Investing in Education in China.docx
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Investing in Education in China.docx
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InvestinginEducationinChina
InvestinginEducation,HumanCapitalandEconomicDevelopment
Theeducationallevelofitscitizenssaysalotaboutacountry'seconomicdevelopment.Itisagoodindicatornotonlyofthestageofeconomicdevelopmentalreadyreachedbutalsoofthepotentialforfuturegrowth.Anation'sprecioushumancapitalisnurturedthrougheducationandpromotedthroughthelabormarket.ThisisthenationalresourcethatmorethananyotherwilldeterminesuccessintermsofGDP,investmentenvironmentandsoonasnationscompeteintheglobalmarketeconomy.
WeiYuisanacademicianwiththe ChineseAcademyofEngineeringanddeputydirectoroftheCommitteeforEducation,Science,Culture,HealthandSportsundertheNationalCommitteeoftheChinesePeople'sPoliticalConsultativeConference.SheaddressedtheissuesofpopulationandeducationinChina,andtherelationshipbetweeninvestmentineducationandeconomicgrowth.Herearethemainpointsofherview:
Therearefivebasicnationalpolicies.Theconceptofhumancapitalrelatestothreeoftheseintheareasof:
improvingthequalitywhilecontrollingthequantityofthepopulation,andsotransformingwhatcouldotherwisebeahugeburdenofnumbersintoprecioushumancapital;scienceandtechnologyasthekeytorevitalizingthenation;andtalentsasakeytobuildingastrongnation.ThatChina'seconomywillbeincreasingatthecurrenthighrateforthenext20yearsdepends,toalargeextent,ontheimplementationofthesebasicnationalpolicies.
Let'sfirsttakeaquicklookatthefactsandfiguresconcerningChina'spopulation.Providedcurrentpatternsoffamilyplanningaremaintained,bytheyear2043populationgrowthwillhavebeenbroughttoahaltandChinawillbeanationof1.6billioncitizens.
Twodemographicproblemsstandout,thesearegenderratioandpopulationaging.Statisticsfromthefifthnationalcensusconductedin2000showthattheratioofmalestofemaleshasreached117:
100.Malesoutnumberfemalesby12.77millionintheagegroupof0to9years.
Thenumberofpeoplejoiningtheranksoftheseniorcitizensisincreasingatanunprecedentedrate.Peopleovertheageof65willaccountfor11.8percentofthetotalpopulationby2020andwillmakeupaquarterofthepopulationbythemiddleofthecentury.
Tomakematterworse,populationagingismoremarkedinruralratherthaninurbanareas.ThegeneralruleofthumbisthatdevelopedcountriesstarttoacquireanagingpopulationwhentheirpercapitaGDPreachesUS$10,000.ButnowChina,adevelopingcountrywhosepercapitalGDPislessthanUS$1,000,hasalreadyjoinedthisgroupofcountrieswithagingsocietiestosupport.Thisbringsgreatchallengesinprovidingmedicalcareandsocialsecurityfortheelderly.
Now,let'sturntoeducation.Theconceptofhumancapitalwasfirstraisedinthe1950sbyaneconomistnamedTheodoreW.Schultz.Humancapitalreferstoworkingabilitiesacquiredthroughinvestmentineducation,training,andhealth.Theseworkingabilitiesareanintegralpartoftheindividual.Educationplaysakeyroleinaccumulatinghumancapitalandineconomicgrowth.Theconceptofaknowledge-basedsocietyisreplacingtheearlierconceptofaknowledge-basedeconomy.
Firstandforemost,developingcountriesneedtodevelopbasiceducationasanessentialprerequisiteforbuildingastablesociety,andforadvancingcivilization,developingdemocracy,protectingtheenvironmentandsoon.
Thenextchallengeistodevelopthevocationaleducationandtrainingnecessarytoproduceaskilledlaborforcecapableofbuildinganindustrialnation.
Peoplewhohavebenefitedfromhighereducationareneededinaknowledge-basedsociety.Thisisespeciallythecaseforthosewhoareresourceful,creative,andwell-informeddecision-makers.Wearenotshortofinformationandknowledgeintoday'sworldwithitsinformationexplosionandthebreak-neckpaceofdevelopmentininformationtechnology.No,whatweareshortofarethewisdomandcreativitythataresonecessarytoperceivenewinnovativeusesofthatknowledgeandinformation.
Inthissense,wisdomandcreativityaremoreimportantthanknowledgeandinformationandtheobjectiveofhighereducationistoturnoutthinkingpeoplewhohavemanagedtodeveloptheirwisdomandcreativity.
Currentlytherearesome300millionstudentsinChina.Theenrollmentandretentionratesintheprimaryschoolsystemarebotharound90percentwhileinthejuniormiddleschoolstheseratesarearound80percent.
Theenrollmentrateininstitutionsofhigherlearningisaround17percentforstudentsintheagegroup18to22.Thisrepresentsalmost20millionstudents.
Alltheseachievementshelptheinvestmentenvironment,whichinturn,contributestotherapidincreaseintheinflowofforeigninvestment.ManyarticleshavebeenwrittencomparingtheinvestmentenvironmentinChinawiththatinIndiaandconcludingthattheChineselaborforceisbasicallymoreproductive.
TheChineseMinistryofConstructionrecentlycarriedoutasurveyontheeducationallevelofmigrantworkers.Itshowedthatonaverage,thosesurveyedhadeightyearsofformaleducationshowingthegreatprogressthathasbeenmadeinbasiceducationinChina.
Ishouldliketopresentthreepointsofviewrelatingtoourapproachtoeducation:
First:
educationrepresentsinvestmentratherthanconsumption.Itisalong-terminvestmentmadebythegovernment,society,thefamily,andtheindividual.Itisnaturalforeachofthesetoplaytheirpartandtosharetheresponsibilitybecauseeducationisnotacommercialactivitybutsomethingwhichisundertakentopromotethepublicgood.Toignorethissharedresponsibilitywouldbetohinderoureducationaldevelopment.
Second:
simplylookingtoindicesinthedevelopedcountriesasindicatorsofeducationaldevelopmentisnottheanswer.Forexample,enrollmentratesininstitutionsofhigherlearningintheformerSovietUnionandtheeasternEuropeancountriesreached40percentsometwentyyearsago.Butcouldwesaytheydidagoodjobindevelopingtheireconomies?
Third:
afairsystemofeducationisonethatcanprovidepeopleofdifferentabilitieswithwhattheyneedandenableeveryonetorealizetheirpotential.Thisholdstrueforbasiceducation.Educationthatcanofferonlythesameapproachtopeoplewithdifferentabilitiesistheworstkindofeducationintermsoffairness.Thisisanimportantissueforpublicdebate.
Chinashoulddevelopitseducationwithaneyetothedemandsofthelabormarket.Employmentisundergreatpressureas200millionsurplusruralworkersputpressureonthejobsoftheirurbancounterparts.Therefore,greateffortsshouldbemadeindevelopingvocationaleducationandtraining,andasystemof"educationforlife"shouldbedeveloped.
Atpresent,peopleareenthusiasticaboutdevelopinghighereducationandsubstantialresourcesareflowingintotheinstitutionsofhigherlearning.Itistimetoputthebrakesonthisandcooltheoverheatingininvestmentinhighereducation.
Ifweweretouse100asabasetorepresentthecapitalinvestedineducatingaprimaryschoolstudent,thenthefigurewouldbe200foramiddleschoolstudentandashighas1,600foracollegegraduate.Thisratioof16timesmoreforacollegegraduatethanaprimaryschoolstudentisthehighestintheworld.
ThinkaboutthepeopleinthevastcentralandwesternregionsofChina,whoaredeprivedoftheirrighttobasiceducationandvocationaltrainingduetopoverty.Evenifweweretosubstantiallyincreaseoverallinvestmentineducation,theywouldstillnotbefullycovered.Therefore,thepriorityshouldbeonbasiceducationandvocationaltraining.Meanwhileinhighereducation,attentionshouldbegiventohowinvestmentinthesectorcanbeusedmoreeffectivelyratherthanhowlevelsofinvestmentcanbefurtherincreased.
WemayaskourselveswhatisthebiggesteducationalchallengefacingChina?
Iwouldsayitisincreasinginvestmentineducation.Despitetenyearsofeffortwehaveyettoachievethegoalofincreasingtheratioofinvestmentineducationto4percentofGDP.Privatecapitalcomesintotheeducationalsectorinasupplementaryroletostatecapital.InChina,privateinvestmentaccountsfor44percentoftotalinvestmentineducation.TheaverageinOrganizationforEconomicCooperationandDevelopment(OECD)countriesis12percent.Chinashouldincreasegovernmentinvestmentineducation.
Anotherchallengeliesinthetrainingofexceptionallytalentedpeople.AsImentionedpreviously,enrollmentinhighereducationhasreached17percent.Thetasknowistoimprovethequalityofhighereducationsothatitcanproduceoutstandingtalents.
(CtranslatedbyNiXiaoqiang,June29,2004)
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