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This is why the responses have been positive toward the announcement from China that it would put up a 4-trillion yuan (US$586 billion) economic stimulus package. The money will be used domestically to fund extensive infrastructure projects, aid poor farmers and subsidize exports, thereby helping keep jobs and prop up domestic consumer spending. Notably, among the areas where the Chinese government plans to spend the money are science and education.
This is exactly what China did during the Asian financial crisis in the late 1990s. Back then, the country’s economic growth had stagnated and even declined. Accordingly, China needed new stimulation, and higher education was deemed the most appropriate vehicle. It would not only increase domestic consumption through tuition and related spending among the students and their families, but also lead to an upgrade in the infrastructure at universities, thus helping to fuel a significant construction boom, which in turn would generate new employment as well as new consumption by employees.
The higher education expansion since 1999 has yielded unintended consequences. Quantitative expansion has been at the expense of quality, university-town projects have turned out to be lucrative real-estate development initiatives, and graduates have had difficulty finding jobs related to their studies and with satisfying compensation. Nevertheless, the spending on higher education will eventually pay off, especially given that in a decade or so China will be entering an aging society, at which time it will have fewer college-bound youth.
Of course, the current economic stimulus package should avoid the same kind of mistake. But there is no doubt that money spent on education and science will have a more long-term, positive impact on China’s social and economic development than that spent on infrastructure improvement. In particular, China should use the money wisely in research related to the environment and climate change and in attracting first-rate scientists from abroad.
China’s economic growth in the last 30 years has been a story of both miracles and disasters. At the same time it was creating wealth and lifting its citizens out of poverty, China’s growth was having devastating effects on the environment, which is unsustainable. While China has to follow a different path – characterized by greater efficiency and productivity gains and based on new knowledge – focusing on environment-friendly technology should be the way to go.
For example, various infrastructure projects should encourage the use of renewable energy and energy-efficient technologies. China also should develop new technology for its automobile industry, which has been and will continue to be one of the country’s pillar industries. Otherwise, the increasing demand for passenger cars could only worsen China’s energy shortage and cause more environmental catastrophes in the years to come.
In the meantime, there is a new sense of urgency among the leaders that China lacks first-rate scientists who are able to lead the nation’s innovation push. Instead of acquiring facilities, which are already advanced and sophisticated by international standards, China should be willing to spend money, big money, bringing back a select group of Chinese scholars who are active at the frontiers of international research.
By giving them an environment conducive to creative work and time to innovate, China could not only enjoy the benefits from products “made in China” but also witness the next breakthrough, products “created in China.” In this way, the economic stimulus package could leave a more positive and lasting legacy.
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(Cong Cao is a senior research associate with the Neil D. Levin Graduate Institute of International Relations and Commerce at the State University of New York. He received his PhD in sociology from Columbia University in 1997 and has worked at the University of Oregon and the National University of Singapore. Dr. Cao is interested in the social studies of science and technology with a focus on China. ©Copyright Cong Cao.)
