In my last column I discussed about the immense potentiality of china towards creation of wealthy citizens. I have tried to depict the true picture of the Chinese government, which helps to increase and develop the citizens of china. It clearly points out those Chinese economic policies are helping to reduce the gap of rich and poor. The proof of the pudding is that China ranks No 2 on Forbes billionaires list. Moreover 27 of them have made into the list for the first time and that also at a point of time when the world economy is fighting enormously with the recession nights.
I ended the report with a prelude to this topic where I will again try my level best to bring forth the policy behind making Chinese citizen and economy so surprising to the world economy. But before that we all need to have a quick look towards the covered up journey of China.
If we look into the historic position of Chinese economy it will very hard for any one to believe about the turn around been formalized in to shape of today’s Chinese economy.
• China’s industries developed and grew from 1927 to 1931. Though badly hit by the Great Depression from 1931 to 1935 and Japan’s occupation of Manchuria in 1931, industrial output recovered by 1936.
• By 1936, industrial output had recovered and surpassed its previous peak in 1931 prior to the Great Depression’s effects on China.
• This is best shown by the trends in Chinese GDP. In 1932, China’s GDP peaked at 28.8 billion, before falling to 21.3 billion by 1934 and recovering to 23.7 billion by 1935.
• In 1978, China was to witness one of the most rapid periods of change in her 5,000 year history.
• 30 years later, China had developed from an economically desolate and ideological-driven country into an industrial powerhouse, rapidly overtaking developed western nations in recession.
• In the 1990s, many state enterprises were privatized and private individuals were allowed to create companies. In 1990, the Shanghai Stock Exchange was reopened after Mao first closed it 41 years earlier.
• It also established a series of “special economic zones” in which foreigners could invest in China taking advantage of lower labor costs.
This investment helped the Chinese economy boom. In addition, the Chinese government established a series of joint ventures with foreign capital to establish companies in industries hitherto unknown in China.
• By 2001, China became a member of the World Trade Organization, which has boosted its overall trade in exports/imports—estimated at $851 billion in 2003—by an additional $170 billion a year.
• In 2006, an estimated $699.5 billion of foreign investment was present in China. A great deal of this investment came from Chinese-speaking regions such as Hong Kong and Taiwan, who was the first to invest in China. Japanese and Western investment followed.
So now it’s well clear to my readers about the encapsulated journey of today’s Chinese economy from the era of 1930.But all these were in the initial days were only plans or policies. How did they materialize is the point to be analyzed.
They have been materialized due to one single factor that is the education. Education not only in schools and college levels, but also to create the huge untapped potentiality of skilled and semi skilled education and educated mass of population. We all know that china posses one of the largest population. The world at times used to critics this huge mounting population of china. But china and its government’s decades after decade have converted their biggest weak point in to their biggest strength. Today china enjoys the huge potentiality of its consumers and consumption.
It have created the largest pool of skilled and semi skilled workers and employees .What we say in corporate term Blue Collard Jobs. China has used its cheap commodity resources to create world best products and cheap products. Educations particularly in science field have helped china to become the supreme power of technology. China have created the world finest products through its massive and continuous never ending technological innovations. It have created scientist and researchers equivalent to the western world. All these have been created on the wheel of proper and improvised education system provided by Chinese governments.
We have discussed many times a about the Chinese economic growth models and the huge reserves and its stock gold piles. But among all these the real growth model is the development of education system in china. Its real wealthy citizens are the ones who gets education and take the future responsibility of Chinese economy. China is making a shift of its wealth. Its busy in shaping up the fortune of the citizens of china. If china have become the No.2 in Forbes billionaires list it ca be clearly declared without any second thought that China deserves to be crowned with No.2
Very recently china is going to bring a change in the education system.
• China plans to revamp its university admissions system, allowing students to take subject-specific tests.
• Currently access to university is entirely dependent on the score students gets on a two-day test on a wide range of subjects.
• A little more than 10.2 million students take the exam each year, and only about 25% of them get in. The vast majority of those who don’t make the cut go straight into the work force. China is trying to bring change into its education system so that the vast majority can reap the benefits of education. Moreover this will also increase the talent pool of Chinese new generation. More White Collard Jobs will be created resulting free dependence of the economy.
The schools and colleges have been asked to develop and promote create thinking minds within the students. This will enable the future growth of china. Just imagine when many countries in the west are busy to resolve the post war situation and busy in exercising images of super power, China is creating and shaping its future. China is thinking way ahead of another 30years from now. Where as many countries in the west who are busy to come out of the bad sins committed through speculative economic and business growth modules adopted by them.
China is thinking to develop the nation where ideas will be sold and other economies will buy them paying hefty amount Products will be replaced by ideas. A time might come when the Chinese economy will increase the taxation for selling only innovative ideas. It might sound funny but juts imagine the growth model and the future strategy adopted and being implemented by china towards developing its economy.
It can be said that China is SHIFTING CONCENTRATION OF WEALTH. Western economies will become 2nd rank economies and China will come under developed economies rank.
Today after so many years US and other economies have identified that the real growth of any economy lies in the hands of education system. It can created speculative gains and growth for shorter time frame but if its looks within the thin line of economic growth the results are beyond speculation. Today the US government is buying in shaping up the education system. It asks its citizens to create scientist doctors and researchers. Since it feels very well that the in the coming decade other economies will take over the super power crown.
Today US have realized the mistakes it have committed and now bringing radical changes in the education system to shape up the future. Very recently US is emphasizing to improve students and teachers instead of punishing under performing schools. US have 33% under performing schools. Unfortunately the list is increasing each day without rewinding back. US is also going spend four-billion dollar more on education system.
At the end I would like to conclude the series with this note that all these analysis of the education system was not to criticize but to bring forth the true portrait being painted by the world and China alone in the coming decades. We must understand the growth of any economy never lies in numbers. It lies among all of us who are juts like you reading this article .It is we who will bring the economic growth GDP to 20% in the next 3 decades from now. Its not the business profit figures or the fiscal balance which will bring this growth. Education is the foundation of economic growth of any nation on this planet.
Indranil Sen Gupta
Financial, Economic Writer and Research Analyst