Human capital, education and growth: China and India compared

The growing level of economic integration throughout the world is rendering the traditional patterns of trade-for the most part based on cost advantages-obsolete. These trade patterns are increasingly based on 'non-price' competitiveness (quality, information and knowledge-intensity). As a result, appropriate human capital accumulation and development is a prerequisite for modern economic growth in both developed and developing economies. China and India are two large countries that have chosen the path towards global integration through the implementation of economic reforms. Consequently, the quantity and quality of their human capital, which is a function of schooling, is bound to become a key issue in their developmental strategy. This work will compare the developmental experiences of India and China so as to analyse and contrast the role of human capital accumulation through education in these countries' economic growth, particularly since the beginning of the economic reforms. Our contribution lies in the continuation of the debate on the human capital-growth relationship, a debate initiated during the Industrial Revolution in Europe and culminated in the fifties, and, in more recent times, with the advent of the so-called 'new' growth theories. In particular, it rests on the hypothesis that the population's formal level of schooling largely governs the acquisition and application of new knowledge and the prospects for economic development. The second part of this article will provide a critical assessment of the Chinese and Indian educational systems. Before that a brief discussion of the role of human capital in the process of economic growth is suggested, with particular emphasis on the differences between this role in developed and developing countries. Conclusive avenues will be proffered.