Publication Type: Conference Paper/Unpublished Manuscript
Abstract: In 1999, the Chinese government began the Western Development Program in an effort to attract Foreign Direct Investment (FDI) to the western regions of the country, as the income disparity between the eastern and western half of the country was growing acute. This program has been successful in some ways but has not had the impact that was intended.
The authors argue that FDI will not flow to the western regions in any great quantity for a number of structural reasons and that a different approach is needed to promote growth in the western portion of the country. The approach advocated is knowledge based and is possible in China because of the high degree of state control over higher education that exists in China today.
By allowing a select number of schools in the western regions of China to provide a more westernized higher education experience (including allowing students to choose their major), China can attract some of the brightest minds to the more economically backward portions of the country. This has the twin benefits of helping to remove the stigma of moving to the western regions of the country and infusing highly educated individuals in the western regions.