The "China Dividend": What It Really Means Today?

Recently, in conversations with professors and students from Harvard Business School and the Harvard JFK School of Government, I found that many still view the “China dividend” through a lens shaped decades ago. Understandably, such outdated perceptions can no longer capture the full, complex reality of today’s China.

So, what does the “China dividend” really mean now? And where did some Westerners get it wrong? It’s a question worth unpacking, and at least four dimensions deserve closer attention. 

Labor Dividend: China’s First Surge

At the beginning of the reform and opening-up era, China’s primary advantage was its massive pool of low-cost labor. In an incredibly short time, the country became the world’s largest manufacturing base and kept its labor costs low for more than a decade.