Off Target: China's Vocational Education and Training System

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Off target: China’s vocational education and training system threatens the country’s rise to industrial superpower status Lack of practical relevance in vocational training. State prescribed commitment from companies. New impulses for German-Chinese cooperation. by Elena Klorer and Matthias Stepan is insufficient coordination with Chinese companies and their lack of com- KEY FINDINGS AND CONCLUSIONS mitment.  Vocational education and training (VET) is the Achilles' heel of the  The Chinese central government wants to enhance the quality and the restructuring of the Chinese economic model. With the “Made in China social recognition of VET. The aim is to improve mobility between univer- 2025” strategy, China wants to transform into an innovation-driven industrial sity studies and higher vocational training. nation. This can only be achieved with a highly qualified workforce.  China’s skills shortage also has a direct impact on the German economy. For the installation, maintenance and servicing of German industrial  Reform of the VET system is long overdue. Only if China succeeds in and consumer goods, highly-qualified Chinese skilled workers are needed. establishing a system that can be adapted to the changing requirements of The shortage of such skilled workers is already one of the biggest challeng- companies will the dream of its political leaders to make the country an in- es facing German companies in China. If production in China succeeds in dustrial superpower materialise. climbing up the value chain, new markets will be created for German (high-  The education system is not aligned with the demands of the labour tech) products as well. market. At the same time that university graduates are not able to find any  The German dual VET model has an outstanding reputation in China. suitable jobs, many industrial sectors are experiencing the first signs of a The establishment of quality standards for vocational training in China in- critical skills shortage. spired by the German example would not only benefit the Chinese VET sys-  VET programmes focused on acquiring practical skills could provide relief. tem, it would also provide German industrial and educational enterprises However, China’s VET system is in a dire state. The main reason for this with advantages over competitors in the Chinese market.

1 Skills shortage poses a threat to China as a core element of the action plan is the modernisa- nies producing high-tech machines and systems location for industrial production tion of industry through advanced information or highly developed intermediates like those technologies (IT) under the heading of “Intelligent made by speciality chemicals companies. The time when China was a low-wage country is Production” (智能制造). This will result in the job long gone. Production and non-wage labour costs are rising. China’s competitive model as profile of a worker employed in the industry and Overview 1: The skills shortage is one of the big- the world’s “extended workbench” has reached service sector changing substantially. Demand gest challenges for German companies in China an end. In order to become an advanced indus- for IT knowledge, independent problem-solving (Source: AHK Business Confidence Survey 2015, trialised nation, the Chinese government needs abilities and systematic thinking will increase 2014). Data relating to the companies participating in to restructure the economic system. China’s vi- sharply. the survey given in per cent. sion for its future economic model is to excel in the manufacturing of high-quality and advanced China’s skills shortage technological products, as well as to possess an also has an impact on the effective service sector. In order for this to suc- German economy. China ceed China needs a considerable quantity of is one of the main mar- skilled workers. But in fact, there is a lack of kets for German products. them, especially in strategic key industry sectors The installation, servicing like information technology (IT), the chemical and maintenance of Ger- industry and rail transport.i man systems and machines require well- China wants to become an “industrial super- trained specialists. The same also applies to consumer goods like cars power”: In mid-May 2015 the State Council pub- Vocational training is the Achilles' heel of the which need maintenance. In particular, German lished a strategy paper which outlined China’s restructuring of the Chinese economic model. path to becoming an “industrial superpower” (工 companies based in China are directly affected by the skills shortage. For some time now com- Without an adequate number of skilled workers 业强国) by 2049. The action plan “Made in China panies have stated that finding and retaining this process is doomed to fail. The related risk of 2025” (中国制造 2025) lists specific measures and qualified skilled workers is one of their greatest a massive slump in China would have far- aims for the first milestone in 2025.ii By then Chi- challenges.iii With adequately trained staff China reaching consequences not only for Germany, na’s manufacturing industry should have reduced could in future establish industrial sectors that the gap to established industrial nations with but also for the entire global economy. The Chi- also open up new markets for German compa- respect to innovation, quality and efficiency. A nese government has recognised the problem

and wants to counter the skills shortage with a level of education. Nevertheless, the chances of skilled workers. Unskilled workers had been per- significant strengthening of vocational training. finding jobs relevant to their degrees are consid- fectly satisfactory for jobs in factories. Now there The plan is to build up a modern VET system by erably worse. Whilst many of the graduates from is need for a radical turnaround. The number of 2020. For Germany the question is how involved elite universities find it relatively easy to gain unskilled workers being replaced by industrial vi it wants to be in this process. Compared with the access to the labour market, the majority of robots is increasing rapidly. graduates have to make significant compromises start of German-Chinese cooperation in the area with respect to their job expectations or may Up to now companies were hardly involved in of vocational training in the early 1980s, the fo- even end up unemployed. Despite the clear sur- apprenticeships. Vocational schools and col- cus of the political debate today has shifted more plus of qualified academics without practical ex- leges have been the main pillars of the VET to economic questions regarding competitiveness perience and, at the same time, the shortage of system. In contrast to the situation in Germany, and markets. qualified skilled workers, both pupils and parents companies, industry associations and trade un- continue to prefer university education to voca- ions have a minor role in the governance of VET. 2 Education not meeting the requirements tional training. In 2014 only 5.7 million Chinese In light of the great employee fluctuations, many obtained degrees from vocational secondary companies show little interest in increasing in- Currently China’s education system does not colleges.v Along with general vocational colleges volvement in this area. They criticise the high promote the abilities that are needed for an inno- at secondary level this also includes technical costs associated with the training of vocational vation-driven economic system. Equally, not colleges. This can be largely ascribed to the bad apprentices. Furthermore, there is no guarantee enough skilled workers are being trained. Instead reputation of vocational training in China. that apprentices will remain with the company in of looking at the demands of the labour market, the long term. Instead of participating in voca- the education system has predominantly focused 3 China’s vocational education and training tional training, companies prefer to provide fur- on academic studies (see graphic “Not meeting system is inadequate ther training targeted at the specific jobs workers the requirements“). This is also reflected in socie- undertake for the company. tal attitudes. It is the aim of every pupil and their In many areas China‘s VET system is in a dire parents to be accepted by one of the elite univer- state. In society it is regarded as a fallback for As a result there is a lack of practical rele- sities. Memorisation and knowledge testing are those who failed their exams and a second-class vance in vocational training. In most cases an key elements in making it to the top. This sum- education. For many years, vocational training industrial work placement is the only contact mer a record figure of nearly 7.5 million higher was politically and financially neglected in favour point between companies and vocational colleg- education graduates are seeking their first jobs.iv of university expansion. When it was the “world’s es.vii And even during these placements it is rare No generation before has attained such a high extended workbench” China had little need for that any mentoring or guidance is provided. In-

stead vocational apprentices are frequently given contribution made by German companies in  A more active role for companies. In order only simple tasks to perform. This makes it diffi- modernising vocational training in China. The to provide vocational training with a much cult to acquire any noteworthy practical qualifica- AHK had tested, together with the Chien Shiung greater emphasis on practical experience, the tions. The lack of practical relevance also be- Institute in the city of Taicang, a practice- intention is to have more than 80 per cent of comes apparent when looking at the facilities orientated apprenticeship training model.ix large- and medium-sized enterprises enter in- offered by vocational colleges and the teaching to official cooperation agreements with voca- staff. Here there are great disparities. Some col- 4 The Chinese government wants to tional schools and colleges. State-owned en- leges have antiquated machines that are no strengthen vocational training terprises are a particular target group. So far longer used by any companies. Other colleges the exact form of the cooperation has not have machines that meet the current industry In order for China to become a technology-driven been determined. Amongst other things it standards but often don’t have qualified teaching industrial power it is necessary that the country could mean work placements for students or further training of teaching staff. Companies staff that are familiar with their operation. In 2012 increases investment in apprenticeships and the are obliged to document their activities in so- only 35 per cent of teachers had industrial expe- further training of skilled workers. According to called Corporate Social Responsibility Re- rience.viii the action plan published in 2014, China’s gov- ports. In return they will receive tax relief.xi

ernment wants to create a modern, demand-  Privatisation measures for diversification Nevertheless there are also some very suc- orientated VET system by 2020.x and expansion of service range. Next to cessful vocational colleges. They are often In the drafting of the reforms, China has essen- state-run vocational colleges a concerted fort located in China’s economically advanced is to be made to create private vocational col- coastal regions, and there are also cooperation tially followed international models. The German leges and expand the range of services in the projects between international corporations and vocational training model is highly respected. But education sector. The government gives new Chinese vocational colleges. An example of such other countries like Australia and the United incentives to education providers in economi- cooperation is the dual training at the Jinan Kingdom are also regarded as reference models. cally underdeveloped regions. Vocational College, in which several German However, China doesn’t aim to wholly adopt a  More freedom for local governments medium-sized enterprises are involved. Appren- specific model. Instead the government is picking tices receive comprehensive practice-orientated In particular, provincial governments re- out certain elements in order to modernise the vocational training and leave with a degree that is ceive greater powers to adjust the range Chinese system. widely acknowledged by employers. The award- of training courses offered by vocational ing of the “National State Prize for Educational colleges in order to meet the requirements xii Performance“ to the AHK Shanghai underlines The Chinese government is particularly fo- of local companies and enterprises. How- the Chinese government’s recognition of the cused on five areas: ever, the central government will retain

responsibility for general inter-ministerial measures are vaguely worded and don’t address Chinese system will not be able to offer high- coordination, which amongst other things the fundamental problems. quality vocational training across company will determine job profiles and standards for boundaries. There is a clear need to give com- course content. The government primarily sees companies as panies a voice in this area. The project Sino-  Vocational colleges as focal point for fur- executing entities. Companies will still not have German Automotive Vocational Education ther education and training opportunities. much influence over course content and job pro- (SGAVE) demonstrates impressively the positive China has never possessed a systematic fur- files.xv For this reason the system lacks the flexi- contribution that can be achieved through coop- ther education market for specific skilled qual- bility needed to react to short-term changing eration amongst competitors. ifications. xiii In light of the structural change economic requirements. In light of the dramatic and progressing automation in production, the changes in economic structures China needs demand for continued further education and exactly this adaptability. The Chinese system will training is rising. in future still not able to provide flexible coordina-  Equal treatment of higher vocational train- tion of the vocational college courses with the ing with university studies. Presently trans- needs of the labour market. fers from a vocational training colleges to universities are almost impossible. With the in- Standard setting and quality management in troduction of Universities of Applied Sciences, vocational training remain problematic. Sup- higher vocational training is to be put on an port of vocational training by large corporations equal footing with university studies. xiv and privatisation measures won’t provide a sys- Bachelor’s degrees at such institutes are to temic improvement. This is especially a disad- provide access to master’s programmes at vantage to small- and medium-sized private en- universities. terprises that, due to their size and financial re-

sources, are not able to enter into cooperation 5 The reform proposals don’t tackle the actual agreements with vocational colleges. The in- problems creasing diversification complicates the necessary quality management. As long as the gov- The reform proposals clearly highlight the weak- ernment continues to determine quality standards nesses in vocational training. However, the for apprenticeship courses without adapting their content to meet the current needs of industry, the

6 Strategies and courses of action ticeships than the domestic Chinese competition and to guarantee uniform quality standards,

The reforms of the Chinese vocational system in German companies should look increasingly at Info box 1: conjunction with structural economic reforms working together in the area of vocational train- Sino-German Automotive Vocational Educa- open up new opportunities and operating areas ing. tion (SGAVE) was established in 2011 as a for German stakeholders. At the beginning of the cooperation project between the Ministry of 1980s Germany was the first cooperation partner German education providers should coordi- Education of the People’s Republic of China, for China in the area of vocational training. Foun- nate their activities better in order to systemati- the Deutsche Gesellschaft für Internationale dations, chambers and companies have in the cally exert influence on the shaping of the Chi- Zusammenarbeit (GIZ) on behalf of the meantime been actively involved in China’s edu- nese VET system. Education providers and pro- German Federal Ministry for Economic Co- cation sector for more than three decades.xvi The jects supported by German industry should focus operation and Development (BMZ) and five environment for cooperation has changed fun- on the development and quality management of German car manufacturers. It has signifi- damentally in the meantime. China is no longer a apprenticeship courses that help in the long cantly contributed to the standardisation and developing country but the second biggest econ- term to secure sales markets in China for qualitative improvement of the automotive products “Made in Germany”. In particular, mechatronics engineer apprenticeship. omy in the world and Germany’s third most im- there are opportunities to expand German- portant trading partner. This new relationship should also be reflected in the education ex- Chinese cooperation in areas that the Chinese Despite formal equality, vocational education change. For German stakeholders this means: government is looking to strategically support. will continue for some time to be seen only as German companies producing in China a second choice. The introduction of Universi- Beyond this, education providers should increase should look to cooperate more with each oth- ties for Applied Sciences doesn’t necessarily lead their focus on new cooperation options in the er with regard to questions concerning the to qualitative improvement or a better reputation area of further education and training. De- training of skilled workers. The timeframe for for vocational training within Chinese society. In mand will continue to rise in line with the trans- competition for talents and skilled workers has fact, the objective is to enable general mobility formation of the economic system. also shifted. In future it will take place before the between the systems of academic and vocational start rather than on completion of the apprentice- training from secondary level onwards in order to The German government should politically ship. Under pressure from the Chinese govern- avoid stigmatising vocational training from the support the cooperation initiatives in the area ment, Chinese state-owned enterprises in partic- outset as a second class education option. of vocational training. It should continue to ular will be more active in relation to vocational provide assistance for existing platforms of coor- training. In order to offer more attractive appren- dination and information exchange between

German education providers in China. Particular- Chinese economic reforms. The repercussions of ly in the area of quality management, German failure would also seriously affect the German approaches are globally highly regarded and can economy. If industrial production in China is able Editor: Kerstin Lohse-Friedrich make a valuable contribution in China. The ex- to climb the value chain, however, significant Contact person for this China Monitor: Matthias Stepan pansion of already established vocational train- parts of the German economy would benefit in [email protected] ing boards and examination boards in China, the long-term. New markets would emerge for however, will require the necessary political German products including high-tech machines Mercator Institute for China Studies backing. and systems, modern components like control Klosterstraße 64 chips or highly developed intermediate products 10179 Berlin The restructuring of the education system will made, for example, by speciality chemicals com- Tel: +49 30 3440 999 – 0 Mail: [email protected] play a crucial role in the success or failure of panies. www.merics.org

viii xv State Council (2014). 现代职业教育体系建设规 Ministry of Education People’s Republic of Chi- 划（2014-2020 年） na (2014). 高等职业教育创新发展三捏捏行动规划（2015-2017 年） i http://www.moe.gov.cn/srcsite/A03/moe_1892/mo e_630/201406/t20140623_170737.html http://www.gdpi.edu.cn/cms/ci/xsst/resource/80ae http://learning.sohu.com/20150614/n414990956.s ix bd7599a9dfb5ea969a4cf03ddee7.pdf html xvi ii http://www.china.diplo.de/Vertretung/china/de/202 Zentralstelle für Weiterbildung im Handwerk – Wübbeke, Jost und Björn Conrad (2015). “Indus- -shan/__seiten/20150212-berufsbildung-ahk.html ZWH. China-Deutschland Deutschland-China. trie 4.0: Deutsche Technologie für Chinas indus- x State Council (2014) 现代职业教育体系建设规划 Cooperation in vocational training, 2. Edition. Link trielle Aufholjagd“. （2014-2020 年） to 1. Edition (30 years cooperation in vocational http://www.merics.org/fileadmin/templates/downlo xi Ministry of Education People’s Republic of China training): http://www.q- ad/china-monitor/China_Monitor_No_23.pdf zwh.de/zwh/fileadmin/PDF/Publikationen/chinabro iii (2014). 高等职业教育创新发展三捏捏行动规划 AHK Business Confidence Survey 2014, schuere_zwh.pdf http://china.ahk.de/fileadmin/ahk_china/Dokument （2015-2017 年） e/Publications/Business_Surv_2014_de.pdf, AHK http://www.gdpi.edu.cn/cms/ci/xsst/resource/80ae Business Confidence Survey 2015 bd7599a9dfb5ea969a4cf03ddee7.pdf http://china.ahk.de/uploads/pics/Business_Surv_2 xii Provincial government have since September 015_cover_final.jpg 2014 released specific implementation plans e.g. iv http://www.chinadaily.com.cn/china/2015- 关于加快发展现代职业教育的实施意见 07/09/content_21237438.htm http://mianyang.zxbtz.net/News2/17899.html v http://www.chinanews.com/edu/2015/03- xiii Molnar, M. und V. Koen (2015). “Providing the 03/7095792.shtml right skills to all in China: ‘From made in China’ to vi From 2013 to 2014 the number of industry ro- ‘created in China’”. OECD Economics Department bots per 10,000 industrial workers has nearly Working Papers No. 1219. doubled to 30. In Germany it is close to 300 http://dx.doi.org/10.1787/5js1j18g4tlx-en, http://www.ifr.org/industrial-robots/statistics/, http://www.oecd-ilibrary.org/economics/providing- http://www.reuters.com/article/2015/02/05/robots- the-right-skills-to-all-in-china_5js1j18g4tlx- china-idUSL6N0VF52O20150205 en?crawler=true xiv vii In 2014 Chinese vocational apprentices spent The 640 Universities for Applied Sciences are only 73 days outside the vocational college gain- not going to be newly established. Previously ex- ing practical experience. isting universities at provincial level are to undergo http://www.gov.cn/xinwen/2015- status change. The actual selection process is still 07/23/content_2901477.htm open. Most of the universities are sceptical about the conversion.