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Monday, February 23, 2026

Review: The Highest Exam - How the Gaokao Shapes China

 Xiaoqin was reading The Highest Exam, and it migrated onto my kindle. Having recently read Breakneck, I decided to read the book, which was written by two academics rather than a commercial analyst.

The book is a deep dive on China's educational meritocracy, which is described by the authors as a hierarchical tournament. When they were growing up, you needed to pass an exam to get admitted to middle school, and then another exam to get into a high school (the exam also decides which high school you're admitted to based on how well you scored), and then finally, the Gaokao, the exam that decides whether you get into college, and if so, which college.

At the top of the pyramid are China’s most exclusive elite colleges, which receive priority over all other universities in government funding and resources. Only students whose exam scores are at the very top of the score distribution in each province can gain admission to these schools. Below the elite colleges are the remaining four-year universities. (kindle loc 177)

China's elite school take in less than 5% of the student population. Note that you do not apply to each individual school, you're assigned to a college based on your score at the Gaokao, with the 3 top universities (Peking, Tsinghua, and Fudan) being the most prestigious. The authors note that China's return on education for the general population going to college is 40% (i.e., someone who goes to college and graduates earns 40% more than someone who didn't get in), but the elite colleges net you an additional 40%. They pretend to be surprised that Chinese citizens are so devoted to doing well in exams when that additional gain doesn't seem to justify the 50% or more of income the poorer rural population spends on their children's education. They then note that it's not just monetary rewards, it's also prestige, access to government jobs (i.e., a chance to rise high in the political hierarchy), and social validation. The results of the Gaokao does follow you through your life. (One of the authors got a PhD in economics, and I'm shocked that he didn't just ascribe a value to the social prestige and opportunity and realize that it probably stacks another 40% on top of the monetary values he ascribes)

There are a few minor surprises. For instance:

China’s high school students perform better than those of any other country on measures like critical thinking, reading, and math. But during their four years in college, evidence indicates that the skills of the average student in China stagnate, or perhaps even decline. (kindle loc 209)

This shouldn't surprise anyone. The current tenured professors are probably from pre-Deng China, and so might not be as up to date as the newer batch of professors who are returning from overseas. I wouldn't be surprised if this metric reverses in the next few decades as older professors retire and are replaced by younger, internationally competitive scholars.

The authors also note that China's version of DEI is to give minorities an automatic, 10 point bonus to their exam scores. This is huge, because at the cut off (e.g., between elite universities and their fellows, or between going to college and not), the difference between getting in or not getting in might be a single point. Despite that, you will not hear Chinese people complaining, because that bonus is transparent and accepted, though members of minority tribes that are too big to qualify of the bonus are at pains to point it out to their classmates, so as to avoid the stigma of being a DEI entry.

The authors posit that this gaokao system is a form of population control. Basically, if the common people are competing against each other (and given that it's a hierarchical tournament, you're competing with people you know --- your neighbors and community, and you know people before you who've won the tournament and went on to have a great life), they're not going to band together to protest for personal liberties or complain about corruption elsewhere in the system.

I don't buy this argument at all. The reason is because the rest of the world use very similar systems to determine how to allocate scarce resources to students! In India, admissions to the IIT is through a competitive exam, and just like in China, your admissions is based entirely on that score. No essays, recommendations or extra-curricular actives matter. OK, maybe India is just as corrupt as China in its other institutions. Guess what, the UK also use the GCE "O" levels (to gate entry into high school), and "A" levels (to gate entry to college) as well. Their top Universities even have their own exams as the grades at the "A" levels are way too granular to distinguish the very cream of the crop that they have room to admit. Singapore and Taiwan use very similar system. In Singapore, even going from first grade to second grade is gated by an exam that then sorts the students into varying classes of similar ability. When you have 40 kids per class and limited resources, this is the only way to go, since it makes the teachers' jobs way easier when everyone in class has similar ability and you're not neglecting the high performers to deal with the disruptive kid coming from a broken family. And yes, it leads to a "rich get richer" society, but on the other hand, it's not a bad thing to have all the disruptive kids disrupt each other from learning instead of disrupting the learning of your best talent.

It is only the Americans that have created the most corrupt of ways to do college admissions, and to do so in such a way as to anger everyone in society by making it non-transparent, beholden to wealthy people who can buy their way in, and worse, degrading the value of their own degrees because once you've admitted a legacy student who's paying $100k/year, you cannot flunk him out. And once you cannot flunk that high paying student you can no longer flunk anyone out, even the least prepared students. The end result is that 1 in 8 freshmen at UCSD cannot do 8th grade level math. This helps no one but managers to make everyone (including myself) really angry. Once in a while you get some crazy article written in The Atlantic or The New York Times by some high level academic claiming that meritocracy doesn't work, and that it leads to inequity, but the dirty little secret is that Americans have never tried meritocracy, don't know how other countries do it (and do it correctly), and those statements written by academics don't count because college professors do not get involved in undergraduate admissions! Undergraduate admissions are done by a department that's not composed of academics, don't care about academics, and by and large do not come from STEM fields. An entertaining personal essay that's largely fiction will not get fact checked by people in the admissions departments!

In this book, the authors point out way after way the Gaokao system is unfair: poor rural schools are under funded and don't have great teachers, poor students cannot afford to take the exam multiple times, urban students (particularly in Beijing and Shanghai) get more spots allocated to them at top schools. But even at the end they admit that no matter how unfair the Gaokao system is, it's a lot less unfair than the American system --- every year there are always rural students who do win their tournaments and make it into a top school, and they beat the cut-off scores not by a little, but by a lot!

In any case, I found the book worth reading, but the authors just aren't familiar enough with how other non US non China countries do admissions for their opinions to be worth 2 US cents or 2 renminbi.

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