The World's New Perspective of China

     Keeping its currency undervalued, China could help its manufacturers sell their products at a very affordable price in foreign markets like the U.S. and Europe. But there were other factors like low wages, increased infrastructure, businesses' hospitality, and hard-working labor force that helped China to become the key manufacturing base of the world.

     These past decades, China has been working on building up its physical infrastructure such as factories, roads, highways, airports, etc. Today, China's next strategy is to invest in human capital. It started to invest in education, nearly tripling the share of GDP allocated for it. Beijing is a clear example of that. China has experienced a massive expansion of education. They doubled the number of colleges and the number of students attending from 1 million in 1997 to 5.5 million in 2007. they have identified nine of their top universities as Ivy Leagues. Richard Levin, the president of Yale University, said, “This expansion in capacity is without precedent. China has built the largest higher-education sector in the world in merely a decade's time. In fact, the increase in China's postsecondary enrollment since the turn of the millennium exceeds the total postsecondary enrollment in the United States” (Time Magazine, Oct. 2010). This is China's strategy to reach its goal to enter into higher-quality goods and services and often better competition to the markets.

     India is one of the strongest countries in the service sector, but now that China has invested in education, and its students have learned English better and trained in technology, China's firms can enter in this market as well.

     It seems like China will be a real challenge for the U.S. and Europe in the next decade. Now the question is how is the rest of the world going to react to this reality? Are they going to concentrate in making structural reforms and new and better investments in order to make their economy more dynamic and its workers more competitive? The New Challenge from China (Time Magazine)