PROMOTING SYSTEM REFORM AND GETTING OUT OF THE MIDDLE-INCOME TRAP — FROM THE PERSPECTIVE DRIVEN BY EMOTION AND PSYCHOLOGICAL BEHAVIOR
Authors: Liu Chenggang , Dong Jing , Shen Diao , Liu Huifang , Wang Chanchan 
Published: July 2022

Background

In recent years, China's per capita income has reached the upper limit of developing countries and is about to become a high-income country. However, with the acceleration of China's aging process and the deepening of the technology embargo against the United States, some studies show that China's economic growth has slowed down. Academia began to explore whether China has fallen into the middle-income trap, and tried to explore the middle-income trap from the perspective of psychosocial reconstruction.

Theme and Methods

Under the background of China entering the era of monopoly economy, this paper analyzes the aging population, the polarization between the rich and the poor, and the guidance and control of vested interest groups on China's economic slowdown. This paper uses the neoclassical economic model to explain the middle-income trap. At the same time, this paper studies the impact of income changes on the emotional regulation of middle-income families. This study refers to the existing literature and adopts the emotion regulation scale to select eight emotions: happiness, love, satisfaction, anger, anxiety, tension, frustration and helplessness. The first three are positive emotions and the last five are negative emotions; Using Likert's 5-point rating method, give a rating of 1-5 points from “never” to “always”. The higher the score, the higher the frequency of experiencing the emotion in classroom teaching. In this study, the 0 coefficients of positive emotion and negative emotion were 0.83 and 0.80 respectively.

Results

The vested interest groups represented by monopoly groups no longer carry out technological innovation under the constraint of unable to obtain foreign advanced technology, but strive to make use of institutional defects, or even create institutional defects. They guide public opinion and exercise psychological and social control over government officials and the public, which is beneficial to them and safeguard and strengthen their own economic interests. The study found that the main reason for China's economy falling into the middle-income trap is the adverse impact of vested interest groups on economic development in terms of system and social psychology. As the economy enters the era of monopoly, this impact has changed from positive to negative. Through the research, we found that when the ownership income changes, the emotion and behavior will also change to the corresponding positive stage and depression level. Therefore, we can think that groups with high internal psychological capital can alleviate the psychological pressure, anxiety and depression brought by psychological capital to a great extent through their own psychological quality. Farmers with high level of individual psychological capital are relatively less affected by family factors, work and life, traffic safety, their own health and future fear. Farmers with high level of psychological capital can better deal with the impact of family factors. They are full of hope for the future, optimistic about life and less worried about the impact of life.

Conclusion

This paper points out the institutional risk factors faced by China's middle-income trap, and puts forward some suggestions on how to reform China's middle-income trap: reposition the government function from promoting economic construction to night watchman function; Reform the income distribution system in the aspects of inheritance tax, gift tax and real estate tax as soon as possible; Establish a rule of law economy, effectively protect intellectual property rights, implement anti-monopoly laws and anti-monopoly measures as soon as possible, reform the current system, reshape social psychology, and strengthen inter provincial political and economic exchanges and communication. With the further reform of China's current system, especially the real establishment of a society ruled by law and the further development of democratic politics, China's economy will cross the middle-income trap.

Acknowledgements

Supported by a project grant from Shandong Provincial Bureau of Statistics: Research on the current situation and Countermeasures of high-quality development of private economy in Shandong Province under the background of the transformation of old and new kinetic energy SDJJPC15.