Deepening our Understanding of China

16 March 2017

Dr Jane Golley, Deputy Director of the Australian Centre on China in the World, has been delving into China’s economy for over two decades.

At the core of her research, Dr Golley explores wealth, power and inequality in China. One of her recent studies, “Inequality of Opportunity in Education in China”, shows that the benefits of economic growth is not always even. Instead, during the last four decades of rapid economic growth, the gap between the ‘haves’ and ‘have nots’, stemming from their different educational opportunities, has widened.

“Some people take equal opportunity as a given, and argue that those who fail to succeed in life do so because of a lack of effort. But in a world where we all face different circumstances – our location, gender, parental backgrounds and ethnicity – this is not always the case. Understanding the sources of unequal opportunity in all facets of economic development is an issue that should matter to everyone, both in China and beyond”.

Another key focus of Dr Golley’s research is the link between demographic change and economic growth.

“The One Child Policy, not dismissing its vast costs, actually helped to boost China’s per-capita income in decades past. Lower rates of population growth boost per capita income growth because slower growth of the labour supply leads to upward wage pressure and ultimately higher incomes – and  this is essentially what economic development is all about,” explains Dr Golley.

When China abolished the one-child policy in January 2016, replacing it with a two-child policy instead, the Reserve Bank of Australia called on Dr Golley to model the domestic and global impacts of this policy change through to the year 2050. Her findings suggest China would suffer from a higher birth rate in terms of its per capita income.

“Changes in China’s birth rates, gender ratios, and other key demographic variables have global impacts that are amplified because of China’s vast population. For example, more babies in China impacts on Chinese wages, leading to changes in what they produce, and what they trade with the rest of the world.” As the number one trading partner of so many countries across the globe, demographic changes in China matter far more than those elsewhere.

China’s vast population doesn’t only matter for economics, it matters for the environment too.

“The magnitude of China’s population makes it the world’s largest carbon dioxide emitter – and a growing population, being encouraged to consume more and more, will lead to even greater emissions into the future.”

“This will remain one of the most serious challenges for China and the world for years to come” says Dr Golley.





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