Craig
10-20-2002, 09:42 PM
http://straitstimes.asia1.com.sg/asia/stor...,150211,00.html (http://straitstimes.asia1.com.sg/asia/story/0,4386,150211,00.html)?
Spending on education is China economy's big hope
Parents splurging on their kids' education may provide the much-needed lift to domestic demand which has been in a slump
By Jason Leow
BEIJING - Cab driver Tian Yueyuan is willing to spend almost every yuan he earns on his 14-year-old son's education, and he is not alone.
Across every major Chinese city, parents provide a potentially huge market for the education sector, and their spending could boost the Chinese economy tremendously.
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Yet, parents scoff at the low quality of many education providers, or find reputable ones too expensive. Economists say restructuring the education sector is one way of encouraging parents to pump more money into the economy.
'The government says domestic demand is slumping, but here's where there is huge untapped demand,' noted economist Wang Rong.
In a year's time, Mr Tian hopes to send his son to Britain, where he will attend boarding school, take his A-levels, and hopefully, be admitted into Cambridge to study economics.
To fulfil this family ambition, Mr Tian spends almost all his 2,000-yuan (S$440) monthly wages on Xiao Hu's education, reflecting many urban residents' spending pattern.
Mr Tian and his wife, who earns about 1,200 yuan a month, splurge on assessment books, novels and educational videos for Xiao Hu, and are now looking for a second-hand computer for their son to stay in touch with tech-savvy friends.
Big-spenders such as the Tians are life-savers for China's economy, almost 90 per cent of which depends on local consumption. Yet, the latest numbers from the National Bureau of Statistics (NBS) show the Consumer Price Index falling and domestic demand slumping.
In the first nine months of this year, prices of consumer goods fell by 1.6 per cent.
Prices of services rose by 2 per cent in the same period.
The trends suggest the market is not giving consumers what they want.
'There is some irrationality in the economic structure,' said Dr Qiu Xiaohua, deputy director of the NBS, at a regular press briefing last week to introduce the latest set of economic figures.
The market is flooded with consumer goods. Consumer durables, such as colour television sets, refrigerators and air-conditioners are no longer hot items in urban centres, where between 70 per cent and 90 per cent of households own these items.
People want services, especially in education.
A major survey conducted in July by Beijing-based China Mainland Research Company, covering 31 cities, showed that almost two in five urban residents spent the most money on education.
The same survey reported that one in five of the 9,212 residents polled described their 'children's success in studies' as the happiest event in their lives.
Educational success outweighed every other factor in bringing happiness, including buying a home. Yet major cities such as Beijing and Shanghai boast a glut of condominiums and not enough education providers, economists told The Straits Times.
How the education sector could upgrade: Provide better quality assessment books for children, more competitive prices for language courses, especially English and eventually, even specialised classes such as speech and drama.
China's burgeoning market for adults in MBA education also lacks quality assurance.
But education is poised for an overhaul, following China's entry into the World Trade Organisation.
Spending on education is China economy's big hope
Parents splurging on their kids' education may provide the much-needed lift to domestic demand which has been in a slump
By Jason Leow
BEIJING - Cab driver Tian Yueyuan is willing to spend almost every yuan he earns on his 14-year-old son's education, and he is not alone.
Across every major Chinese city, parents provide a potentially huge market for the education sector, and their spending could boost the Chinese economy tremendously.
Advertisement
Yet, parents scoff at the low quality of many education providers, or find reputable ones too expensive. Economists say restructuring the education sector is one way of encouraging parents to pump more money into the economy.
'The government says domestic demand is slumping, but here's where there is huge untapped demand,' noted economist Wang Rong.
In a year's time, Mr Tian hopes to send his son to Britain, where he will attend boarding school, take his A-levels, and hopefully, be admitted into Cambridge to study economics.
To fulfil this family ambition, Mr Tian spends almost all his 2,000-yuan (S$440) monthly wages on Xiao Hu's education, reflecting many urban residents' spending pattern.
Mr Tian and his wife, who earns about 1,200 yuan a month, splurge on assessment books, novels and educational videos for Xiao Hu, and are now looking for a second-hand computer for their son to stay in touch with tech-savvy friends.
Big-spenders such as the Tians are life-savers for China's economy, almost 90 per cent of which depends on local consumption. Yet, the latest numbers from the National Bureau of Statistics (NBS) show the Consumer Price Index falling and domestic demand slumping.
In the first nine months of this year, prices of consumer goods fell by 1.6 per cent.
Prices of services rose by 2 per cent in the same period.
The trends suggest the market is not giving consumers what they want.
'There is some irrationality in the economic structure,' said Dr Qiu Xiaohua, deputy director of the NBS, at a regular press briefing last week to introduce the latest set of economic figures.
The market is flooded with consumer goods. Consumer durables, such as colour television sets, refrigerators and air-conditioners are no longer hot items in urban centres, where between 70 per cent and 90 per cent of households own these items.
People want services, especially in education.
A major survey conducted in July by Beijing-based China Mainland Research Company, covering 31 cities, showed that almost two in five urban residents spent the most money on education.
The same survey reported that one in five of the 9,212 residents polled described their 'children's success in studies' as the happiest event in their lives.
Educational success outweighed every other factor in bringing happiness, including buying a home. Yet major cities such as Beijing and Shanghai boast a glut of condominiums and not enough education providers, economists told The Straits Times.
How the education sector could upgrade: Provide better quality assessment books for children, more competitive prices for language courses, especially English and eventually, even specialised classes such as speech and drama.
China's burgeoning market for adults in MBA education also lacks quality assurance.
But education is poised for an overhaul, following China's entry into the World Trade Organisation.