Renowned economist Lawrence Lau says China must shift from quantity to quality, focusing on 12-year schooling, more basic research, and Greater Bay Area integration. He notes that since the 1978 reforms, China is working smarter to boost total factor productivity and develop new quality productive forces.
Economist Lawrence Lau: China's shift from 'working harder' to 'working smarter'
In the South China Morning Post's 'Open Questions' column, renowned economist Lawrence Lau discusses China's drive to build a high-quality production force. He explains that in 1978, when economic reforms began, China mostly worked harder, generating more output from more inputs, not smarter. Now, China is entering a stage where it is trying to work smarter, meaning its total factor productivity increases. That's the gist of the emphasis on new quality productive forces. Basically, growth doesn’t come from just quantity anymore—it also comes from quality.
Lau notes that China is believed to be good at taking other people’s technology and turning it into large-scale production, its edge in going from '1 to n.' Examples include Alipay, WeChat, high-speed trains, aircraft carriers, nuclear weapons, TikTok, and DeepSeek. The key question is whether China can invent from scratch, or go from '0 to 1.' China has advantages in economies of scale and 'learning by doing' through repetitive production.
To achieve this shift, Lau recommends focusing on 12-year schooling, more basic research, and Greater Bay Area (GBA) integration. These steps will help China move from imitation to original innovation, fostering high-quality economic growth. The article was published on February 2, 2024, with keywords including DeepSeek, Singapore, Japan, Nigeria, Shenzhen, R&D, Huawei, BYD, Hong Kong, TikTok, GBA, Europe, China, Alipay, and Beijing.
"China is really trying to work smarter, which means that its total factor productivity increases. That’s the gist of the emphasis on the new quality productive forces. Basically, growth doesn’t come from just quantity any more – it also comes from quality." —Lawrence Lau