EXECUTIVE SUMMARY

The Macro Context

The economy of China is one of the fastest growing in the world, with an annual average Gross Domestic Product (GDP) growth rate of 9.8 percent in real terms between 1978 and 1994. According to the Ninth Five-Year Plan (1995–2000), the Government's target for GDP in 2000 is to quadruple that in 1980, and that for GDP in 2010 is to double that in 2000. This entails an average annual growth rate of 8 percent between 1995 and 2000, and over 7 percent between 2000 and 2010. Given the momentum of China's historical growth rate, it is realistic to expect the GDP to continue to grow at an annual average rate of 7–9 percent in real terms over the next 25 years. If the population growth rates are held down, its GDP per capita would be $600-$700 (as in 1996 constant terms) by 2000; $l,100-$l,600 by 2010; and $2,100-$3,500 by 2020, according to this study's projection. In other words, in five years' time, China would be on its way to becoming a lower-middle-income country, and in 25 years' time, it would be poised to join the league of upper-middle-income countries. To sustain these economic growth rates, the demand for well-educated personnel is likely to be high.

Chinese higher education institutions play two key roles in sustaining economic growth rates and in facilitating socially and environmentally responsible development in the country. First, they prepare citizens to fill high-level scientific, technical, professional and managerial positions in the public and private sectors. Second, in their capacities as repositories, generators, and communicators of knowledge, they underpin internal technological advancement, particularly in transforming research and development results for industrial productivity, and provide access to and adaptation of ideas from elsewhere in the world.

These tasks of educating the leadership and generating/utilizing knowledge for China's development effort present major challenges. Destroyed by the Cultural Revolution (1966–76), China's higher education system was rebuilt only in the late 1970s as one element of a strategy to modernize the country. The 1978–94 period witnessed remarkable proliferation of public regular higher education institutions from 598 to 1,080, and extension of enrollment from 0.86 million to 2.8 million full-time students in undergraduate and short-cycle courses, at an annual growth rate of 7.7 percent. Graduate enrollment rose from zero to 0.13 million. While this achievement was impressive, the proportion of the appropriate age cohort enrolled in regular higher education institutions was only 2.4 percent in 1994, barely above that in 1960. When enrollment in all adult tertiary institutions is considered, it amounts to just over 4 percent of gross enrollment in higher education. This ratio is low in comparison not only with other fastgrowing East Asian countries [for example, 10 percent in Indonesia, 19 percent in Thailand, 20 percent in Hong Kong, 39 percent in Taiwan (China), and 51 percent in Republic of Korea], but also with India, which had a per capita GNP of $300 in 1993, lower than China's $490, and yet had an enrollment rate of 8 percent in higher education.

According to the UNESCO Statistical Yearbook (1995), only about 2 percent of the Chinese population over the age of 25 have had postsecondary education, compared to 11 percent in Hong Kong, 14 percent in Republic of Korea, 21 percent in Japan, 14 percent in the

-xi-

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