynthia Fry Gunn Building 366 Galvez Street Stanford, CA 94305-6015

FSI Contact

Veronica Marian


The problem: Despite the recent robust growth, there is concern that as China moves up the income ladder that its high level of inequality may be a breeding ground for future instability. We are not merely talking about the current (today’s) inequality: the 3:1 one urban to rural inequality in per capita income. More importantly, we are concerned about the implications of today’s human capital inequality between China’s cities and its poor rural areas. There are inequality gaps of 30:1 (matriculation into college); and 8:1 (early childhood education gap; and 4:1 (matriculation into fast-tracked academic high schools).

Is this a concern of development economists from the West? Or, is this something in which China’s policy making, academic and business communities are interested. In fact, China’s leaders—including those at the very top—have recently become extremely interested in understanding if anything in the nature of its economy is setting up the country to be headed on a road that could end up in a middle income growth trap.

China knows a lot about its own economy today. There are two questions that are outstanding and which this conference hopes to answer:

ONE: We are interested in what if, anything the implications of the human capital gaps on the economy and political stability (wending) of one to two decades from now.

TWO: Are there lessons from the rest of the world—yesterday, today and tomorrow—that can help formulate policy solutions to potential barriers to rapid and sustained growth?

Approach: In a one day conference at Stanford, sponsored by FSI and SCID, experts from growth, inequality, development and political economy, academics and policy people from inside and outside of China (and from inside and outside of Stanford) will contribute their knowledge.

Output: A monograph that distills the lessons from the conference, the target audience being China’s top leadership and its academic elite (who act as advisors to China’s top leadership).

This document will seek to put the current economic development process through which China is moving into international perspective. The monograph will be coauthored by Scott Rozelle, Nick Hope, Hongbin Li, Liu Shouying, Cai Fang and others.



7:45 – 8:30 Breakfast

8:30 – 8:45 Welcome: Nicholas Hope, Director, SCID, and Scott  Rozelle, Senior Fellow, APARC, Stanford University

8:45 – 10:15 Panel One

Chinese Growth and Inequality: Past and Present 

Moderator:         Jean Oi (Stanford)

Presenters:  Growth and Income Inequality: T. sicular, Professor, U. Western Ontario

Human Capital Inequality: Li Hongbin, Professor, Tsinghua University

Plenary Discussant:   Liu Shouying, Development Research Center, State Council

 10:15 – 10:30 Coffee Break

 10:30 – 12:30 Panel Two  

Chinese Growth and Inequality: Future

Moderator:   Xueguang Zhou, Professor, Stanford

Presenters:    Emerging Growth Patterns: TBD

Status and Outlook for FDI

Thilo Hanemann, Peterson Institute for International Economics

The Collapse of Rural Education: Scott Rozelle, Stanford

Plenary Discussant:             Cai Fang, Development Research Center, State Council

 12:30 – 2:00 Lunch Break

 2:00 – 3:00 Panel Three, Session I

Lessons from Outside of China for China

Inequality and Stagnation: Mexico

Moderator/Discussant: Beatriz Magaloni, Stanford

Human Capital and Mexico’s Labor Markets:

J. Edward Taylor, Professor, UC Davis

Avoiding Collapse: Brazil

Moderator/Discussant:  Martin Carnoy, Stanford

Growth, Equity and Stability: Francisco Ferriera, World Bank

 3:00 – 3:15            Coffee Break

 3:15 – 5:15 Panel Three, Session II

 Growth through Restructuring: South Korea:

Moderator/Discussant: Gi-wook Shin, Professor, Stanford University

Presenter:          The Education Hedge and Recovery from Crisis:  Kwon Daebong, Professor, Korea University

What lessons should be learned? What policies adopted?

Moderator: Nicholas Hope, Stanford

Discussants: Andrew Walder, Stanford, Paul Cavey, MacQuarrie Securities           

5:30 – 6:00Reception

6:00 – 7:30 Dinner, Vidilakas Room, Schwab Center, 680 Serra Street, Stanford


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