International experiences suggest that moving up from middle-income to high income status appears to be more complex than moving up from the low-income to middle-income range. Further, growth strategies that proved successful in earlier stages of development are less effective when moving up to higher income levels.
Thirty years of successful reform has transformed the People's Republic of China (PRC) into the world's second largest economy. Rapid growth allowed for a swift transition from a low-income to a middle-income country, but today the challenge lies in how to move up to higher-income status.
Some of the lessons learnt from international experiences might be useful in designing a strategy in the PRC to sustain growth over the longer term. In this regard, most of the needed reforms are reflected in the 12th Five-Year Plan, and embedded in the context of economic rebalancing. Therefore, the full implementation of the plan will be a key factor in the ascend of the PRC to higher income levels.