Saturday, 19 January 2013

China bets billions on human capital

It is pouring $305b a year into education in a bid to produce college grads
Published The Straits Times, 18 Jan 2013

SANYA (China) - Ms Zhang Xiaoping's mother dropped out of school after sixth grade. Her father, one of 10 children, never went to one.

But Ms Zhang, 20, is part of a new generation of Chinese taking advantage of a national effort to produce college graduates in numbers the world has never seen before.

A pony-tailed junior at a new university in southern China, Ms Zhang has a major in English. But her unofficial minor is American pop culture, which she absorbs by watching episodes of television shows such as The Vampire Diaries and America's Next Top Model on the Internet.

It is all part of her highly specific ambition: to work some day for a Chinese carmaker and provide the cultural insights and English fluency the company needs to supply the next generation of fuel-efficient taxis that New York City plans to choose in 2021. New York has been pushing for improved fuel efficiency in taxis.

"The status of China is growing all the time; we've got a really important role in international markets," she said in fluent English. "We need the capability to communicate with foreigners."

There are tens of millions in China like her - bright young people whose aspirations and sheer numbers could become potent economic competition for the West in decades to come.

China is making an annual US$250 billion (S$305 billion) investment in what economists call human capital. Just as the United States helped build a white-collar middle class in the late 1940s and early 1950s by using the GI Bill to help educate millions of World War II veterans, the Chinese government is using large subsidies to educate tens of millions of young people as they move from farms to cities.

The aim is to change the current system, in which a tiny, highly educated elite oversees vast armies of semi-trained factory workers and rural labourers. China wants to move up the development curve by fostering a much more broadly educated public, one that more closely resembles the multifaceted labour forces of the US and Europe.

Beijing Geely University, a private institution founded in 2000 by Mr Li Shufu, chairman of the carmaker Geely, already has 20,000 students studying a range of subjects, but with an emphasis on engineering and science, particularly auto engineering.

Mr Li also endowed and built Sanya University, a liberal arts institution with 20,000 students where Ms Zhang is a student, and opened a 5,000-student vocational community college in his hometown, Taizhou, in eastern China's Zhejiang province, to train skilled blue-collar workers.

China's growing supply of university graduates is a talent pool that global corporations are eager to tap.

"If they went to China for brawn, now they are going to China for brains," said Mr Denis Simon, one of the best-known management consultants specialising in Chinese business.

Multinationals including IBM, General Electric, Intel and General Motors have each hired thousands of graduates from Chinese universities.

"We're starting to see leaders coming out of China, and the talent to lead," said Mr Kevin Taylor, the president of Asia, Middle East and Africa operations at BT, formerly British Telecom.

Still, the overarching question for China's colleges is whether they can cultivate innovation on a wide scale - vying with the US' best and brightest in multimedia hardware and software applications, or outdesigning and outengineering Germans in making muscular cars and automated factory equipment.

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