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Misinterpreting PISA Scores

The results of the OECD’s Program for International Student Assessment (PISA) generated their usual ration of hand-wringing.  They deserve a second look.

Differences in how the tests are given complicate interpretation of PISA scores, and some countries have in the past done things to give their scores an upward nudge.  This time, PISA decided to provide scores for China-Shanghai rather than for all of China.  This is like only using scores from high income suburbs in the US.

The US scored 14th in reading, 17th in science and 25th in math, but if we remove countries with small populations or extraneous slices like Shanghai, the US is better seen as ranking in the top five.  Of the tested countries with more than 100 million in population, the US ranks second, behind only Japan.  Of the countries that are likely to shape international relations in the future – Brazil, China, India, the U.S., only the US  and Brazil participated, and the US scored significantly higher than Brazil in every category.  The correlation between PISA and economic performance deserves a second look as well.  Japan, whose economy flatlined in 1990 and has

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China’s Mobile Payments Market Expected to Become World’s Largest by 2013; Government’s Role Cited

A new report from research firm Celent finds that China is likely to become the world’s largest mobile payments market by 2013. The country’s mobile payments market is expected to grow 48 percent year-on-year to 410 million mobile users by 2013. The growth is in both remote payments (e.g. fund transfers and remittances through the mobile phone) and contactless mobile payments (e.g. using near-field communications technology to effect payment at subway turn styles, vending machines, or point of sale terminals in convenience stores or retailers). China is expected to have 400 million users of contactless mobile payments alone by 2015.

Celent’s report, echoing conclusions from ITIF’s own report, Explaining International Leadership in Contactless Mobile Payments, about how Japan and South Korea came to be at the world-frontier for contactless mobile payments, finds that government has played a key role in convening and catalyzing the development of China’s contactless mobile payments ecosystem. The report notes the huge potential for mobile payments in markets that have government support, close cooperation between financial institutions and mobile operators, high mobile phone penetration, and (in emerging countries’ cases) low bank card penetration. The report

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U.S.-China Economic and Security Review Commission Issues 2010 Annual Report

The U.S.-China Economic and Security Review Commission released its 2010 Annual Report this morning, issuing stark findings that the Chinese government continues to pursue a mercantilist-based export-led economic growth strategy, with an intentionally undervalued currency at its core, while continuing to fail to meet the promises made as part of its accession to the WTO. The Commission’s report echoes many of the arguments ITIF made about China’s and other countries’ mercantilist technology export-led economic growth strategies in a report called The Good, The Bad, The Ugly, and The Self-Destructive of Innovation Policy.

The Commission reports that continuing problems with China’s implementations of its WTO commitments, “Can be traced to China’s pursuit of trade-distorting government intervention intended to promote China’s domestic industries and protect them from international competition.”  The report continues, “China has failed in some notable areas to fulfill the promises it made nine years ago when it joined the WTO. Specifically, China is adopting a highly discriminatory policy of favoring domestic producers over foreign manufacturers. Under the guise of fostering ‘indigenous innovation’ in its economy, the government of China appears determined to exclude foreigners from bidding on government

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