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One Exam… An Entire Economy: What China’s Experience Teaches Us

By Prof. Khalid Wassef Al-Wazani
Professor of Economics and Public Policy
Mohammed Bin Rashid School of Government
In is thoughtful and high-quality monthly review of influential books, the Journal of Economic Literature, published by the American Economic Association (AEA), recently presented an insightful analysis of a book that explores how China’s national college entrance examination—the Gaokao—shapes the country’s economic future. The book, “The Highest Exam: How the Gaokao Shapes China”, argues that in a world where competition for knowledge and skills is accelerating, education is no longer merely an individual pathway, but a strategic instrument through which nations shape their economic trajectories. Within this framework, China’s Gaokao system emerges as a unique model, demonstrating how a single educational mechanism can reshape both society and the economy. The Gaokao is far more than a standardized test; it is a decisive gateway that determines the future of millions of students. Each year, more than 13 million candidates sit for the exam, and success in it is the sole determinant of university admission. This intense focus effectively aligns the entire secondary education system around one objective: preparing students to succeed in this examination.
More importantly, however, this system produces not only graduates, but what may be described as strategic and knowledge-based human capital. As the book highlights, success in the Gaokao translates not only into access to higher education, but also into long-term professional, social, and intellectual trajectories. It opens doors to prestigious careers, influential networks, and a range of indirect benefits that extend to housing, public services, and social mobility. These “hidden returns” to education help explain the exceptionally high levels of investment by Chinese families in their children’s education, even when income returns appear comparable to those in other countries. The issue, therefore, extends beyond financial returns to encompass an individual’s position within the broader economic and social structure.
The key lesson here is not whether this model should be adopted or rejected, but what it reveals. Countries that succeed in the twenty-first century are those that treat education as an integrated system for producing knowledge and skills, not merely as a stage of formal schooling. Today’s world is defined by capabilities and competencies, not by credentials alone. In this context, a fundamental question arises for education policy in the Arab region: do our systems have the capacity to produce strategic human capital aligned with the knowledge and skills required for the future economy? Or do they continue to generate outputs that fall short of even the basic demands of rapidly evolving economic, social, technological, and knowledge-based transformations? The answer does not lie in replicating the Chinese model, but in developing a context-specific Arab model, one that balances efficiency with flexibility, measurement with diversity, and equity with excellence. Ultimately, it may not be the exam itself that shapes the economy, but rather the way education systems are designed. And in that design lies the blueprint for the kind of economy, and society, that nations will build.
Prof. Khalid W. Al Wazani