The educational level of its citizens says a lot about a country's economic development. It is a good indicator not only of the stage of economic development already reached but also of the potential for future growth. A nation's precious human capital is nurtured through education and promoted through the labor market. This is the national resource that more than any other will determine success in terms of GDP, investment environment and so on as nations compete in the global market economy.

Wei Yu is an academician with the Chinese Academy of Engineering and deputy director of the Committee for Education, Science, Culture, Health and Sports under the National Committee of the Chinese People's Political Consultative Conference. She addressed the issues of population and education in China, and the relationship between investment in education and economic growth. Here are the main points of her view:

There are five basic national policies. The concept of human capital relates to three of these in the areas of: improving the quality while controlling the quantity of the population, and so transforming what could otherwise be a huge burden of numbers into precious human capital; science and technology as the key to revitalizing the nation; and talents as a key to building a strong nation. That China's economy will be increasing at the current high rate for the next 20 years depends, to a large extent, on the implementation of these basic national policies.

Let's first take a quick look at the facts and figures concerning China's population. Provided current patterns of family planning are maintained, by the year 2043 population growth will have been brought to a halt and China will be a nation of 1.6 billion citizens.

Two demographic problems stand out, these are gender ratio and population aging. Statistics from the fifth national census conducted in 2000 show that the ratio of males to females has reached 117:100. Males outnumber females by 12.77 million in the age group of 0 to 9 years.

The number of people joining the ranks of the senior citizens is increasing at an unprecedented rate. People over the age of 65 will account for 11.8 percent of the total population by 2020 and will make up a quarter of the population by the middle of the century.

To make matter worse, population aging is more marked in rural rather than in urban areas. The general rule of thumb is that developed countries start to acquire an aging population when their per capita GDP reaches US$10,000. But now China, a developing country whose per capital GDP is less than US$1,000, has already joined this group of countries with aging societies to support. This brings great challenges in providing medical care and social security for the elderly.

Now, let's turn to education. The concept of human capital was first raised in the 1950s by an economist named Theodore W. Schultz. Human capital refers to working abilities acquired through investment in education, training, and health. These working abilities are an integral part of the individual. Education plays a key role in accumulating human capital and in economic growth. The concept of a knowledge-based society is replacing the earlier concept of a knowledge-based economy.

First and foremost, developing countries need to develop basic education as an essential prerequisite for building a stable society, and for advancing civilization, developing democracy, protecting the environment and so on.

The next challenge is to develop the vocational education and training necessary to produce a skilled labor force capable of building an industrial nation.

People who have benefited from higher education are needed in a knowledge-based society. This is especially the case for those who are resourceful, creative, and well-informed decision-makers. We are not short of information and knowledge in today's world with its information explosion and the break-neck pace of development in information technology. No, what we are short of are the wisdom and creativity that are so necessary to perceive new innovative uses of that knowledge and information.

In this sense, wisdom and creativity are more important than knowledge and information and the objective of higher education is to turn out thinking people who have managed to develop their wisdom and creativity.

Currently there are some 300 million students in China. The enrollment and retention rates in the primary school system are both around 90 percent while in the junior middle schools these rates are around 80 percent.

The enrollment rate in institutions of higher learning is around 17 percent for students in the age group 18 to 22. This represents almost 20 million students.

All these achievements help the investment environment, which in turn, contributes to the rapid increase in the inflow of foreign investment. Many articles have been written comparing the investment environment in China with that in India and concluding that the Chinese labor force is basically more productive.

The Chinese Ministry of Construction recently carried out a survey on the educational level of migrant workers. It showed that on average, those surveyed had eight years of formal education showing the great progress that has been made in basic education in China.

I should like to present three points of view relating to our approach to education:

First: education represents investment rather than consumption. It is a long-term investment made by the government, society, the family, and the individual. It is natural for each of these to play their part and to share the responsibility because education is not a commercial activity but something which is undertaken to promote the public good. To ignore this shared responsibility would be to hinder our educational development.

Second: simply looking to indices in the developed countries as indicators of educational development is not the answer. For example, enrollment rates in institutions of higher learning in the former Soviet Union and the eastern European countries reached 40 percent some twenty years ago. But could we say they did a good job in developing their economies?

Third: a fair system of education is one that can provide people of different abilities with what they need and enable everyone to realize their potential. This holds true for basic education. Education that can offer only the same approach to people with different abilities is the worst kind of education in terms of fairness. This is an important issue for public debate.

China should develop its education with an eye to the demands of the labor market. Employment is under great pressure as 200 million surplus rural workers put pressure on the jobs of their urban counterparts. Therefore, great efforts should be made in developing vocational education and training, and a system of "education for life" should be developed.

At present, people are enthusiastic about developing higher education and substantial resources are flowing into the institutions of higher learning. It is time to put the brakes on this and cool the overheating in investment in higher education.

If we were to use 100 as a base to represent the capital invested in educating a primary school student, then the figure would be 200 for a middle school student and as high as 1,600 for a college graduate. This ratio of 16 times more for a college graduate than a primary school student is the highest in the world.

Think about the people in the vast central and western regions of China, who are deprived of their right to basic education and vocational training due to poverty. Even if we were to substantially increase overall investment in education, they would still not be fully covered. Therefore, the priority should be on basic education and vocational training. Meanwhile in higher education, attention should be given to how investment in the sector can be used more effectively rather than how levels of investment can be further increased.

We may ask ourselves what is the biggest educational challenge facing China? I would say it is increasing investment in education. Despite ten years of effort we have yet to achieve the goal of increasing the ratio of investment in education to 4 percent of GDP. Private capital comes into the educational sector in a supplementary role to state capital. In China, private investment accounts for 44 percent of total investment in education. The average in Organization for Economic Cooperation and Development (OECD) countries is 12 percent. China should increase government investment in education.

Another challenge lies in the training of exceptionally talented people. As I mentioned previously, enrollment in higher education has reached 17 percent. The task now is to improve the quality of higher education so that it can produce outstanding talents.

(China.org.cn translated by Ni Xiaoqiang, June 29, 2004)