China’s development strategy

1 In the latter part of the 1990s the discussion of the knowledge economy became very intense in China, as a perception arose that China's continuing development would take place in a quite new world. This discussion was vigorous and influential at the highest level, but became increasingly diffuse, as different participants used concepts in very different ways and came to quite different conclusions. The relevance of the concept of the knowledge economy to the quite specific circumstances of China also began to be questioned. The essays in this volume express this diversity of viewpoints and approaches, as well as the need to explore the relevance of the knowledge economy to China's situation. By bringing together the work of a range of distinguished Chinese scholars, leading authorities from the OECD and the World Bank, and authors from Australia and several other countries, we aim to illuminate many different aspects of this important topic. This introductory chapter does not seek to summarise or review the individual papers assembled here – the introductions to each part of the book provide summary information for the interested reader. Rather we set out to address briefly some of the key questions that have arisen within the Chinese debate, and in particular to explore the relevance of the knowledge economy to China's development strategy. Our central argument is that the knowledge economy, as we interpret it, is of decisive importance for China. This is because the knowledge economy will provide a fundamentally different global context for China's development, one very different from the context of recent decades and far removed from that in which 2 China's future in the knowledge econony the developed countries, and even the East Asian Tigers, achieved sustained growth. This quite new context means, for example, that the traditional development strategy based on industrialisation will not be sufficient, as global manufacturing becomes highly productive, intensely competitive and providing an ever smaller share of total employment. It also means that China's response to the knowledge economy will not simply involve a progressive adaptation to the institutions, systems and policies prevailing in advanced countries and forged in the industrial era. New and distinctive approaches to development strategy, which take account of both China's specific circumstances and the new global realities, need to be thought out as a matter of urgency. Such approaches will require, in our view, new emphases in a number of areas. …