From the development course of the world economy，one can see that Japan，South Korea and other countries on the upper-middle-income level，through a series of reform，have successfully accomplished the transition to high-income status，while Latin American countries have long been in the so-called “middle-income trap”，where problems like the halting of the industrial transformation and upgrading，the slowing down of growth，structural problem，unfair income distribution and various conflicts gradually appear. In 2011，the per-capita GDP reached $5445，which made China a member of the middle-income countries. So far，one of the biggest challenges facing China’s economy is how to cross the middle-income into the high-income rank. Therefore，an investigation into the root of the “middle-income trap” and the law of transformational development will help our country speed up the transformation of the economic development mode，so as to realize a sustainable development. From the perspective of the “middle-income trap”，this thesis tries to elaborate on such a view：the “middle-income trap” in nature is a trap of low industrial level；to cross the “middle-income trap” it is necessary to realize the strategic transformation of economic development and to turn to an altered industrial path.

CaoZhongxiong:Cao Zhongxiong，doctorate of the China Centre for SEZ Research at Shenzhen niversity，researcher at the CDI（Shenzhen）. Research direction：industrial economy. This paper is a stage achievement of the major subject—Research on the Institutional Transitions of SEZ from Key Research Base for Ministry of Education Humanities Social Sciences philosophy and also of the social sciences “twelfth five years” plan subjects.