China’s Talents Rise Through The Ranks

China Analyst Jingyi Li discusses the impact of China’s higher education revolution on the global economy.






Key Takeaways

 

  • The number of Chinese students graduating from university each year has more than septupled from 1 million in 1997 to 7.4 million in 2015. This has coincided with a surge in the number of Chinese students studying at foreign universities. Consequently, the attainment of a college degree is quickly shifting from exception to norm.
  • This expanding talent pool, combined with a recent boom in R&D and capital expenditure, is changing the global competitive landscape in two ways; first, it is allowing Chinese firms to surmount barriers to entry into high value-added industries; second, it provides Chinese firms already competing globally with added resources to pursue innovation. Both can either threaten profits of existing players or force them to up their game, ultimately benefiting global consumers.
  • This education boom is also creating new domestic investment opportunities, catalyzing consumer demand for discretionary products by way of rising salaries, as well as corporate demand for high-end research and manufacturing equipment by way of expanding productive capacity.
  • As innovation is spurred throughout the global economy, the far-reaching implications of this transformation have been underappreciated by many due to persisting outdated notions of the Chinese economy.

Disclosures

 

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