China is far outpacing the United States and other countries with the amount of technology savvy graduates each year. These strong resources are flocking to major Chinese outsourcing companies. The overall number of scientists and engineers and other trained professionals has been steadily increasing, and the education pipeline at the tertiary level is filled with literally millions of students entering colleges and universities in recent years.

China is on an explosive trajectory to becoming a knowledge-intensive information society.  The country already has the world’s largest base of mobile subscribers – 426 million as of mid-2006 and is expected in 2007 to replace the U.S. as the country with the largest number of Internet users (the number was 123 million as of mid-2006).  Increasing household PC ownership and telecommunications infrastructure will give the ICT industry further room to grow.  The coming launch of the third-generation (3G) mobile service will be another stimulant for FDI and China’s ICT industry.  Informatization is embedded in the changing composition of FDI and the growth of China’s high-tech industries.

Chinese leadership understands the importance of education to China’s potential S&T leap-forward as well as economic and social development.  China has increased education expenditures over the last decade and will continue to do so in the years to come.  In fact, China has much room to grow in this regard.  Measured by education spending as a percentage of public expenditure, China’s 3.32% is among the lowest in the world (the same indicator in 2002/03 was 4.1% for India and 4.3% for Brazil).  Still, the investment in the upgrading of Chinese universities has been substantial by domestic standards, with universities now becoming a more central player in the R&D system instead just being primarily teaching institutions.  New facilities have been built throughout the country, many with advanced equipment and research space.  The principal shortage has been in the area of qualified faculty to teach the growing number of university students at the graduate and undergraduate levels.

The growing technological sophistication of the Chinese economy and society is reflected not only in the increasing number of Chinese receiving higher education, as described above, but also in the increasing share of high-tech exports in the country’s overall trade.  In 2004, China’s high-tech exports hit US$165.5 billion, representing a more than 58-fold increase over the level of high-tech exports in 1991.  China’s high-tech sector also has started to move up the value chain as the result of both the changing structure of FDI and China’s indigenous efforts.

Finally, on average, scientific research has outperformed other occupations in wage terms, with those working in the ICT sector being among the best paid in China.  Because of the increasing mobility of global talent and in response to some of the prevailing as well as projected shortages of needed talent, wages in these advanced sectors have been steadily converging with international levels in the US and Europe.  Headhunters in Beijing and Shanghai report that Chinese firms such as Huawei and Datong as well as Lenovo find themselves paying closer and closer to U.S. wages to attract qualified talent to their R&D labs and engineering-design units.