CHINA'S EDUCATION EVOLUTION AND ITS IMPACT ON ITS ECONOMIC GROWTH - María Victoria Retondaro

Today’s Chinese educational system is the biggest of the world. It is important to know how education favored the country’s growth.

Since market-based economic reforms were introduced in 1978, China has become the world's fastest-growing major economy. Right now, it is the world's second-largest economy, after the United States, by both nominal GDP and PPP. China is also the world's largest exporter and second-largest importer of goods. On per capita terms, China ranked 90th by nominal GDP and 91st by GDP (PPP) in 2011, according to the IMF.

How education is structured in China?

Primary and secondary education takes 12 years to complete, distributed into primary, junior secondary and senior secondary stages. The nine-year schooling in primary and junior secondary schools affects to obligatory education.

Implementation of the nine-year compulsory education

Since 1986 when the "Compulsory Education Law of the People's Republic of China" was promulgated, the nine-year compulsory education has been applied by governments. According to the statistics of 2002, the enrollment rate of primary school age children attained 98%, and the proportion of primary school graduates continuing their study in junior secondary schools reached 97%. In the urban areas of large cities and economically developed coast areas, the universalization of senior secondary education has been set.

Chinese government confers abundant importance to the universalization of compulsory education in rural, poor and minority areas. Basic education is delivered by the governments at the county, township and administrative villages levels. Efforts have been made to integrate the development of education and the advancement of quality of labor force with the development of the local economy and the progress of culture and ethical living standard of the people.

Literacy rates progression

The history and progress of China’s literacy is an important part of the country’s overall educational health. History shows that China has long held literacy as an important “moral template for cultural identity and modernity.” Wisdom and education have always been highly regarded in China, and literacy campaigns appeared throughout the 20th century and still continue nowadays.

 

In 2009, Chinese students from Shanghai achieved the world's best results in mathematics, science and literacy, as tested by the Programme for International Student Assessment (PISA).

The evolution of Chinese higher education and its impacts on the country’s growth

In only a few years, Chinese higher education has been transformed from an education for the elite to one for the public (this process commonly takes several decades to accomplish for other countries).

Since 1999, according to statistics from the Ministry of Education, China has expanded enrollment in higher educational institutions.

Higher education in China has played an important role in the economic construction, scientific progress and social development of the country thanks to developing a large scale of advanced talents and experts for the construction of socialist modernization.

Since the Chinese economic system used to be highly centralized, to adapt to that, the higher education system in the past was also centralized.  Education was provided by the central and local governments respectively and directly under their administration.

This system had many disadvantages.  One important defect was that the state assumed too many responsibilities and the schools lacked the flexibility and autonomy to provide the education the students needed.  There were local governments and central departments  providing education independently, because of that the structure of education was irrational and segmented. This resulted in too many single disciplinary higher education institutions and professional higher education institutions. 

Consequently, the efficiency of some higher education institutions fell very low.  As a result, this reduced the improvement of education quality. The structural reform of higher education has been crucial for other higher education reforms. 

China has reformed its higher education system, which is having a positive and direct impact on China’s economy. The old system in which the state undertook the establishment of all higher education institutions has been broken and in opposition, the development of higher education institutions run by social forces are fully encouraged and supported.  The new system implies that the government takes main responsibility with the active participation of society and students.

Student loans have emerged due to the point of view that all citizens should enjoy the legally equal right of receiving higher education. Considering the local economic development, a new system in which all students should pay reasonable contributions to their own higher education has been set.

The progress that China’s educational system has made also helped unemployment rates in China fall. China is generating much more new graduates and 3.8 million were available for the workforce last year, which is 4.5 times the total of 1998.  In China, a very large percentage of the workforce has completed four years of college, as a result, today’s workers enter the labor market with much more knowledge.  Education and training levels rise and productivity at the same time. This increase in labor skills and education in the labor force is a major source of productivity growth.

The combined land area of university campuses in China has almost doubled from 2002 to 2006, the more that the institutions of higher learning spread out, the more positive impacts will have on China’s economy.

A vital source of productivity advancement is research and development. In recent years, taking advantage of their talents, knowledge, science and technology, the colleges and universities emphasize the practical research and development in light of economic construction of China and made great effort to serve economic construction. Moreover, Chinese universities have got involved in the construction of science parks and combine industry, teaching and research together to turn the scientific and research findings into real productivity and spread them to the whole society.

Chinese government assigns countless importance to the international cooperation and exchanges of higher education. Since the reform and opening to the outside world in 1978, international cooperation and exchanges of higher education have become more and more active achieving fertile outcomes. By opening to the outside world, Chinese broadly learn the useful foreign experience, promote the reform and development of their higher education and enhance mutual understanding and friendship between China and other countries.

Some findings

Demurger, in 2001, used a panel of 24 provinces over the years from 1984 to 1998 to estimate a relationship between the proportion of population with a secondary or higher education and per-capita growth. Moreover, Chen and Feng, in 2000, estimated a cross-sectional growth equation for 29 Chinese provinces from 1978 to 1989. The results were: the proportion of university enrollment has a significant effect on provincial economic growth rates. Wang and Yao, in 2002, found out that human capital contributed considerably to economic growth in China over the period from 1952 to 1999.

There is enough evidence to show that education impact on production is substantial. Highly-skilled and talented individual increase productivity directly and indirectly, through the allocation of resources and the adoption of new technology.

The importance of investment in human capital for economic growth is supported by an extense body of evidence. Higher levels of education contribute to worker productivity directly and in China´s transitional economy.