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China's Great Academic Leap Forward

Peter R. Orszag is a Bloomberg View columnist. He is a vice chairman of investment banking at Lazard. He was President Barack Obama’s director of the Office of Management and Budget from 2009 to 2010 and the director of the Congressional Budget Office from 2007 to 2008.
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China is either at or near the so-called Lewis turning point, where it is no longer hugely productive to shift workers from agriculture to manufacturing. Now, growth will need to come increasingly from so-called total factor productivity, which itself is driven by technology and innovation, as Cai Fang, vice president of the Chinese Academy of Social Sciences, argues

China has been busy preparing for the change. During the past two decades, Chinese involvement in international science and engineering has drastically increased, new research from economists Richard Freeman and Wei Huang of Harvard University shows. In 1970, after the Cultural Revolution, the country had fewer than 50,000 undergraduate students and almost no graduate students, but this changed quickly in the 1990s and 2000s. 

From 1970 to 2010, the number of students enrolled in higher education globally rose by 500 percent, to 178 million from 29 million. Nowhere was this growth faster than in China. While in the U.S. the number increased 140 percent, in China, it rose almost 30,000 percent, and the country more than doubled its number of colleges. Of global total enrollment, China’s share expanded from nothing to 17 percent. For comparison, India’s share rose from 9 percent to 12 percent during the same period. 

It’s true that the quality of that education is still not top-notch. No Chinese universities are ranked within the top 100 institutions globally, according to the Shanghai Academic Ranking of World Universities. The government is investing heavily in improving quality, however, and there are now six Chinese universities in the top 200, up from none in 2003. 

Furthermore, the Chinese have invested in research links globally, and especially with the U.S. In 1993, China endorsed education abroad; more than a decade later, it began to subsidize large numbers of outbound students. As recently as 2005, roughly 60,000 mainland Chinese came to the U.S. for higher ed; by 2012, there were almost 240,000. Mainland Chinese represent more than a quarter of international students in the U.S. 

These relationships also extend to research. China has become the top international collaborator for U.S. researchers. And by 2012, almost half of Chinese collaborations abroad were with Americans, Freeman and Huang have found. 

They conclude that China’s new links to global research, and in particular its key relationship with the U.S., have “allowed China to reach the scientific and technological frontier much faster than if it had done a more parochial path.” And that in turn is crucial to continued strong growth in China. (I’ll be spending the next few days there, as the Lewis turning point comes and goes.) Despite the rising tension between the U.S. and China over the South China Sea islands, academic research provides one dimension along which the two countries remain deeply co-dependent.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Peter R. Orszag at porszag3@bloomberg.net

To contact the editor on this story:
Mary Duenwald at mduenwald@bloomberg.net