Gustavo Ballvé on December 13th, 2010
Education, Food for thought, Home, Industries, Investment Themes, Portfolio Management

China now graduates over 6 million people per year, many of whom leave their less-developed cities for the big centers and get nothing in return – forming a mass of disenchanted, poor, jobless or sub-employed supposedly educated people. That’s never been a recipe for stability… The causes for this phenomenon can be many, and ultimately it can be just a matter of time to adjust supply of specific courses and demand. That said, it’s inevitable to think about the differences between, say, Brazil, China and the US. There’s a 2-min video inside that serves as a summary for the article as well, as well as links to the debate in the NY Times. Finally, the article shows how much “magic” China still has to do in order to support its own growth. As much as they must try to control inflation, they remain “aligned” with growth, growth, growth. Tough balancing act!

In terms of the differences between Brazil, China and the US: In China, the difference can be how they plan and act (as a centralized economy) to stimulate jobs in those less-developed areas or stimulate the services sector to absorb these graduates. In the US, here’s a supposedly-unrelated article about how graduates in the US are increasingly trying to “create their own jobs” instead of just waiting for the job market to recover. Failure rates notwithstanding, it highlights something the US is still ages ahead of most every country: entrepreneurship, here defined as the freedom to start whatever, cheap capital, and very little bureaucracy.

And Brazil? It’s interesting to notice a culture of entrepreneurship growing noticeably (it used to be constrained to the Internet start-up field) but disheartening to see so little planning on Education.

Here’s the 2:21 video and below that the links to the other pieces of the debate in the NY Times:

The debate in the NY Times is interesting because they’ve tapped several chinese Education experts who work or do research abroad.

Reform the private sector – Yasheng Huang argues that China lacks a decent Services sector that could absorb more graduates and benefit the overall economy;

Few promising opportunities – Gordon G. Chang basically retells the article’s story from another point of view. He’s the author of a book which has an attention-grabbing title: “The Coming Collapse of China”.

High test scores, low ability – Yong Zhao points to a different flaw in the education system in China, the test-based culture.

A stratified education system – Qiang Zha points to another flaw: a few elite universities where it’s extremely hard to get into, plus secondary institutions that are absorbing – with the potential problems – the rest of the immense mass of college students. We Brazilians know this problem very well.

What the graduates go through – A selection of comments by the general readership, none too helpful in isolation but the collected comments paint an interesting picture.

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