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Will China lead the world into the era of the digital economy?

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Manish Saini
Manish works as a Journalist and writer at Revyuh.com. He has studied Political Science and graduated from Delhi University. He is a Political engineer, fascinated by politics, and traditional businesses. He is also attached to many NGO's in the country and helping poor children to get the basic education. Email: Manish (at) revyuh (dot) com

China is about to implement major changes to its education and vocational training system that will serve the new, more digital and more automated economy in the future. If Beijing prepares people for this transition, it will serve as a model for economic restructuring in other countries, according to the McKinsey Global Institute.

The Asian country can account for a third of global changes in professions and skills. By 2030 at least 220 million Chinese workers, or 30% of employees, will have to change professions due to the digitization of their economy, the think tank analysts say. 

A revolution in the field of vocational training is necessary for China to continue raising the standard of living and reach 70% of the average GDP per capita in 2050. To make this revolution, Beijing must transform its education system, including in this transformation all working adults. In fact, these plans are already mentioned in the projects of the Chinese government, recalled Wang Zhimin, director of the Institute of Globalization and Modernization of China at the University of Foreign Trade and Economics.

Is Beijing ready to make this ‘revolution’?

From the point of view of state strategy, the Asian country began to prepare for new changes and modernization of the economic structure since 2012, when the XVIII National Congress of the Communist Party of China was held, the expert recalled.

“In reality, it is a systematic project that will cover the smallest details in different areas, including education, whose model will change from being empirical to research and innovation. It will also emphasize (…) the financing of companies and other issues. We can say that we are prepared, we have a plan, but we have not yet focused on the details,” Wang Zhimin said. 

His point of view contrasts with the researcher Wang Zhiyong at the Institute of Population and Labor Economics of the Chinese Academy of Social Sciences. In his view, China is not yet ready to make a global change in the education system necessary to train its citizens in the new professions. Furthermore, this transformation usually happens very quickly and our education does not keep pace. Above all, the problem related to the retraining of peasants and factory workers will require a lot of effort from the state, he added.

“As we can see, the scale of employment in the manufacturing industry has decreased in recent years. Despite the global trend, our secondary sector still needs to apply a lot of efforts to develop. Also, a large number of cities and districts are in the process of transition to a service economy. All of this can lead to many people losing their jobs in the process of this restructuring,” warned Zhiyong.

Who will have the hardest time to move to a digital economy?  

On average, at least 87 workdays will be “automated” in the next decade, McKinsey experts noted. Between 22% to 40% of the jobs of 331 million migrants will be at risk. At the same time, by acquiring new skills and abilities, workers will release up to an average of 40 days per year. 

Those who do physical work, such as those in low-level jobs in manufacturing, may run into the need to change jobs, said Wang Zhiyong.

“In particular, I am referring to the work that can be implemented by robots and artificial intelligence. For example, some bank employees will be replaced one day by ATMs or online banks,” said the Chinese expert. 

However, he added that it will be impossible to fully replace low and middle-level workers because their number in China’s manufacturing industry is huge. 

East’s growth overtakes the West

At the end of December 2020, a team of experts from the Fletcher School of Law and Diplomacy at Tufts University, together with the company Mastercard, analyzed the level of digitization of world economies. Their research, which covered 90 countries with different rates of economic development, showed that China ranked first in 2020 in terms of the growth rate of digitization. In addition, the Eastern countries, for the most part, were in the top 10 of that list.

“In the contemporary world there is a trend related to the active growth of the East and the slowdown of the West. Eastern countries pay much more attention to economic development. States with systems similar to those of China have advantages, the Eastern mentality allows them to implement various projects more efficiently.”

At the same time in the West there are many problems, the discrepancies in society are on the rise, they are particularly obvious in the US and Europe. Furthermore, Asia now pays a lot of attention to cooperation, while Western countries, for the most part, tend to be divided,” sums up Wang Zhimin. 

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