Is China Becoming a Knowledge Economy?
A Discussion with Students at Leiden University and Rotterdam’s School of Management
The lion’s share of China’s economic growth has come from an expanding industry, from shifts in the labour market, and from a strong export-oriented economy. Yet the question remains whether China will be able to make the jump from middle-income to high-income country (World Bank 2012). The key to such a transition lies in the quality of Chinese technology and education. As an op-ed in the China Daily recently stressed, China’s future will hinge on the government’s ability to create a “knowledge economy”. The BBC’s Linda Yueh has similarly argued that “for China to continue to grow, it needs to encourage technological innovation and human capital”.
Over the past years, the Chinese government has tried to improve its potential for research and education, creating high-profile universities, technology parks, and creative clusters. Meanwhile, books about innovators like Steve Jobs are best-sellers in China, where a new generation of university graduates is hoping to create the next great tech novelty.
Some of the critics of China’s knowledge economy point to the staggering differences between education levels, questioning whether the high praise that schools in Shanghai receive in international education tests are really representative of the country as a whole. Others look towards China’s university entrance exams and criticise not only the pressure that such tests put on young students but also the degree to which they reward specific learning strategies over critical, creative thinking. Then there are the many cases of counterfeit products that are often presented as key examples of an economy supposedly lacking creativity.
On the other hand, the situation may be far less gloomy than such reports make them out to be. For instance, the idea that counterfeiting is not creative has itself been questioned: As Michael Keane (2013) has pointed out, creativity and innovation should not be collapsed into the same thing. Incremental innovation based on the designs of others can still be progressive. Similarly, the idea that Chinese students are trained merely in rote learning does not tell the full story: scores of young Chinese are graduating with advanced degrees from prestigious institutions both at home and abroad, leading commentators like John Naughton from the Guardian to argue that “if China doesn’t become a technological innovator, it won’t be for lack of talent”.
What does it take to generate innovation? What kind of environment is needed to promote creativity? And is China’s leadership setting the Chinese economy on the right track to become a knowledge economy? These are the questions we tackle in this week’s discussion on China’s science, technology, and education policies.
References
Keane, Michael (2013): Creative Industries in China: Art, Design and Media. Cambridge: Polity Press.
World Bank (2012): China 2030 – Building a Modern, Harmonious, and Creative High-Income Society. Washington: The World Bank.
Zhen, Ye (2008): “China’s Creative Industries: Clusters and Performances“, Working Paper, Annual Conference of the Chinese Economist Association, Cambridge UK.
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About the Author: Florian Schneider
16 Comments
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I think that if China wants to reform their economy to a knowledge based economy, first the inequality in education will have to be tackled. Allocating more educational funding to local village schools can be a first step in this reforms. I would like to start this discussion by arguing that the current level of inequality between rural and urban education is alarming.
Thanks Olaf for kicking off the discussion. I do agree with you that inequality in education is a problem in China, however, I believe that allocating more funding to local village schools will not make a substantial difference. The general rural education system is already quite advanced and inclusive measuring against other emerging economies. To really transform the country to a knowledge based economy, the focus should be placed on the cities, where innovative hubs can flourish and where the brightest and most creative minds come together.
I propose that limiting the influence of the Gaokao examination on university placements and putting more emphasis on an entrepreneurial mindset will already increase creativity and innovation on a large scale. Additionally, China should emulate the US’ culture of easily accessible venture capital to allow start ups to initially fund their operations. Innovation cannot be forced by decree, so the Chinese government should create the right environment for it.
Next to that, such efforts would balance the current brain drain, which is in my opinion not to a small extent caused by innovative people looking for environments that can support their ideas (such as US, EU, Australia, etc…).
I believe that Olaf makes a valid point here. The staggering differences between education levels is a key barrier in the process of evolving to a knowledge based economy. In addition, the ‘gaokao’ exam is another vital element. Since it is one of the most influential examinations in China and students can only take this exam once a year, both teachers and students have too much pressure on it. Therefore, the current system is heavily susceptible to corruption and regional discrimination. Leaking of exam content, bribery, and other abuses are still being constantly exposed. In addition, the quotas set by the government for each province might govern unfair competition and consequently establish a non-optimal study environment. In the long run, this would mean that graduates may be of lower quality, decreasing productivity in the workplace.
I would like to combine the topic of last week’s discussion with this weeks discussion. China’s demographic change to an predominant elder society requires a well functioning education system to improve graduates’ productivity and to ultimately sustain economic growth.
Thanks Johannes for your contribution. I agree that innovative hubs should be created to avoid the current brain drain effects and to stimulate new innovations. However, I do not share the same perspective regarding the general rural education system. Although, the general rural education system is already quite advanced compared to other emerging economies, there are still vast differences with the urban areas. If China wants to become a knowledge based economy and truly catch up with its Western competitors, it definitely needs to decrease the staggering differences between rural and urban education levels. By increasing the general level of education, a greater proportion of the population is able to effectively fulfill service oriented jobs. For this reason, I support Olaf’s argument.
Prior jumping to discuss the questions, let me quote Wikipedia: “The term innovation can be defined as something original and, as consequence, new that ‘breaks in to’ the market or into society.” Here you are…, it should be new and it must be able to penetrate into the society. To start with the keyword “new”: How can the Chinese create something new if their government is constraining their access to the rest of the world? Personally, I feel that the Chinese government should open their doors and allow radical ideas to leak into the Chinese society. Through heavy discussions and criticisms, radical ideas often turn into something that is new to the current society and if that new “idea” is also useful and applicable to the society then it is called an innovative idea. This is how it works in the scientific world and this is also what it needs to foster innovation.
The Chinese is creating high-profile universities, technology parks and creative clusters; all of these sounds promising. However, these are useless and money wasting attempts if they do not change their education methodology from “learning-by-heart” to “learning-by-application”. Memorizing technologies that are founded by others will NOT enable you to innovate. The key is in the application of these technologies. By studying it and using it, this will allow you to identify the market gabs and innovate! Hence, if you would ask me whether China is on the right track to become a knowledge economy, I would say: yes and no! Yes, I do see endeavors! No, they are not changing their education methodology!
I believe that China is already on its way to becoming a knowledge economy. However, serious problems still exist in the “upgrading” of human capital, primarily due to underdeveloped education systems. Examples are the high entry barriers due to excessive tuition fees and the extremely competitive gaokao exam, the brain drain problem where top students leave China forever (mentioned by Johannes), and the underdeveloped state of educational programs for international students. In addition, distribution in education quality is highly skewed with some of the best universities in the world in cities like Shanghai and Beijing while rural areas face much lower quality in education (mentioned by Olaf).
China’s current policies seem to be in line with what Johannes suggests (correct me if I’m wrong). They entail the further promotion of education in urban areas and to establish some of the highest ranked universities in these cities. My problem with these policies (e.g. project 211 and 985) is that they are mostly geared towards the creation of high ranked top universities. Such universities tend to be restricted to the elite, worsening the already existing problem of high entry barriers to the higher education system. In my opinion China’s education policies should focus more on the masses by reducing tuition fees and making the gaokao exam less defining for potential students’ entrance to universities. These policies should promote knowledge spillovers between China’s highest ranked universities and those from less developed areas in China.
I also agree with my fellow students that the difference in education between rural and urban areas should be addressed. However, lowering the tuition fees would not help. In general, the Chinese perceive high tuition fees with high quality and good education. Low tuition fees would give them the assumption of low quality and might even trigger to think it is suspicious. I would suggest to establish a low interest loan system not based on Gaokao results for students from the rural areas to pay their tuition fees.
I would also suggest universities not to only look at Gaokao scores, but also at other factors such as extracurricular activities, which can compensate a lower score.
I would argue that the rural-urban divide on a scale of different attributes- like poverty, education and general development among others, – is something that needs to be tackled by the Chinese Government. Indonesia, Malaysia, and other countries that were part of the so-called Asian Miracle were able to cut poverty by a pro-rural focused economy that aimed to help the peopel in the rural areas to come out of poverty. In China this has not happened to the same extent, and thus there is inequality of resources, e.g. access to higher education for example.
Although my fellow students make a valid point in arguing that the current education policies limitedly accessible for the mass due to high tuition fees and high competition in the gaokao exams, I wonder if it is a wise decision to open up higher education to more people. As Brandenburg & Zhu mention, will the massification of education in China not lead to a further decrease of the education quality? And what about the higher outflow of graduates, what already seems a huge problem in current China?
True, the accessibility of education should not depend on students’ financial capability and the gaokao score. However, I argue that if China truly wants to pursue the status of a sustainable knowledge economy, education quality and the labour market for graduates should be tackled.
I agree with the previous comments that inequality in the education system should be abolished. Nevertheless, it is a very easy thing to say but difficult to apply. One of the issues behind this, is that there is a lack of good and qualified professors that could offer good and equal education level across the whole country. Furthermore, the education is controlled/managed by the local authorities and this creates further differences and inequality between regions.
In terms of the brain drain problem, I actually feel identified. Coming from a developing country and seeing something else of the world opened up my eyes. It is very hard for someone, to go abroad, to a completely different culture and way of living (get out of your bubble), learn something new about the world, and then come back to a country that is probably hundreds of years in the past. It is very hard to re-adapt and people like me or Chinese students that go abroad might have a cultural shock in their same country. I believe that, that is something that cannot be changed by any governmental policy or whatsoever. It is just a natural process.
I think Yonghui made a very important point and it leads to where I was thinking. I experienced China as a country, where students respect their teachers and authorities but in most cases would never question them. This is closely related to the “learning-by-heart” educational system.
To establish an environment of innovative thinking, the possibility and acceptance of criticism have to be made possible. This means that throughout the whole educational system, starting in pre-school and elementary, problem-solving and not solution-imitating should be focused on.
Writing this I am slightly afraid, that I (maybe we) just see it from a western point of view and maybe ignore Chinese system’s advantages but a more critical and democratic thinking would not hurt China I assume.
I also agree with Olaf, rural schools should be supported to decrease the inequality between urban and rural areas, and with Danny, exams like the Gaokao should play a less important role. Also in the western world I feel that exams like this are getting more important which I think is wrong.
This focus on exams is additionally seen as a reason for lack of social skills, practical abilities and missing imagination and curiosity. At least the last three are crucial for innovative thinking.
For those who can read German:
http://www.3sat.de/page/?source=/nano/gesellschaft/151570/index.html
I would like to add to the point that was made by Yonghui and Moritz.
To learn and to study hard does not necessarily promote creativity. As an example, in South-Korea there are a lot of highly educated students. Because of this, there is a lot of pressure on these students to be amongst the top to be sure of a good job. The graduate students largely outnumber the job vacancies. Parents make a huge investment in education and put major pressure on their children to receive high grades. So, students spend all their free time on studying books by heart. However, this leaves little time for social, cultural and creative development. The US. on the other hand, compares poorly with knowledge on mathematics and science but its students are known for their creative thinking and are great contributors to innovation. Mostly, because here a lot of emphasis is put on out of school activities and encourage students to think freely and critically. I think for China not to get into the same situation as South-Korea, they need to focus on the self-development of students as well in order to create a more innovative environment.
I believe that China is on the right way to becoming a knowledge economy. Copying ideas from others and improving this copies works to a certain height to improve the level of innovation in a country. I think that China can only be a progressive innovative country by improving the level of creativity. But, the Chinese government has to change several things.
Firstly, I agree with Olaf that the inequality of education should be addressed. As Marie points out, local governments manage and control their education system. I believe that the Chinese government should centralize the management – and control function of the education system to one coordinating organization in China. This organization may also ensure that the education level is less unequally distributed in China.
Secondly, I consider that the tuition fee should be regulated differently. I agree with Ramond that the tuition fee should not be reduced, because high tuition fee probably provides good education and high quality. In addition, the Chinese government can provide a subsidy, such as a loan, to the less fortunate students so that they get the opportunity to study. A loan ensures that students do not just go to college, but go to college because they really want it.
Thirdly, I agree with Johannes that the requirements of the Gaokao should be reduced. A student who can learn very well is not even very creative. There are many people who are very creative, but cannot learn well. The education system should not be obsessed by scores. The Chinese government should set up training programs in the area of creativity. This may increase the level of creativity and thereby also the level of innovation.
Fourthly, I do not agree with Maria that brain drain is a natural process. I think that the Chinese government is doing not enough on the future opportunities for students. The Chinese government should offer students the opportunity to study abroad, but should also ensure that it has good universities in China. More importantly, the Chinese government should offer something allowing Chinese students like to return to China.
I found an interesting article in which Amabile (PhD Psychology and head of Entrepreneurial Management Unit at Harvard Business School) explains that creativity arises through the confluence of three components; knowledge, creative thinking (approaches to problems, depends on personality and thinking style) and motivation. In my opinion these three components are not promoted enough in China to call it a knowledge economy. And I think it will take some time before it will have all three. First, knowledge. The education system delivers many graduates each year, but compared to the whole population it is still a small group who is educated. Next, creative thinking is not very much apparent in the Chinese culture, they have been used to do exactly what they are told. Lastly, motivation is also largely absent because of their culture. So i agree with my fellow students, that its because of the education system and the inherent culture that a knowledge economy is not yet to speak of.
After many of you have commented on school systems, I thought I’d follow up with these recent results from the 2013 PISA test – Shanghai again tops the list (though I would very much like to see the scores for a poorer province). What is interesting here is also the comparison between test scores and what students say about their schooling – apparently the high-scoring students this year are also among the unhappiest students.
http://www.bbc.co.uk/news/education-25187997
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