China’s Transition to a Knowledge Economy

Abstract

The Chinese economic reforms which started in 1978 were not just one set of reforms, but a cumulative and overlapping set of reforms over a 30-year period which effectively embedded knowledge creation in the Coastal regions of China. This resulted from the interaction of four processes, facilitated by Foreign Direct Investment and the increasing prosperity of China’s Coastal regions. The first process was the opening up of the Coastal regions to foreign investment through the establishment of Special Economic Zones. The second process was accumulation of knowledge through the establishment of Science & Technology Parks and Technology Development Zone’s. The third process was the incentivisation of research. The final process was the reform of China’s educational system. While the first two processes facilitated knowledge transfer and knowledge creation, the latter two processes underpinned knowledge creation activities in China. However, while the ‘knowledge’-oriented reforms facilitated the transfer of knowledge and the incentivisation of research, they did little to change the style of learning and teaching in China. This remains deeply rooted in the Confucian tradition which prevents the development of abstract thinking and thus inhibits creative thinking. Nevertheless, Chinese students who study abroad do so under educational systems which are more conducive to the development of creative thinking.