So giving a large swath of your population more education doesn't magically stimulate economic growth. Hm, where have we seen this pattern before?
With this goal in mind, the education system should be taylored for basic sciences, and not on "practical" skills that could be learnt on the job. This would naturally gravitate the ciruculum towards teaching creativity, problem solving, not knowledge aquisition.
TLDR; i think they've been doing it all wrong, and wasted the time "educating" these now jobless people.
See Joseph Tainter and Nicholas Rescher. http://onlinelibrary.wiley.com/doi/10.1002/sres.1057/abstrac...
For the Chinese: much of what they need has already been invented elsewhere (so IP appropriation _is_ a highly rational activity). They need to be able to apply it.
Their bigger problem is going to be in providing energy, cleaning up pollution, and assuring other resources (water is also becoming very highly constrained in China) for a very large population. One that's much _less_ large than it could have been, but large all the same.