Peter R. Orszag
China is either at or near the so-called Lewis turning point, where it is no longer hugely productive to shift workers from agriculture to manufacturing. Now, growth will need to come increasingly from so-called total factor productivity, which itself is driven by technology and innovation, as Cai Fang, vice president of the Chinese Academy of Social Sciences, argues.
China has been busy preparing for the change. During the past two decades, Chinese involvement in international science and engineering has drastically increased, new research from economists Richard Freeman and Wei Huang of Harvard University shows. In 1970, after the Cultural Revolution, the country had fewer than 50,000 undergraduate students and almost no graduate students, but this changed quickly in the 1990s and 2000s.