Human Capital Investment And Long-term Economic Growth In China

Economic growth is always one of the focus by economists. During the past twenty years, China's average GDP growth rate is above 9% while that of the developed countries only are approximately 3%. The reason for China's fast economic growth and its development pattern becomes the concern among the experts.The first part, after introducing the concept of human capital and the theory of human capital investment and economic growth, the thesis focuses on the seven impact of human capital investment in economic growth, that is, factor, resource allocation, spillovers, complementality, derived income, impetus to science and technology, structure. It also points out that the economic growth depends on the knowledge accumulation, technology advancement and human capital level which directly determine the economic growth rate and income in one country. Therefore, the achievement of China's sustainable economic growth is closely related to the strengthen of human capital investment.The second part, the thesis analysis the reason of China's economic growth in the past twenty years and comes to the conclusion: material capital brings about China's fast economic development. From this point of view, its development pattern is at the cost of resource consumption and environment deterioration compared with developed countries. The growth pattern will become an obstacle to sustainable, steadfast and healthy economy development.The third part, the author emphasis on the strategy of human capital investment and its impact on economic growth in USA and Japan, which may benefit China in this field. After World War II, USA experienced a fast economic development, which is based on the heavy investment of technology advancement and the improvement of labor quality. The government pay much attention to the progress of science and technology and support high-tech industry. Education is also be valued in order to enhance the quality and skill of labor. Optimization of the resource structure and implementation of scale operation is also adopted. Industry policy is attached great importance as well to achieve the continuous update of industry structure. Especially the previous two policies play an important role in the change of the economic growth mode. The rapid development of postwar economy in Japan benefit from its pursuing the strategy of giving priority to education.The forth and the fifth part, from theoretical and empirical point of view, thesis analysis the current problems in human capital investment in China, especially focusing on formal education and vocational training and proposed the corresponding policies. First, education investment should be strengthened and unreasonable education system must be improved. Second, human capital incentive mechanism should be established and developed. Third, labor market must open and be invigorated. Fourth, great efforts should be made to enhance the nation quality.