Posted by: kalmeida317 | November 5, 2011

China: Leveraging Human Capital

Over the years, China has been looked upon by the World as a mass producing, currency devaluing and communism accepting foreign entity that might become a global power in the distant future. However, if the global meltdown has thought us anything in the last two years, it is the fact that there has been a shift in the geopolitical spectrum. While the world waits for the pitfalls of a Socialist market economy to catch up with China, the Chinese are making transitions and steadily building an economic pedestal that could easily propel them to the ranks of world leaders.

China today out produces the U.S in steel, cement, electronics, clothing, chemical fertilizers etc. It owns approximately 40% of U.S debt and according to Nobel Prize Winner Robert Forgel (University of Chicago) the Chinese economy will be worth $123trillion by 2040, substantially larger than the U.S.

Now while all of these stats and figures are not precise representations of the future, China is a nation that is tangibly climbing the international ladder and that is a fact worthy of recognition. With all of the factories, infrastructure and industrial muscle that exists in China, what many analysts overlook is the value they are creating around Human capital, arguably their most precious resource.

Over the last decade the Chinese government has tripled its expenditure on education and is projected to produce more engineers than India and the U.S. While most U.S educational institutes are reeling with budget cuts and students financially struggling to keep up with academic inflation, the Chinese are making moves and adding to their intellectual capacity.

China has already established their desire to move out of low wage industries and concentrate on innovation based endeavors. Chinese companies already control almost half of the $45 billion wind turbine global market. According to a Reuters article (Benjamin Kang Lim and Simon Rabinovitch, Dec 2010) the Chinese government has approved a plan to invest $1.5 trillion in a strategic industries boost that seeks to quadriple output in 7 key industries over the next five years. The targeted sectors include alternative energy, biotechnology, new-generation information technology, high-end equipment manufacturing, advanced materials, alternative-fuel cars, energy-saving and environmentally friendly technologies.

So while the U.S and the rest of the world sits back and pontificates on how Chinese growth numbers are skewed and their sustainability is unlikely, China is entering the next phase of their progression cycle with unprecedented vigor and minimal concern about the cynics that doubt them.

-Karan Almeida



  1. Hey this post is very interesting. I’ll use it for my essay :). Can you reply me some related articles that I can read too? – Bosal exhaust

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