The Highest Exam: How China’s Gaokao Shapes a Nation

Hi everyone. Thank you for joining us today for a program titled The Highest Exam: How China Scoutcow Shapes a Nation. I'm Jennifer Chu and the

Nation. I'm Jennifer Chu and the director of research and strategy at the Center for China Analysis at Asia Society Policy Institute where we take an inside out approach to China an

analysis from anywhere from elite politics to economic development, technology breakthroughs, societal trends that have policy relevance. I'm

really honored and delighted to be joined here today by two wonderful scholars, economists, um longtime colleagues and authors, Hong Bin Lee and

Ria. Hungin is professor of economics

Ria. Hungin is professor of economics and the co-director of the Stanford Center on China's economy and institutions. And Ray is also professor

institutions. And Ray is also professor of econ economics at UC San Diego and co-director of the China data lab. Ra

and Hung welcome. Um they are here to talk about their fascinating book, The Highest Exam: How the Gao Shapes China.

Um and thanks, I really want to thank Ray today because I know you're joining us from Hong Kong and standard time kicked in in the US and it pushed back by another hour. Um an hour that's

already uh late in Hong Kong. So thank

you very much. So both of you I learned so much from your fascinating book that is uh both really readable has very engaging uh writing and also as many an anecdotes from your own personal

experiences of the gao as well as your academic and professional journey. But,

you know, it helped me to sort of piece together information that I already knew but um didn't quite piece together, which is that um after the cultural revolution, the average adult in China

had barely uh four years of education.

So, many could um you know, barely read or write. But you fast forward to today

or write. But you fast forward to today to by 2021 astonishingly um the uh 35th of the young adult

population 18 to 24 year olds were enrolled in college. So compare that to the US where um the same demographic the uh enrollment rate is about uh two is

about onethird a little over one-third 38% to be exact. So this is a massive roll out of the educational reform under

Tung Xiaoping at the end of the 1970s.

We all know that China is famous for scaling up and for its speed. And this

seems to be a classic example of this.

And this brought home to me um how farsighted and transformative this is.

And we're going to hear more more from both of you as to the achievements of this phenomenal educational transformation. But it also occurred to

transformation. But it also occurred to me that we could characterize China's educational reform as a kind of industrial policy. The state mobilizing

industrial policy. The state mobilizing its resources, directing talent, and shaping national priorities through education.

It's also of course an idea deeply root rooted in Chinese history stemming from its imperial exam where the emperor is able to select from the best of the

nation who would join his bureaucracy.

But to be clear, the Kaoka, the highest exam was established in the 1950s soon after the cultural revolution um and then paused during the cultural um soon after the um communist revolution,

excuse me, and then paused during the cultural revolution and then reinstituted in the 1970s, late 1970s.

So I've asked Rish and Hong Bin to give a brief overview of their book because the themes are very rich. There are so many details that we can't capture in just a moderated discussion. And so

we'll kick off with Rishi explaining Kaoka is how she describes it as a centralized hierarchical tournament both its structure logic and historical roots

and then we'll turn to Hong Bin to um give us a sense of the achievements the outcome of this uh highest exam some of

its um um uh inequalities as well areas in which it could could improve um so um with that I want to start with rabbit Before I forget, I want to put

into the chat information about this book and also a wonderful recap that Hungbin Center Stanford Center and Chinese economy institutions did on this book so that uh folks who are listening

who are viewing us can get a a quick overview of the entire book. So we'll

take about 15 to 18 minutes for the overview uh by Ruin Hung and then we'll launch into a moderated discussion thereafter. In the meantime, please feel

thereafter. In the meantime, please feel free to um put in your questions into the chat box, into the Q&A box at the bottom of your screen. Um and we'll get

started. So, over to you, Rishray.

started. So, over to you, Rishray.

Okay. Thanks, Jennifer, for the uh generous introduction and thanks everyone here. I wish we could meet in

everyone here. I wish we could meet in person. It would be much more fun.

person. It would be much more fun.

Anyway, I'll try my best in late night in Hong Kong. Uh so this is know this is a great opportunity to share a little bit about our new book uh which is

actually trying to explain how China's education system works. Uh and we will see why we we picked this title. Since

you are in this webinar I imagine you know all of you know about China and know that Chinese families are obsessed with education. In this age we naturally

with education. In this age we naturally wondered does does AI know that the answer is yes. If you ask GPT about the

top meal time conversation and for China you know children's education academic performance is on the top whereas in in the US is work job and sports. This is

obsession with education is not only about talking and thinking it's also about money resources energy spent on this. Here is just some numbers

this. Here is just some numbers describing uh how much each household average household spend on education. Uh

and cross country wise, China still stand out on the top in terms of the share of spending. Um so what's special about Chinese education? I guess most of

us would agree that China's education its heart is exam system and GAO of course is the peak of this exam. So

that's why we picked that as a starting point and even as a title but the book is is about the exam system as education system in general. Uh so what's special

about such a system? As we know education is important in every society.

In every society children from richer families are more likely to go to Stanford and Harvard. It's unequal

right? So what makes China's exam centered education system special? Why

Chinese are so obsessed with this exam especially the GAO? How equal or how unequal this system is? How could such a system has you know it has as Jennifer

said has a long history. It can be at least traced back to 600 AD. Some

historians even traced even further to Han dynasty. So how could it survived so

Han dynasty. So how could it survived so long and how this system related to the Chinese society uh in general? uh so

these are the questions motivate our research and after like for me 15 years for home is even longer we think we have some answer we would like to share with you and obviously there also at national

level implication right how does education helps with China's global power especially in this age of US China competition and what would h happen if

when the exam empire expands meaning that Chinese immigrants to other countries especially to the us and you know we ask ourselves also how should we

educate our children and our students by you know if we know a lot about this system uh so this motivate us to write this book is a kind of a little bit

special book is not very academic it's very readable and very short I'm proud it's very short and we talk about our own experiences it's not as examples

it's not that we we love ourselves so much it's more about use this as example to show how our trajectories reflect the larger system and we hope to provide

readers a framework to understand the system. I many of you have very you know

system. I many of you have very you know deep feelings about this system know a lot of details but think this book as a pair of glass once you wear it probably

you can see the system uh you know you know as a whole picture and this glass is useful to interpret other phenomena and implication including you know

China's global power and how Chinese system might you know affect or or influence American education and society.

Uh so in this very short talk I just give you a brief introduction of the framework we characterized as a centralized hierarchy called tournament.

I explain what these three words mean and how families, society and state kind of behave in such a framework.

So but let me start with hierarchy. Of

course if you grew up in China, East Asian society are familiar with hierarchy. These are very hierarchical

hierarchy. These are very hierarchical society. Historically the hierarchy was

society. Historically the hierarchy was clear. There were four class. The

clear. There were four class. The

gentrio is on the top. If you pass the exam you become the gentry class.

Today's hierarchy is more complicated.

Right? It could be rural versus urban, professor versus peasants, richer people, poor people, even education itself. If if you graduate from Chinua,

itself. If if you graduate from Chinua, you are at the top of the education hierarchy. So from you know as Jennifer

hierarchy. So from you know as Jennifer said you know on the one hand there's huge changes of Chinese society but on the other hand there's something very

persistent. So here is some number come

persistent. So here is some number come from hungin's large scale survey when he was working with Chinua where for few years they keep asking college graduates

fresh graduates what their ideal job if they could do and as you see that over the years the over 60% still prefer the state sector as their ideal job right

this is almost like the you know the more than 21st century definition of gentry class is working for the uh state sector sector and I imagine if you you we can discuss later if you do this

survey this you know in recent years it would be even more so with the economic slowing down so that's the hierarchy part and the tournament part what does

tunate mean so tunate has two clear features one is there transparent and clear rules so the rules are very clear the second is there's a measurable

objective criteria so in this case would be test score and this is you know this this is the first lesson of tournamentate for Chinese for mostly

Chinese because we didn't play sports really right we learned by taking exam and learning about tournamentate and being a tournament has different implications we can discuss more in the

Q&A but for but I just want to uh I highlight one feature which is which is mean that tournament for tournament selection is crucial so you can think

the Chinese education system is first primarily is a selection uh mechanism then it's education system which means in this system being ranked high is more

important that what you have learned and it has different you know it has strength and problems one problem is the selection often happened very earlier

take the galo as example like it it happened when we were 18 or 19 right and we took that exam it's largely determines our field our university

which looms lot large in our life trajectory and I were lucky we chose economics but we like it but many people didn't like what they chose uh so that's

the tournament nature and the third feature of the Chinese education system is this centralized system obviously this reflect the larger society is the

political centralization and the education system especially the exam system from very starch from the history it was designed as a governness from the

central government perspective. Of

course you know fast forward in nowadays the goal which happens every year in the same time across the whole country is clearly a tournament is a centralized

tournament. The college quarter is

tournament. The college quarter is centralized and allocated by the ministry of education. You know in the part you know if the government encourage certain field it can easily

increase that quarter and attract more young talented people and admission is centralized and this feature is not only about the go cop see right even if you

look at the K12 schools it's a centralized system the school officials have bureaucratic ranks which is quite special if you apply if you are head a master of a school you actually have a

bureaucratic rank in the government and obviously in the system school curriculara is also centralized and carefully designed and monitored.

So once you have this framework I think you you can use it to to understand the behavior of families rulers and society.

Let me start with families. So in this framework in this kind of system family's obsession is rational. The

reason is that actually many people most people would think one point make a difference in this hierarchy and if I invest more in my children he or she get one point and that means a different

tier of college that means a different uh kind of future income and life. Is

this true or not? Hi and I had a research paper where we look at the just the students one point above and one point below uh the elite college cutoff

and we do find that if you're one point above in principle we are very very similar you know Jennifer is one point below the cutoff but I'm lucky I get one point above and I'm more likely to go to

elite college and four years after when I graduate actually also more likely to get a first much better first job. So

this kind of perception is also reflected in the data. So naturally you know families want their invest a lot just for one point more and and for

rulers and and I want to emphasize that the education from history till today is a very very important governance channel and the exam system is also very

effective governance uh design because it's kind of offers hope and stability and loyalty to the system. It's true

that you know it's in the end this who could succeed in the history to become a co like the degree holder or today to go to chinwa the chance is very small but

exactly everyone has hope to do that and the hope is very very important and if you kind of failed in the system you don't blame the system right you blame

yourself that oh or you think I'm not really working hard enough or I'm not smart enough right and it's kind of from governance perspective Ive is pretty clever design and of course if you gain

power from the system you don't attribute it to the family attribute to the system and from national level it's not bad it's actually indeed recruit talents to serve the government and

today to serve the country and many institutional features like many people complained about the regional cultures right some region like Beijing Shanghai

gets much higher quarter per capita for elite colleges my home province Shandong gets much lower quarter. Uh but from you know state perspective this comes from

this is a design for balance of power.

It's not thinking about whether Shandong people would have good life or not. You

think about politically which region is more important. So all this of course

more important. So all this of course you know by kind of centralized and designing the curriculara it also has monopoly of ideology power. So from

maybe many of you think of of yourself how you participated in this system and how much you invest but take a step back and look think about you as a ruler. You

might like this system. Uh and in history we also know what happened when this ex this exam system was abolished right at least it was abolished in 1905.

I had earlier paper with in from Chinese University of Hong Kong. We look at what happened afterward and we do find in the region that have better more hope

actually produced more people joining the existing revolutionary uh organization which might in the end hasten the downfall of theQin dynasty.

And when this paper was published it was discussing foreign policy not about China. was talking about meritocracy is

China. was talking about meritocracy is essential for America and America also faces challenges. I think this is a

faces challenges. I think this is a general lesson for every society giving young people hope is very very essential for stability.

uh and from the societal perspective I just want to emphasize one thing that on the one hand yes education can influence the society on the at the same time

education also reflects the society mirrors the society so we're talking about the centralized hierarchical tournament is not limited to education

it applies to political promotion to academics tenure evaluation applies to many uh tournaments in business environment ments and there's logic

here. It's not that Chinese people enjoy

here. It's not that Chinese people enjoy being ranked. It's more like uh you know

being ranked. It's more like uh you know without a transparent kind of criteria uh then you know power can easily influence you know opportunity right

many people like a goal not that we we enjoy gau it's more like the counterfactor the alternative seems to be worse without a transparent rules and

that's what makes many Chinese families obsess obsessed with gau and of course you know this this such a system also influence or affects the society ships

values right as I said earlier it to kind of give a lot of respect for winners and with very limited empathy for losers because you know losers you know they didn't perform well enough

they are not smart enough or they didn't work hard enough this makes people very skeptical of a welfare state and with Chinese inequality growing more and you

know more and more serious in the decades we have to ask ourselves how to make the society better if if you keep this type of values right of course with economic slowing down this naturally

kind of this tournament style computation naturally would lead to this evolution or ninja and that's it's kind of very uh serious of at least has a lot

many people related to across different parts of the society so I will stop here just in one you know sentence if I say what is Chinese education system I would

say it's a centralized hierarchical called tunamate and the exam is kind of a very effective tool to implement uh this tunimate and once you have this

framework then you can use it to explain different implications and I will let home uh to continue uh the discussion

>> so uh so have laid down the framework of the book so we call China education as a centralized hierarchical tournament so I'll pick up from here to give you a few

examples how this system work and how it doesn't. So the first uh uh usually talk

doesn't. So the first uh uh usually talk about uh this system gives people opportunities to uh move up or create social mobility but social mobility

doesn't mean everyone has an equal chance. So we do study the inequality of

chance. So we do study the inequality of the system. Next slide please.

the system. Next slide please.

So there are a few things that affects uh inequality or equality. If you think about China's exams, every student has the chance to take the exam. But before

I take the exam, the prep preparation is different. So it depends on uh like

different. So it depends on uh like family income, where you are born, where you grow up, these are all important.

China has a very important system called hook system. So hook system has two

hook system. So hook system has two dimensions. Uh uh when you born you

dimensions. Uh uh when you born you given a hook on your hook card it says where you can live where you can go to school where you you can go to hospital

where you can work actually. Uh

so the hook has one dimension rural urban. So you define agriculture or non

urban. So you define agriculture or non agriculture. You also depend uh which

agriculture. You also depend uh which city or which province you live for example every province has its own kota. So the

kota is assigned by the central government.

So some provinces have more kota than others uh relative to the population.

For example, uh it's much easier to uh get into a college in big cities like Beijing and Shanghai or some uh like uh

western provinces like Shinjang, Tibet, it's much harder to get into a college in a central province like Shandong Han.

So this really big populous kind provinces with fewer elite colleges.

There's also a very big rural urban gap as you know that uh China's urban areas is relatively more developed than rural

areas especially in uh non- coastal areas. So this gap uh also means the

areas. So this gap uh also means the education resources are different in different locations in rural or urban areas. uh this will affect how well

areas. uh this will affect how well students are prepared for goal and how high they can score in the goal and where they can go to. Next slide please.

So I wrote a paper with a colleague at Stanford. Uh we are curious how family

Stanford. Uh we are curious how family income affect the chance of a student

getting into a college. So we compare uh income from the bottom 20% to the top 20%.

So as you can see overall getting into elite college in China is very low. Even

for the highest group which is group five the chance of getting an elite college is about 4.5%.

So this is about the admission rate of a college like Stanford and Harvard. So

very low.

But if you move down to the income hierarchy for the bottom 25% income households, uh their children's chance of getting into college is 1.8%.

So if you compare the two groups, the top 20% to the bottom 20% income, the ratio is about 2.5, which means the chance of getting into a

college for the rich families is 2.5 times higher than the bottom 20% income.

So this is a very large inequality. But

compare China's inequality to the American inequality actually American uh career admissions is even more unequal. So this is study

done by our colleagues at Harvard Roetty we just said their their numbers.

So the US in the US the top 20% income has a chance that 11 times of the bottom 20%

income in getting into a elite college.

So remember China is 2.5 America is 11 times is much higher in quality. Uh so

this higher in quality we are going to discuss later maybe but it's probably due to different admission systems. China is one one test. Uh in the US you have many dimensions. You have in the

college applications, you have college assets, you have uh GPA, you have SAT, you also have a lot of extracurricular activities which is based on income. Uh

you al also uh in the application process you also uh report your your your family background which are also important in career admission. Next

slide please. Uh that could be the source of inequality. Uh

next uh how does education uh at a macro level affects our country's global power? Uh there are two things we uh

power? Uh there are two things we uh wrote uh in the book. One is how education affects a country income. So

we have early studies that show that income is very important for a country's uh GDP.

Uh actually uh the paper uh we wrote uh a decgo showed that uh education contributed to about a third of China's

economic growth in the past three or four decades. The other twoirds of

four decades. The other twoirds of course was contributed by uh economic reforms opening up also foreign trade with America and the rest of the world.

uh how the centralized system uh can hack this because the because the system is centralized uh the country can quickly

mobilize resources is pan education remember China almost had no college students in the late '7s

today uh more than half the the younger generation go to college uh China expand uh the education to the level that uh each Here the country

admits about 12 million college students. This is the largest college

students. This is the largest college admission uh in any country around the world.

The system not only can expand education, they can also decide what is important for uh a country development.

So in the past few decades uh China uh decided that STEM is important.

basically uh science, technology, engineer, medicine, all these fields are important. So uh China admit about half

important. So uh China admit about half its students into STEM field. Every year

China has about five to six million people in the STEM field.

So Americans uh number will be only about 10% of this. So every year so which is which means uh China has a lot of them. That's why it can quickly

of them. That's why it can quickly expand its uh uh manufacturing sector also uh can quickly move up in the industry uh hierarchy in the global uh

uh supply chain. Next slide please.

Of course this system may also have some cost because uh uh what if a country uh made a mistake in uh uh deciding what is important in education for this country.

uh in the another uh chapter of the book we talk about how one Chinese and also uh for foreigners like from India from

Korea when we come to the US how uh the immigrants affect American education uh fundamentally the two systems are different uh China's uh color admission

based on one test which is very objective transparent measurable score American education system admit color admission is based on a holistic system

which is is both objective and subjective.

Uh so the immigrants from Asia especially from China, India so they may call for a more objective transparent system because they are used to this

system back to their in their own own countries. uh because the uh uh the uh

countries. uh because the uh uh the uh difference there are a lot of debates or controversies around the country both from the national level and the local

level in national level we know there's a group of Asian people suing Harvard and this is the the reason for the abolishment abolishment of affirm action

in colon mission there are also a lot of uh local uh uh lawsuits such as in San Francisco area especially in Palato

actually uh school districts uh citizens suing the school district for uh like school uh math placement test

there's also a paper writed by economist called the white flight which means when Asian immigrants enter into a community

uh some uh non-Asian choose to leave the area because of the intense competition in school they don't want to expose their kids to stress test and early competition in school. Next slide

please.

Uh finally uh what's this uh implication of China education system on creativity?

This is a extremely important question uh especially if we think about uh uh the so-called uh the global tech

competition. uh uh so

competition. uh uh so this is also a very popular hypothesis in China especially uh uh given the

advancement of AI some people may say that uh because of AI the advantages of China's education may completely disappear because if you think about

China's educ system emphasizes uh learning and knowledge acquirement or memorization of knowledge

But in the time of AI kids may need to uh uh be curious, need to have critical thinking, uh need to have certain

skills. But this is not the advantage of

skills. But this is not the advantage of the Chinese education system. Uh but on the other hand, we also see that China's

uh fast uh advancement in manufacturing in technology. So

in technology. So just uh to to uh give a a simple conclusion there's no uh good empirical

economic research to really show uh the one way or the other of this hypothesis.

So rich and I collect together with uh two other colleagues, professor B and professor Bong uh we we have a recent

paper on how China's G call is correlated with entrepreneurship.

So we link uh the G call to whether a person becomes entrepreneur later.

Actually we found that it's negatively corrected which means the higher score in exam the less likely you become entrepreneur but we also find that

controversially that uh uh uh those who score higher when they start a firm they are more likely to become more successful entrepreneurs that firms

become bigger they are more likely be to be publicly listed [snorts] which means it's not a go call that hampers the

ability of uh it's not a creative ability to become entrepreneur rather it could be something else in the society that uh means that this higher score

students have a higher opportunity cost to become entrepreneur. So they they may choose to not to become entrepreneur because they want to become uh like

civil civil servants. Uh so they may enter the government rather than become entrepreneur. Uh [snorts] so

entrepreneur. Uh [snorts] so anyway, so we didn't find any uh uh uh really solid evidence that the system

really hampers creativity. Uh so I think we are going to stop here.

>> That was so fascinating and you were able to bring up so many aspects of this book that I so enjoyed and I know it encapsulates uh your decades of research and also your own experiences. So I

actually want to turn to the way in which the book was structured the way you wrote it. I actually worked at the Stanford Center on Chinese economy and institutions when you're writing this with Claire Kuseno who wasn't able to

join us today but um it's very unusual I think Rishi you touched upon this that economists you know uh you don't write books but also this book doesn't have any regression tables you know

complicated equations modeling um graphs and charts and so you made a deliberate decision here to take this in a more general direction I wanted to find out

uh why and And uh for um Hungbin, what is sort of the major main takeaway that you want our audience today uh people outside of China to take away from the

book? So let me start with you Ray.

book? So let me start with you Ray.

>> Okay. Thanks. uh uh I guess I don't know how many economists are in the audience but if you are you know that economists they don't write books or few people do

because we are not evaluated by books and it's not rewarded doesn't count in any evaluation uh so when economy there's minority of group of economists

who write books obviously I can imagine all of us has the aim to talk with a broader audience right um and that's like so when we decide to write the book

we think oh we'll avoid any figure any table just use plain English so that we can talk with you know a broader uh

readership and and cla obviously plays a crucial role for you know to help us to achieve that aim [clears throat] uh so that's yeah indeed uh it's just

try to see whether we can talk with people who don't like economic uh typical academic books So maybe reach out to the students as

well who's impacted by the gao and the exam system. Um so Hungin how about you?

exam system. Um so Hungin how about you?

Is there a main takeaway that you want our audience to um you know get from this book?

>> Yeah thanks. Yeah. So definitely know like your work and our work. So uh uh uh as China is becoming more important in policy making in in the US in the world

uh at the same time China is the least understood country among people outside China build the system although I mean China is a very big country very visible

but it's so hard to understand from outside because totally different system uh education is one system but I believe

this is the most most fundamental system that shaping China. It creates with many other systems, the political system, the economic system, the society. Uh we are

hoping to through this book can give people some perspective to see through the country and we as economist we try

to be objective so and only uh write the book based on logic and evidence.

>> Yeah. Um so I think that came through very strongly in the book which is that looking through the prism of um the highest exam you're actually able to understand many aspects of Chinese

society economy um political governance and that was the fascinating part part of the book of the book how you anchored it in the gao um so let me turn to you a

little bit regarding um one of the hot topics um among economists also sociologists political scientists about China today is the high rate of youth

unemployment. So, it's been stubbornly

unemployment. So, it's been stubbornly up near the uh 20%, I think right now it's at like 17%, 18%. Actually, some

social scientists in China actually uh marked pegged it at over 40% uh during the uh a few years ago. Um so Rachel you

convincingly uh told us the sticking power of GACow how families devote so many resources and their um children go through this uh kind of a mother of all

exams hellish process. Um so do you think uh but in the US it's the opposite right sort of trust in higher education sort of enrollment rates are dropping.

um what kind of gives it this living kind of legitimacy and credibility and do you think that will have staying power over time uh in these uh in these

um times?

>> Uh yeah, this is a very this is a very good question. On the one hand, I see

good question. On the one hand, I see that why if you know if anything go become even more important. Why this is because education in you know every

society serves as a stratification mechanism right and the goal is effective stratification mechanism and with economic slowing down actually it's

become more important what why because uh you know with economic slowing down more people would like to work for the government and for the public sector and

for public sector it's actually more difficult to tell each individual's ability or knowledge right so the signal where you graduate from actually is very

very crucial uh for the public sector it's generally crucial for the Chinese society but even more so for public sector so in such at least in the short

and medium run because the importance of uh stratification which is actually even more you know salient with economic slowing down I think people's attention

to gau is sustained that said uh you know I think the slowing down and the over the decades the inequality has been

increasing more and more which families invest a lot in the system right in in when I grew up and I grew up in a rural village but anyway in that time in

general families are have very limited resources if they wanted even if they they all wanted to invest they didn't have a lot of resources in the system so go as a kind of

mobility channel worked well but over the past 20 years it didn't work so well. So I think this is a very

well. So I think this is a very important challenge uh for both the society and the government to think about how to you know it's old system

that worked in certain condition but but actually become a burden uh in in the new condition. So it's important to

new condition. So it's important to think uh you know how to innovate this system. Yeah, you touched a bit both um

system. Yeah, you touched a bit both um on sort of the areas of improvement for China's education system, but Hungbin, you also brought up very clearly sort of

the inequality um but actually how inequality in US is worse. It's even

more stark. Um and that was very interesting. But um for the uh sake of

interesting. But um for the uh sake of our audience, how would you uh explain maybe some of the reforms that you think China could undertake in order to flatten out its inequality? Uh I think

you already explained a bit as to why the US inequality is actually higher for education. Um but if you could turn your

education. Um but if you could turn your attention to China, I think that'd be really uh interesting to hear.

>> Right. I think uh more fundamentally uh the inequalities uh in the labor market.

Uh China has the whole system, right? Uh

so different areas have different income level or different wages. Uh there's

urban rural gap, there's a regional gap.

So as long as this uh gaps are there like education said it's just a way to allocate people to different uh locations right uh so as long as the

more fundamental gap is there education is just a tool of course education itself can be reformed like uh uh or to reduce students stress level to make it

more more equal then uh the hierarchy should be flattened basically China now has very clear hierarchy of colleges. In

the US, you wouldn't agree which college is the top college, right? You want me say Harvard, I miss Stanford, right? So,

but in US it's so clear that everyone knows there are top two and then top nine, top 10, top 20, top

40. It's clearly defined naturally. So

40. It's clearly defined naturally. So

uh so if we can flatten this a little bit uh then can they can both save resources, reduce stress and maybe increase efficiency but I still think

more fundamental reform should be in the hook system also the labor market reforms actually. H can you explain a

reforms actually. H can you explain a little bit more as to the reform of the hookco system and how it um relates to the educational inequality um because there is some fluidity in terms of

hookco people moving to the cities and um you know people moving out of the cities so how does it work with education >> right so sorry for for non-Chinese audience so so hook basically uh yes you

can migrate to a city to work there but your children cannot go to school in the local area so that's why if you for you you live in Sichuan, you go to uh

Guandong to to to work, your children normally be left behind in Sichuan rural area going to a local school. You are

not allowed to go to urban school in Guondong. So that's the issue. Uh also

Guondong. So that's the issue. Uh also

uh even you can work there you don't enjoy all all the benefit locally like uh medicine uh pension uh those kind of

things even housing. So uh with with this system it's very hard for people to permanent uh like migrate for the education system itself which we

mentioned that there's a cotton system actually if you are born in such you have you cannot take the the gau exam in Beijing or Shanghai any other places you

have to take your your local area but since different area has different cultism uh the degree of difficulty is different getting into college. So it's

much easier to get into college in Shanghai than in Sichuan.

>> Yeah, that makes sense. Um and uh so Raia coming back to you, you mentioned how the exam system in China is more of a selection system rather than an

education system. And um can you

education system. And um can you describe a little bit more? you talked

about the onepoint difference, how it could make a person's, you know, destiny going to the prestigious university versus going to a second tier university. Um, uh, it makes such a big

university. Um, uh, it makes such a big difference. But, um, can you flesh it

difference. But, um, can you flesh it out, uh, for us a little bit more what that means and what your research has found?

>> Yeah. First, Jennifer, can you hear me clearly?

>> Yes, I can hear you.

>> That's great because on my side, I say my network bandwidth is low, which is probably true, literally. [laughter]

Yeah. Okay. Good. Uh yes, I think the you know being a a exam system or actually so-called meritocracy it means

actually selection is crucial. What does

it mean? It's like you are ranked based on your exam performance. It's cared

more about your ultimate ranking less about what you have learned less about what value added uh education gives to you. You can think education could have

you. You can think education could have two functions. One is to select the

two functions. One is to select the people like select all these diligent and intelligent men and women.

Historically only only men now both men and women. And another function

and women. And another function important function is that once you select people you you educate them.

That's real education right you make them learn more and and later make them earn more right? So there are two functions of education and being exam

system it actually means that the the selection one matters a lot.

Historically there were basically no education right you learn yourself you get selected. Now it seems that oh you

get selected. Now it seems that oh you study in school you seem to learn things together but at least so far all the empirical evidence suggesting the selection function is very crucial. Just

use the example you gave. For instance,

we find that the two students, one is one lucky one, one point above, the other is unlucky one, one point below.

The idea these two people are very very similar in terms of ability or in terms of back even family background. It's

just by luck. It's one point above, one point below. By the way, the total

point below. By the way, the total points is 750. So one point doesn't make a big difference. But the fact that this

one lucky guy uh or or girl later earned much more then you you can see why right one thing could be he learned more which means the value added part is like a

more right he go to better school and he actually earned learned more and he get paid. We find no such evidence in

paid. We find no such evidence in whatever marriage one can come with. But

but why they still earn more is this what economists called signaling is that oh the employers they know that if you graduate from better school on average

they select the better people so I would pay you more as well because it's very difficult for employer to really know my own ability right so in this system then

why the degree matters so much and especially the first degree as you may know Jennifer there this first degree discrimination in China like my PhD

students at UCSD they still worried that oh they didn't graduate from Chinuan VA if they go back to China oh they will be discriminated [laughter] even though they have pretty good you

know UCSD is a is a good it's not Stanford but it's pretty good good school but they still worried and that's this is the same logic right because people still look at your first degree

and thinking that oh you were not you didn't perform well that means you were not good enough and that's the the whole logic I think the system you know this

is not necessarily bad from system perspective from the country's perspective suppose you select a lot of tal intelligent people and who are hardworking and that would be good for

the country as China has made all these achievements suggest the good side but there's this this this dark side in the sense it's put too much pressure on

families in terms of climbing this this ladder up in terms of being a bit higher ranked in the in the system right is also you wish that it's a bit more

relaxed so that average IQ person can get good education and a good life rather than pay so much attention to select you know the the so-called better

people based on this score so so it's a you know it's it's not it's more like this tension between individuals I think and the aggregate outcome Um and I think

China is you know it's more in the past when China was much poorer. Maybe this

makes sense. Again China has pretty developed you know has a resources.

Maybe it can think a little bit more how to improve the real education part a bit relaxed on the selection part because this system has been so good at selection. It's almost too good. So that

selection. It's almost too good. So that

it put all this pressure to families and and young people.

>> Yeah that's fascinating. So um one of the things that you know theorists have said and we've noticed um in other societies within China also is that um

as the society or the country develops becomes more economically um uh wealthy um uh the population starts to individual um there's a greater uh

momentum towards individualization and so you see this in sort of the rise of wellness programs in China psychotherapy uh consumers you know consuming being

things that show their sort of um you know charact characteristics, their personality. Um and you just described

personality. Um and you just described how the GACO system is very hierarchical. It's um rigid um and it's

hierarchical. It's um rigid um and it's more of like aggregate um achievements or aggregate kind of um accomplishments that the country can um take advantage

of. So um do you think the Ka will adapt

of. So um do you think the Ka will adapt over time? Do you see this in other

over time? Do you see this in other countries like Korea or Taiwan um Japan?

Um and how adaptable is it do you think?

>> Uh so uh I also saw some questions from the audience that uh so people just want want me to compare goal to SAT just to

let you know to go is like baby test. So

uh most Chinese uh middle schoolers can score full score in the math test for sure. So middle middle schooler. So for

sure. So middle middle schooler. So for

sure. Yeah. Uh so G is like a three-day test like seven seven subjects this is long three whole day test so very long test uh uh uh I think Jennifer's

question basically you ask whether China's uh system can can reform can change right of course they need need to be reformed need to be uh changed but

not fundamentally so the test will still be there because for this country uh people believe in this uh meritocratic system.

So if people society really buy in the system, you have to provide a transparent objective test to select people into different hierarchies. So

what China can do is basically what I said, you can flatten the hierarchy, right? You can uh maybe uh reduce the

right? You can uh maybe uh reduce the stress uh in school so that student can learn something outside uh their

individual interest could uh play out a little bit. Um which is important both

little bit. Um which is important both from efficient perspective or from also for human beings uh perspective. Uh so

this need to be changed but only slowly.

Uh any major change of the system may cause some political or social issue. uh

just let you know. So uh so this is very difficult to do completely uh changed but uh it does need some like small

reforms actually. Yeah.

reforms actually. Yeah.

>> Um so turning to audience questions actually um there's an important question about um innovation. So based

on your research um why do high performing students still overwhelmingly go into the state sector? Um and also what does this suggest in terms of China's future in innovation and also in

entrepreneurship which is very important for uh the tech competition uh talent competition that we're in right now

um for um wait >> yeah um I see this is first you know this as I said the system kind of

selected all these intelligent and diligent individuals but this system do has does has a problem with incentiv in incentives like what kind of people you

know these are this hardworking people but how do they spend their effort right uh so far on the one hand I would say on average if you measure the

entrepreneurship by say uh forms created by say college graduates it's not very low China performed pretty well uh and if you look at even I think innovators

or patents all these typical economic virus. China has been made a lot a lot

virus. China has been made a lot a lot of progress but I feel that China could still do much better if the incentive

could be back could be kind of reformed.

Currently it's true that the the talented people are still have incentive to go to the uh state sector which are typically less productive than the

private sector. uh and in day-to-day

private sector. uh and in day-to-day life right the incentive also matter like whether you want to challenge your leader and do some creative destruction or whether you spend your your effort

dining with your leader to develop the good relationship I think these are so it's not education per se it's education reflects the society and this society

has certain incentive structure that directed the effort and the talent of people uh so it could suppose the system could be reformed and improved proved

the China would do even better. That

would be my my answer.

>> So I just add one one point that when we talk about innovation we always think about the big uh technological improvement like creating an iPhone or a

EV car or electricity whatever but most innovations are done by like ordinary engineers in their workshop.

So like TSMC, Samsung, all those like innovative firms, right? Uh they have like like millions of patents maybe. So

when you have a lot of engineers work in the factory day in day out, they are going to have small innovations. The

most important innovation China does is to reduce cost of production.

So it's called process innovation which is very important. not creating really new product but make the product cheaper. I think this is uh the the

cheaper. I think this is uh the the reason why Chinese firm are so competitive by trade. They have so many mediums engineers they have really really small improvement to the

production process every day. So this I think is important for uh I think competition in the global market.

>> Yeah. I think the classic example is deepseek um >> right that's that's different. Yeah.

Yeah. Yeah,

>> they didn't created the first AI model, but they can they can do it quickly for long. Right.

long. Right.

>> Right. And cheaper. So, um you know, here's a really um basic question, but something that I think most people don't know. Can a student retake the Goko?

know. Can a student retake the Goko?

>> Yeah. Yeah, they can take it now. So,

they can but remember, you can only take once a year. So, you you if you skip one, you didn't do well, you can do it again, but take you a year. So,

>> so there Yeah, go ahead. Sure. I just

want to see in the data there are 20% of people who are repeated takers and this is another dimension of inequality as you can imagine it's typically you know

it's richer families can afford this repeated ticket and I can't help mention that historically this is a design to give hope to everyone you can repeat the

ticket anytime as you want so the legend always like oh there's three generations the father grandfather the father and the son take the exam together.

[laughter] >> Heaven forbid.

>> It's my design to give you hope.

>> Right. Right. I know in the imperial exam system, you know, there are people who took it for, I don't know, decades and finally passed and all that. So, I

didn't realize that was still true. Um

um so um in your own sort of um uh understanding and maybe just a quick uh reply to this um do you think that uh Chinese education system is uh meant to

sort of um I don't know has it been a way to catch up with the US in terms of its ability to compete economically or is it actually um a means by which it'll

be able to surpass the US um through its own you know through its own capabilities and strengths.

Uh so I do it first. So if you compare those two system they are very different. Uh each has its own advantage

different. Uh each has its own advantage and disadvantages. Uh apparently America

and disadvantages. Uh apparently America has the best colleges, best graduate programs in the world period, right? So

no country [clears throat] can compete against US. But I just read a New York

against US. But I just read a New York Times article like last month uh about US high school graduates called their college readiness. So basically can like

college readiness. So basically can like do basic math and then read article know the the central idea. So according to that standard so that study shows that

only about 30% of American high school graduates are ready for college. We also

know the graduate rate graduation rate for colleges in the US is low right because kids just are not ready for college they don't like college also

it's very expensive in China cost if you prepare for goal everyone is ready for college because you study basically 16

hours a day seven days a week and then 52 weeks a year so students study all year round so so they work really hard before taking the goal before they are

18 years old. So uh that's why people ask how they prepare they prepare really hard. So so they really have uh a good

hard. So so they really have uh a good basic education level just to let let you know. So so this basic education

you know. So so this basic education level is important for uh for industry revolution for manufacturer for

services. uh also through uh like a 12

services. uh also through uh like a 12 years schooling uh student disciplined we don't know we don't have any empirical evidence but we we suspect

that this kind of discipline uh in Asian countries might be the reason why there's the industry boom in all these countries

so I'll pick up >> I just would first say that the system was not designed for US China computation [laughter] it has a long

street was designed to govern in China.

So that's the main purpose. That said,

yes, of course, with the international relation and with geopolitics changing and the system is thinking right al the ruler of the system is thinking how to

use the system in this computation. I

think if it give the give you the structure of the incent uh the the system if it get the incentives correct it can perform very well. Uh as I said

you know it's like historically the ruler was never thinking about science and technology. So that's you know why

and technology. So that's you know why this all like we produce poets and this essay writers. Today the the ruler is

essay writers. Today the the ruler is thinking about science technology they will produce a lot of engineers and scientists. So it's once the incentive

scientists. So it's once the incentive is there the system is very effective at again at the aggregate and national level. However, at what cost for

level. However, at what cost for individuals and the families? I think

that's the thing I want to think uh you know a bit more right for the whole society. Then the society needs to think

society. Then the society needs to think a bit more. It's because this is a very costly system for families and and individuals. It's not a again I said

individuals. It's not a again I said it's not bad. It's pretty good in terms of the national level performance and could be even better with the competition with the US in the

background. That said, you know, it's

background. That said, you know, it's not necessarily a very ideal system from a welfare perspective,

>> right? Well, I uh u went to elementary

>> right? Well, I uh u went to elementary school in Korea and I have to say when I came to this country um math was extremely easy for a long time and so um

but um I encourage everyone to read the book and uh because we get a lot sort of um uh uh also an understanding of postra and hungbin and your your academic journey. So thank you very much. It was

journey. So thank you very much. It was

wonderful to have you here and um look forward to um talking more about your your work and your research in the in the years to come. Thank you, Jennifer.

>> Thank you.

>> Thanks.