China’s earlier growth was propelled by low-cost, lowskilled labor, but that advantage has shifted because it now has a large and growing workforce capable of propelling the innovation-led economic development path that the government is promoting.
China leads in STEM Education
The Chinese government has ramped up spending in education with a total of RMB 3.01 trillion invested in 20171, compared with RMB 478 billion in 2006, in line with its plans to drastically improve the skills and education levels of the population, with recent emphasis being squarely placed on technical subjects.
This has created a huge population of students graduating in the Science, Technology, Engineering, and Mathematics (STEM) subjects, with 4.7 million Chinese students graduating in the field in 20162, far in excess of India (2.6 million), the USA (568,000) and Japan (195,000), according to data compiled by the World Economic Forum.
And this talent pool is being augmented by a flow of returning students from overseas, with 432,500 (80% of the 544,500 going abroad in 2016) coming back to China in 2016, up from 272,900 in 20123.