Co‐evolution between economic growth, educational development, and urbanization in china: The triggering role of Informatization

Summary China's economic growth has been remarkable since the economic reform started in 1978. It has incorporated transitional processes to its long‐lasting institutional system, which include the shift to a market economy, rapid industrialization, and urbanization, as well as the dramatic reforms of its educational system. While there is ongoing debate whether such economic performance is driven chiefly by productivity growth or by factor accumulation, there have been studies, nonetheless few, that have taken institutional factors and informatization into account. While the current low levels of human resources and urbanization have impeded China's development, the conspicuous development of education and urbanization over the last two decades could become the primary institutional factors for the acceleration of future economic growth. The Chinese government's comprehensive informatization strategy is considered to be the accelerating factor of education and urbanization, leading to a virtuous cycle between economic growth and further advancement of informatization. This paper attempts an empirical analysis with the aim of substantiating the hypothetical view cited above. Likewise, the role of the information and communication technology (ICT) in constructing the virtuous circle is analyzed. The analysis is done by taking into consideration the relationship between China's development with respect to its economy, education, and urbanization, and the country's advancement in ICT in thirty‐one regions over the last two decades.