Special Report: Global Financial Crisis
BEIJING, April 9 -- The global economic crisis has
made it all the more important to take a fresh look at China's human resources.
The country's immediate challenge is to tackle unemployment, while in the long
run it has to develop human resources to support a shift in its growth strategy.
The crisis has had a severe impact on China's real economy. The country's
exports have plummeted, causing a drop in production and loss of employment for
about 20 million workers, mainly migrant workers with low skills. Besides, about
10 million people migrating from rural areas to cities each year will no longer
find it easy to land a job. Nor will many among the 6 million youths who
graduate from colleges each year find jobs waiting for them.
The sheer number of the jobless is a daunting challenge in itself. True,
the government's financial stimulus package will create new jobs, especially in
infrastructure construction. The government is taking steps to encourage rural
employment, create jobs for laid-off migrant workers and fresh college
graduates, and stimulate small- and medium-sized enterprises. But given the huge
number of jobs lost, short-term training and job creation have to be expedited
and social safety nets for the unemployed improved.
The real challenge, however, lies in developing human resources to help the
shift from export-led to consumption-driven economic growth. Rebalancing the
growth strategy entails a shift in emphasis from traditional export industries
to the service sector, including retail, financial services and domestic
tourism.
More importantly, it needs a shift towards a knowledge-driven economy that
requires higher levels of science, technology, added value and innovation. And
that calls for a review of the country's human resource policies.
Three factors deserve attention in this regard. First, public expenditure
on basic education has to be increased significantly. The government has
increased spending on education markedly in recent years, but at 3.3 percent of
GDP it is still low by international standards. Increased expenditure on
education will strengthen the country's human resources base, provide an
essential foundation for other levels of education and serve the need for a
service- and knowledge-driven economy. It will help take the pressure off
families to save, too, and thus free resources for consumption, which in turn
will stimulate domestic demand and economic activity.
Second, the shift in growth strategy has to be supported by large-scale
investments in vocational education and skill development. The country's growth
has been based largely on low-cost labor, and most of the laid-off workers are
masters of basic skills only. The global economic crisis has highlighted the
need to upgrade and diversify the country's mix of labor skills and reallocate
the workforce.
Hence, extensive short- and long-term training programs are needed to
prepare workers for new types of jobs, and these programs have to be supported
by employment services and labor-market policies to enhance their responsiveness
and flexibility. And given that enterprises are the direct beneficiaries of such
a change, there is considerable scope for creative public-private partnership.
Third, this is an opportune moment to upgrade technology levels and
strengthen the economy's capacity to innovate. A recent Asian Development Bank
study (ADB 2008, Education and Skills, Strategies for Accelerated Development in
Asia and the Pacific) stresses the key role of higher education in middle-income
countries.
Even before the global economic crisis set in, it had become clear that the
days of growth based on low levels of knowledge and innovation were numbered.
The crisis has only further highlighted the need to change that pattern.
An Organization for Economic Cooperation and Development report on higher
education in China highlights the importance of expanding the pool of science
and technology graduates, strengthening the role of independent research
institutes and improving knowledge exchange between research institutes and
enterprises. Closer links with the private sector and a stronger focus on
providing practical knowledge, too, would improve the employment prospects of
new graduates.
The global crisis poses big challenges. But it offers opportunities, too.
The government has risen to the challenges with a sizeable stimulus package and
announcement of policies. It has declared its readiness to shift to a more
sustainable growth model. So it has to seize the chance now to implement the
policies to support consumption-driven growth.
That's why quick and effective measures are needed to improve basic
education, raise skill levels, create a flexible and responsive workforce,
strengthen the functioning of the labor market, upgrade scientific and
technological research and know-how, and encourage innovation. These measures
will ensure that China has the competitive human resources to meet future needs.
The author is Asian Development Bank's country director for China.
(Source: China Daily)
