Editorial | China’s resolve to invest in people is economic good sense
The government’s plan to invest in people as well as physical assets is aimed at improving domestic demand while aiding low-income households
One thing China has in abundance is people. An economic strategy to invest more in them, including in education, therefore has important implications. The ultimate goal is to stimulate their spending and generate more domestic economic activity to reduce reliance on exports.
Government plays a central role in China’s economic investment. That has amounted mainly to investment in hardware or infrastructure such as bridges, railways and airports. The idea is that more should go into education, public healthcare, social welfare and measures to lift low-income households.
The reasons include lack of consumer confidence in spending. Among the middle class, for example, wealth is tied to an ailing property market, and priorities still include saving for children’s education or elderly care.
A book introducing the five-year plan proposals, produced by a Communist Party-run publishing house, says: “The return from investing in physical assets is declining while we have long underinvested in livelihoods and comprehensive human development. In the transformation of growth towards a demand- and innovation-driven pattern, it is imperative to increase investment in people.”