Harvard on the Yangste

China is a centre for low-cost education

A doctor friend of mine tells me that the number of Indian medical students in China is growing rapidly. It is far cheaper to study medicine and surgery in places such as the Tianjin Medical University than it is to pay the high fees and capitation charges in a private medical college in India. According to a recent report by the Indo-Asian News Service, “The average tuition fee in a Chinese medical university is $2,000-3,000. Another $1,000 is needed for board and lodging. This is a fourth of what one would spend in India.”

There are already an estimated 6,000 young Indians attending college and university in China. China is a centre for low-cost education. It wants to break out and become a hub for quality education, battling the likes of Harvard and Oxford for the brightest and the best. That’s a transition — from cost to quality — which is also being attempted in many other parts of its economy.

So, a few days after the Indian government announced its decision to set up six new Indian Institutes of Management (IIMs) and four new Indian Institutes of Technology (IITs), it would be worth looking at what China is up to in its own battle to increase skill levels in the economy. And see how India compares.

The Chinese government has often said that it wants five of its universities to make it into the global top 20 list by 2020. It is investing heavily to create these world-class universities. Much of the spending is on elite universities. Peking and Tsinghua universities each received 1.8 billion renminbi — or more than Rs1,000 crore at current exchange rates — way back in 1998. The top 11 universities got more than 17.43 billion renminbi (close to Rs10,000 crore) from the government in 2004. And the money keeps flowing.

Meanwhile, the number of graduates in China has quadrupled between 1998 and 2005 as more young men and women get opportunities to attend university. A survey conducted by the Chinese Academy of Social Sciences shows that spending on education is now the biggest item in household budgets, more than even regular household expenditure. Rural households spent about one-third of their net per capita incomes on education in 2003, double the proportion in 1996.

These are some of the factoids from a new paper, The Higher Educational Transformation of China and Its Global Implications, by Yao Li, John Whalley, Shunming Zang and Xiliang Zao.

But it’s not just a question of spending money — a fact that our policymakers should perhaps learn. China is trying to do a lot more. While focusing on the elite universities, China has been busy consolidating its smaller universities into larger entities. Professors do not have tenured jobs for life. They have to perform. “It is not uncommon for an annual target of three international publications to be set for faculty member,” say the four economists in their paper. Those who do not meet this target are sacked. The results are evident, in terms of more patents and research publications.

China’s push towards building a world-class system of higher education is part of a larger plan. Economies grow out of poverty by employing more capital and labour. Later, productivity and innovation become more important. At some point, economies have to make an inevitable transition — from selling cheap labour-intensive stuff such as clothes and toys to creating new products that are rich in technology and knowledge.

The move from one stage to the other can often be painful, as many Asian companies and economies realized after the mid-1990s. The way the Samsung Group almost went bust and then reinvented itself in the past 10 years is one micro example. China is also retooling, but on a grander scale. That’s the jigsaw into which the higher education piece fits.

There will be obstacles, of course. Authoritarian and regimented societies are rarely innovative. A country that censors the Internet cannot easily become a knowledge society. Then, a sharp focus on elite universities could lead to a growing skills gap and add to China’s already unsettling levels of inequality.

How does India compare? Not too well, either in terms of the money being spent or the attempts at internal university reform. But India has been something of an Asian pioneer in setting up quality centres of research and higher education, much before the economy actually needed good engineers and technocrats. This was during the Jawaharlal Nehru era. The space programme, the atomic research programme and the stunning success in software services came much later.

So, it is not just a matter of emulating China. It is also about reinstating one of the more successful parts of the Nehruvian programme. Setting up a few more IITs and IIMs can be a first step—but far more needs to be done. That is something China seems to have understood.