China's Transition to a Human Capital Economy

The NY Times has published an interesting piece about the rise of Chinese Tech companies.   For decades, China was known to "borrow" Western technology but now this large nation is becoming a producer of intellectual property and I have argued that this will lead this nation to enforce intellectual property laws.

As China has invested in its own universities and sent millions of young people to study at Western Universities, the nation's stock of human capital has increased.   In our 2016 Princeton Press book, Siqi Zheng and I argue that the rise of the human capital economy in China has two effects.

On the demand side, more educated people are richer and more sophisticated and more patient and they demand blue skies.  The brain functions better in a low pollution setting.

On the supply side, such "high tech" people work in jobs that are not threatened by environmental regulation.  These two forces together lead to the coastal sophisticated cities in China to be tightening pollution regulations.  

Now, what about the low skilled?   They continue to face Faustian Bargain and do prefer a coal mining job and pollution to no job and less pollution but this activity moves to the poorer parts of the nation.

If you want to see more details,  read this, this and this.