NN38, February 2007
Technical and Vocational Skills Development
ASIAN DEVELOPMENT BANK (ADB) TECHNICAL ASSISTANCE TO THE PEOPLE?S REPUBLIC OF CHINA ON TECHNICAL AND VOCATIONAL EDUCATION AND TRAINING DEVELOPMENT
By Chris Spohr, ADB Beijing and Lan Wu, ADB Headquarters
KeywordsADB, China, PRC, TVET, technical assistance
Summary
China?s Eleventh Five-Year Plan for Economic and Social Development (2006?2010) accords high strategic priority to developing technical and vocational education and training (TVET) to address the severe shortage of skilled workers in order to maintain high economic growth. Improved TVET will also help to address the skill and employment related issues raised by massive rural?urban migration. Technical assistance for TVET from the Asian Development Bank (ADB) is discussed.
****
Context and Key Issues
Following nearly 3 decades of maintained rapid economic growth, as the People?s Republic of China (PRC) embarks on its Eleventh Five-Year Plan (EFYP) for Economic and Social Development (2006?2010), the nation is at a key crossroads in maintaining growth and achieving a ?harmonious society?, a central objective of the EFYP. This will require addressing a range of medium and long-term economic and social development issues, including substantial gaps and imbalances. Within this context, the PRC Government accords high strategic priority to developing technical and vocational education and training (TVET), which can yield significant social and economic benefits.
Strengthening TVET will be critical to addressing the severe shortage of skilled workers in the PRC. Nationally, only about 33% of all urban employed are skilled labourers, with highly skilled workers/technicians accounting for less than 4%. Moving up the skills ladder from lower-end manufacturing and processing to high value-added industries is crucial for firms to achieve competitiveness, and many firms in key areas are suffering from severe shortages of skilled workers. More broadly, increasing the number of skilled workers is essential for the PRC to sustain high economic growth.
Improved TVET will help correct structural skills mismatches in the labour market. While severe skills shortages exist, it is estimated that between one quarter and one third of tertiary graduates and several million secondary school graduates cannot find jobs upon graduation each year. This indicates a serious mismatch between labour market demand and supply. Making the TVET system more sensitive and responsive to labour market needs, and strengthening links between TVET and the private sector are essential measures to mitigate this mismatch.
Improved TVET will also help to address the skill and employment related issues raised by massive rural?urban migration. Over 200 million surplus labourers have migrated from rural to urban areas, most with limited readily employable skills. Rural?urban migration is expected to continue at a rate of about 10 million a year for the EFYP period and beyond. A strengthened TVET system can play a vital role in enabling migrant workers to find better jobs with higher and more stable income, as well as contributing to a more orderly and effective process of rural?urban migration and urbanization.
The existing TVET system in the PRC falls short of addressing these key issues and producing the significant economic and social outcomes required to meet the country?s medium and long-term development needs. Key constraints include:
* Inefficient TVET system?while acute skills shortages exist, what is taught and learned in TVET institutions often does not meet labour market needs;
* Resource Gaps?existing TVET capacity is unable to meet the PRC?s present and future needs for skills because of years of underinvestment. The PRC has an estimated total training capacity equivalent to only 10% of its total number of workers, against 30?40% in many advanced economies, in part due to under-funding;
* Weak Public-Private Partnerships in TVET?while the private sector is active in providing short-term skills and vocational training, its overall role in TVET needs to be expanded and qualitatively strengthened; and
* Migrant Workers? Lack of Job and Income Opportunities. The generally low level of migrant workers? skills?only about 20% of migrant workers currently receive any training and most is very basic (as short as 15 days)?is a key reason why most migrant workers remain in a few low-skilled industries with little prospect of upward mobility, and is an underlying cause of many social issues relating to migrant workers in urban areas.
Asian Development Bank (ADB) Technical Assistance (TA)
Following a request from the PRC Government and project design dialogue, in November 2006, the Asian Development Bank (ADB) approved technical assistance TA 4868-PRC: Technical and Vocational Education and Training Development. Focused on Guangdong and Hunan provinces, as case studies, the TA links to additional recently approved TA on employment services for migrant workers (ADB, 2006) and related policy dialogue.
The targeted longer-term impact of the TA is an effective TVET system to support employment and labour markets in the PRC. The outcome targeted for achievement by TA completion will be the consideration by higher authorities of central and selected provincial governments of key policy recommendations for improving and strengthening TVET.
The TA will review TVET in two provinces: (i) Guangdong, a key industrial province heavily reliant on migrant labour, and (ii) Hunan, a less developed central province that serves as a source of migrant workers. Based on provincial case studies and broader research and analysis (including a review of relevant international experience), TA outputs will include:
* key policy recommendations formulated on measures and mechanisms for improving TVET for Guangdong and Hunan provinces, some of which will have wider applicability in the PRC; and
* a publication on key TA findings and recommendations.
Policy measures and mechanisms identified for implementation will be costed and prioritized, and key TA findings will be widely disseminated among stakeholders and the general public.
The TA is expected to be implemented during January-September 2007. The Bureau of Finance (BOF) of Guangdong Province will be the Executing Agency of the TA, responsible for the overall execution and coordination of TA activities. Hunan Province BOF will be responsible for TA activities to be carried out in Hunan, as TA Implementing Agency.
Reference
ADB (2006) Technical Assistance to the People?s Republic of China for Employment Services for Migrant Workers, ADB: Manila.
Back to full contents of NORRAG NEW 38.
Download the full issue of NORRAG NEWS 38 in pdf.