china puzzle 16 aug 2020
TALKING POINT, BY DR STEPHEN DAVIES
Last week Syed Kamall and I published a joint paper on the approach that the UK and other Western countries should take towards the Chinese state, in the aftermath of Covid-19. There is clearly a significant cooling of relations going on, in response to the increasingly aggressive behaviour of Beijing and the way it handled the initial onset of the virus, and many fear, or hope, that this will lead to a second Cold War with the CPR.
We argued that this would be mistaken and costly and rested upon a mistaken idea of the goals and motives of the Chinese leadership, but also that a business-as-usual approach was not sustainable. We proposed a third path – of some economic engagement, but combined with action by civil society and private bodies to develop contacts with people within China who opposed the regime and to support them.
Summary ● Covid–19 is provoking a major reorientation of the foreign policy of the US and Europe. At the heart of this is their changing relationship with China. ● Before the Coronavirus there were concerns over the actions of the Chinese government, but the pandemic has given rise to fears of a new Cold War. ● These fears are based on out-of-date assumptions and a misunderstanding of China’s motivations: unlike the USSR it does not seek hegemony, nor to evangelise and export its political and economic system. Rather it acts out of self-interest and seeks to become both a model nation for developing countries to emulate and the dominant rule setter in the international trade and financial system. ● The strategy of constructive engagement or liberal internationalism is no longer working – but a more confrontational relationship with China could be economically costly and politically dangerous. ● There is an alternative to simple confrontation and military competition, one that could be more effective in promoting the goal of a freer and more peaceful world. ● The West may have to restrain sensitive trade and respond robustly to the Chinese government’s actions in Xinjiang, Hong Kong and against Asian neighbours. However, this approach could be supplemented with a programme of engagement between private individuals, organisations and firms in free societies with their counterparts in China. ● A strategy of organising more contact at a civil society level could lead to social and cultural changes that China’s current rulers will have to go along with or find much less easy to manage. 5 Introduction Covid–19 has done more than cause a medical and
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On Thursday the IEA published my paper on the way forward for the UK’s university system given the funding crisis brought about by the pandemic.
'To a radical degree' argues that financially distressed institutions should not be bailed out. Things like rescues and mergers should not be used to produce a slimmed down system that is more focused on STEM. Instead we should take the opportunity to rethink HE policy pursued by governments of both parties since the mid-1980s, and move to a much more pluralistic and varied system. Above all, there is a need to break the link between having a degree and access to high paid or high-status jobs.
The paper was released to time with A-level results which, it would be fair to say, have been a monumental shambles. The despair and angst on display emphasises the point of the paper: why do so many people think that their entire life prospects or those of their children depend on getting into university at 18 (or, even worse, a particular university)? As a society, we need to rethink this. I discussed the findings of the paper in a video, and wrote articles for City AM and the IEA blog.
Dr Stephen Davies
Head of Education, Institute of Economic Affairs
Summary
- Covid-19 is bursting the bubble in universities and higher education (HE), exposing the fundamentally unsound nature of the policy of successive governments and of the entire array of HE institutions.
- Many institutions were in a weak financial position prior to the pandemic. They are now facing a massive cash-flow crisis.
- The present difficulties could lead to a permanent fall in demand for places in HE. The pandemic has crystallised pre-existing concerns that there is something awry with the product and service universities offer, and the way the system is run and financed.
- UK HE policy has been heading in the wrong direction since the mid 1980s. The government is using the current interruption as an opportunity for a fundamental rethink.
- There is no evidence that the UK’s economic performance has been elevated by the expansion in the number of graduates.
- The good being supplied by HE institutions is the signal a degree will send to prospective employers. As a result, the sort of competition that we see in other markets – of price competition, product variation and price differentiation – has been significantly impaired. It has led to overextension, increasing financial fragility and a system which fails to meet labour market needs.
- These problems cannot be resolved by a continuation or expansion of previous policies; instead wholesale reform may be required. Different kinds of institutions could be recognised and encouraged, and they could be organised in different ways, with different kinds of funding and different missions.
- If calls for a bailout are resisted, universities will not be able to continue as before. Moving their funding out of current government spending could give them greater independence and responsibility.
- Ultimately, there is a case for stopping the use of HE as a validation device for employers. Alternative, lower-cost methods could be adopted to certify the qualities and abilities that a degree currently signals. HE could be thought of as a good that can be valuable and enjoyed at any stage in life, and not for an (often spurious) supposed financial benefit.
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