Reform of vocational education and training in China

Reform of lVocational Educafion and 19774 Training in China October 1998 Country Study Summary THE ECONOMY With a population over 1.1 billion, China is the world's most populous country. It has achieved considerable success in reducing its population growth rate, from an annual rate of 1.8 percent in the 1970s to 0.9 percent. While a The broad majority of the population continues to lve in rural areas, urban population growth rates exceed four percent annually and about a third of Chinese now live in urban areas. While still a low income country; China has made I o th great strides in social indicators since the 1970s. Infant mortality rates have more than halved, the average life poicy of the expectancy has risen to 69 years, adult illiteracy rates have fallen to 27 percent, and net enrollment rates at the G i primaiy level are now close to 100 percent. Goernment IS Economic reforms have been successfully pursued since 1978. Initially they focused on improving incentives in agriculture, and allowing the market to play a greater role in rural areas, but over the past fewyears authorities have to move to a accelerated the reform process and opened up the economy with a much stronger commitment to liberalizing the urban industrial sector. GDP growth has been phenomenal over the last decade. Between 1984 and 1993, GDP grew market system, at 10.5 percent per year, spurred not by agriculture but by the industry and service sectors which grew at more than 12 percent annually. China's stabilization policies of 1994 and 1995 have proved successful in reducing inflation, but the major and in 1995 the economy grew at over 10 percent. Labor market liberalization started relatively late in the reform process, and, although progress has beenmade, labormarkets still retain some of theirpre-reformfeatures. issue is whether THE LABOR MARKET an effective and China's labor force is predominantly rural (see table 1). In urban areas, state-owned enterprises (SOEs) and collec- e tives (COEs) account for about 85 percent of employment. Unemployment is low by intemational standards-only efficient market 2.9 percent of urban la- Table 1. Labor Market indicators, 1980-1994 force in 1994--and system can be has remained low since (In millions, unless othewise specifsed) 1980. There have been, achieved Indcator 1980 1985 1990 1994 hoever, significant shifts labor supply 429.0 501.3 571.2 619.5 in the composition of la- through a Labor demand bor demand. In rural ar- Total 423.6 498.7 567.4 614.5 eas, ibfI