China Economic Update – 12 May 2015
Increasing productivity is one of China’s most critical challenges over the next few decades and education is a key factor in raising the average level of productivity.
A better education system could be the engine of China’s future growth
Increasing productivity is one of China’s most critical challenges over the next few decades, as the negative effects of its demographic changes constrains the country’s capacity for growth. China’s workforce is already declining – with a greater number of older workers leaving the workforce each year than there are younger workers entering the market, a legacy of improving health standards and lower birth rates (in part connected to the One Child Policy) since the early 1970s.
As a result, individual Chinese workers will be required to generate greater economic value to continue the country’s growth and support a growing pool of retired people. Education is a key factor in raising the average level of productivity. New entrants to China’s workforce already have (on average) around four extra years of education than those entering retirement, however more will need to be done.