رشد سرمایه گذاری در سرمایه انسانی در چین در مقایسه با کاهش سرمایه گذاری در ایالات متحده

Thank you very much, Dominick. It is a pleasure to appear on this distinguished panel. I am going to speak about human capital investment in China and its relation to China's participation in the world economy. The Cultural Revolution basically destroyed education in China, particularly higher education. Data for the early period the sixties and the seventies shows that very few people were in school in China, particularly in secondary school or university. As China began to participate in the world economy all this began to change. The Chinese government began to spend what had been a very small fraction of its income on education to a still low, but a much higher fraction. More importantly, families and their children began to appreciate that as China participated in the world economy with exports, imports, and foreign direct investment, investments in secondary school and in tertiary education paid off. People spend their own money usually only when it pays off, and they began to see that it did pay off significantly. So you begin to get a boom in both secondary and tertiary education. This had two major implications, among others. One, you set up a kind of dynamic comparative advantage for China; that is, the increase in the education of the population enabled the nation to move ahead over time toward more complicated products, services and activities – a very important point as we try to look at trajectory of China's growth in the future. Secondly, it created substantial income inequality in China, an inequality that is receiving a lot of attention in China and which I will talk a little bit about.

Thank you very much, Dominick. It is a pleasure to appear on this distinguished panel. I am going to speak about human capital investment in China and its relation to China's participation in the world economy. The Cultural Revolution basically destroyed education in China, particularly higher education. Data for the early period the sixties and the seventies shows that very few people were in school in China, particularly in secondary school or university. As China began to participate in the world economy all this began to change. The Chinese government began to spend what had been a very small fraction of its income on education to a still low, but a much higher fraction. More importantly, families and their children began to appreciate that as China participated in the world economy with exports, imports, and foreign direct investment, investments in secondary school and in tertiary education paid off. People spend their own money usually only when it pays off, and they began to see that it did pay off significantly. So you begin to get a boom in both secondary and tertiary education. This had two major implications, among others. One, you set up a kind of dynamic comparative advantage for China; that is, the increase in the education of the population enabled the nation to move ahead over time toward more complicated products, services and activities – a very important point as we try to look at trajectory of China's growth in the future. Secondly, it created substantial income inequality in China, an inequality that is receiving a lot of attention in China and which I will talk a little bit about.

I greatly enjoyed the comments of the other participants. I want to raise a general question that came up several times. There is no doubt that China's growth in the last 30 years has been the great event in the world, nobody can question that. The question is what will China's growth look like in the future? Larry mentioned it is easy to extrapolate and get enormous results. I have lived long enough to see that there are two types of extrapolations that turned out to be complete failures. One, the Soviet Union. There was strong opinion within the United States and elsewhere as you go back to the early 1960s and so on that the Soviet Union would overtake the US economically within a decade or two. Now that was a strong opinion within the United States. Well it turned out to be completely wrong, the Soviet Union failed as an economic model. The second episode was Japan. In the 1980s the belief was that Japan would soon become the number one country in the world and would over take the United States and all other countries and would be the prime economic country, and it was doing great. Well we all know what has happened to Japan since 1990, 20 years of stagnation more or less. Soviet Union was even worse than stagnation. So if we look at China, there have been great achievements, enormous achievements, but there are also major obstacles. And the question I am raising, and I do not have the answer to this question, is will China be able to overcome these obstacles. Now just to give you a few examples of the obstacles, many of which have been raised by other speakers. China has had a terrible land policy, you cannot sell land in the rural areas and the rural part of the population is not a trivial part of the population. China has a very bad mobility policy, so if you move from the rural areas to the urban areas you lose out on a lot of benefits. I mentioned in my comments that the education level of these people has been much lower than others. China has restrictive labor markets, restrictive capital markets, has a premature aging population because of the one birth child policy started in 1981. China's fertility would have gone down, it would have gone down a lot, but it is gone down further and faster than it would have done. So its population is aging prematurely, which is not a great boon for economic progress. China's capital markets are messed up. China's domestic market in terms of consumption has been underdeveloped. That is why China, even though it is a large country, and large countries usually cater to the domestic market, caters mainly to the international market. And I can go on and on, and I do not know the answer to this question. Will China be able to overcome all of these obstacles, given its political framework and whether that changes or not I do not know, and continue with not 10% growth but 5 or 6 or 4% growth, which would be great growth if it can continue to do that for long periods of time? So I think we have to be cautious about saying that because China's grown so rapidly for the past 30 years China will soon be the number one country maybe in aggregate income, but far from per capita income in which it will be way behind. So I would like the other panelists to comment on whether the likely hood that China will be able to overcome these problems. Yes, there problems and they are discussing them but they are not easy problems to overcome. Every single problem in China that I have mentioned has some major interest groups who are supporting current policy. Will they be able to overcome this interest group opposition?