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1、 1China and the Knowledge Economy: Challenges and Opportunities Douglas Zhihua Zeng1 Shuilin Wang2 Abstract The rapid pace of economic growth in China has been unprecedented since the start of economic reforms in late 1970s. It has delivered higher incomes and made the largest single contribution to
2、 global poverty reduction. Measured by international poverty lines, from 1978-2004, the absolute poor population in rural areas has dropped from 250 million to 26.1 million. Such gains are very impressive and have been driven largely by a set of market-oriented institutional reforms, strong investme
3、nt, and effective adoption and application of various knowledge and technologies, especially foreign ones through trade and foreign direct investment (FDI). While enjoying tremendous success, China also faces many challenges that have to be addressed in order to sustain its long-term development. Th
4、ese include weak institutions, low overall educational attainment, weak indigenous innovation capacity, poor linkages between research and development (R change has been conducted as a process of adaptive learning. Through such an approach, China has successfully allowed regions and localities to ex
5、periment and then scale up the most successful experiences at the national level. The agricultural reform, the TVE initiative as well as the special economic zones later on were all tested as pilot(s) first and then scaled up when proved successful. With the same principle, the reforms were graduall
6、y expanded from the agricultural sector to industry and large parts of the service sector (see table 1 for a chronology of Chinas major reforms). This might be one of the major reasons which could explain the contrasting results of the Russian and Chinese reforms. 5Table 1. Chinas Major Policy Refor
7、ms Year Policy Change 1978 “Open door” policy initiated, allowing foreign trade and investment to begin 1979 Decision to turn collective farms over to households; TVEs given stronger encouragement 1980 Special economic zones created 1984 Self-proprietorships encouraged, of less than 8 people 1986 Pr
8、ovisional bankruptcy law passed for SOEs 1987 Contract responsibility system introduced in SOEs 1988 Beginning or retrenchment of TVEs 1990 Stock exchange started in Shenzhen 1993 Decision to establish a “socialist market economic system” 1994 Company law first introduced 1995 Strategy of vitalizing
9、 the country through science from 1982-2000, the average number of years of education for the population aged 15 and above increased from 5.33 to 7.85, and for the total labor force, it increased from 5.81 to 7.99 (for the secondary industry where manufacturing is the bulk, it increased from 8.05 to
10、 9.44).11 In addition, from 1990-2004, Chinas primary enrollment ratio (net) increased from 93.9% to 98.9%, junior secondary (gross) increased from 66.7% to 94.1%, and tertiary (gross) rose from 3.4% to 19%12. A.2.2. Rapidly emerging private higher education To address the huge demand for higher edu
11、cation, which the public system alone could not fulfill, the private provision for tertiary education has been growing very rapidly (table 3), especially in more remunerative disciplines such as business, commerce, and ICT. Since most of them are more market-driven, more flexible, and better suited
12、to business needs, they will have great potential to grow and become the driving force for better quality higher education. Although they still face many institutional constraints and only account for 10% of total enrollment, given Chinas huge household savings (estimated at RMB 60 trillion) and lon
13、g tradition of putting a high premium on good education, private education will play an increasingly important role. Table 3. Growth of Tertiary Education in China (1997-2002) 1997 1998 1999 2000 2001 2002 Growth of Private Tertiary Schools 0 13.3 94.1 30 97.7 54.1 Growth of Total Tertiary Schools -
14、1.2 0.2 4.8 -2.8 17.7 14 Growth of Private Tertiary Enrollments 33.2 38.5 80.8 70 105.4 126.2 Growth of Total Tertiary Enrollments 5.1 7.4 21.3 34.5 29.3 25.6 Source: Chen, Guoliang, Shanghai Academy of Educational Sciences. Presentation at the WB/KRIVET Workshop on “Revamping Lifelong Learning Syst
15、em”, Seoul, June 2003. 10 World Bank SIMA database. 11 Chinese Census 1982, 2000. 12 China Education Statistic Yearbook 2000, 2004. 9A.3. Innovation System A.3.1. Rapid increase of R and patents granted totaled 49,360 in 2004 (Figure 1 and Table 8). Chinas international patents applications also inc
16、reased very rapidly. According to WIPO recent report Annual PCT Statistical indicators report (annual statistics 1978 -2004), China fared very well. In 2004 it filed 1,705 invention applications, an increase of 32% compared with the previous year and ranked 14th in international application percentage (1.4%). Among developing countries 14 The Central State Assets Supervision and Administration Commission (SASAC), “Firms Input in R http:/ A.3.
