The FT prints an article by the China Economic Quarterly team on the the economics of education in China. There has been rapid growth in the number of children attending school and the study attributes this to the jump in the average increase in annual income expected for each extra year of schooling. The rate was around 4% in the late 80s, but is now averaging closer to 10%. There are even higher gains for technical school education and college education. So China now has an army of smarter workers and it is growing: there are now 132 million students in senior high school, up from 51 million in 1995. The number of university graduates has doubled to 1.9 million a year, and is expected to double again by 2008.

The article explores the economic consequences of this smarter workforce. No doubt it is a major reason that China is experiencing such rapid economic growth and it will be a factor underpinning that growth for years to come. The article links this improved education with the labour shortages now hitting the Pearl River Delta and other regions (although The Economist (sub req'd) notes other factors such as higher rural incomes, lack of social security and health-care). Another extremely important factor is China's tradition of a national university examination system. This has been a part of China's education system for literally hundreds of years and has helped balance out social inequities by giving the best and brightest a chance regardless of income. Compared to many other developed and developing countries, this system allows for far greater social mobility and acts to reduce stratification of social classes.

What the article overlooks is the political implications of these changes. A more educated and richer workforce has more to protect and aspire to. This is the great challenge that faces the CCP: to remain in power they need to work on retaining legitimacy. In times past they may have been the party of the peasantry, but with the changes in Chinese society that is no longer relevant nor enough. It is a problem that Hu Jintao has recognised and is tackling and it is the biggest challenge facing the CCP since it claimed power. Because as China's population gets smarter they will also start asking questions abot the way they are governed and the CCP will need to have answers.