China - Polytechnic - Television University Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 4406-CHA STAFF APPRAISAL REPORT CHINA POLYTECHNIC/TELEVISION UNIVERSITY PROJECT August 24, 1983 Projects Department East Asia and Pacific Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS US$1.00 = Yuan (Y) 2.00 ACADEMIC YEAR September 1 - August 31 F IS CAL YEAR January 1 - December 31 ABBREVIATIONS CNTIC - China National Technical Import Corporation CRTVU - Central Radio and Television University IILO - International Investment and Loan Office MOE - Ministry of Education PTVU - Provincial Television University TVU - Television University  FOR OFFICIAL USE ONLY CHINA POLYTECHNIC/TELEVISION UNIVERSITY PROJECT Table of Contents Page No. BASIC DATA POSTSECONDARY EDUCATION. . . . . . . . . . . . . . . . . . . . . . . 1 Overview . . . . . . . . .-. . . . . . . . . . . . 1 Conventional Universities . . . . . . . . . . . . . . . . . . . . 2 Polytechnic System . . . . . . . . . . . . . . . . . . . . . 2 Television University System . . . . . . . . . . . . . . . . . . . 3 Constraints to Development of the Polytechnics and TVU Systems . . 4 Bank Group Strategy in Education . . . . . . . . . . . . . . . . . 5 THE PROJECT.. . .5 Project Objectives and Scope . . . . . . . . . . . . . . . . . . . 5 The Polytechnic System . ... . . . . . . . . . . . . . . . . . . . 6 The Television University System ... . . . . . . . . . . . . . . 8 Evaluation, Planning and Preparation of Future Projects. . . . . . 10 Project Management and Implementation. . . . . . . . . . . . . . . 11 Status of Project Preparation ... . . . . . . . . . . . . . . . 12 Project Cost and Financing . . . . . . . . . . . . . . . . . . . . 12 Procurement. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Disbursement . . . . . . . . . . . . . . . . 14 Benefits and Risks . . . . . . . . . . . . . . . . . . . . . . . . 15 AGREEMENTS REACHED AND RECOMMENDATIONS . . . . . . . . . . . . . . . 15 This report is based on the findings of an appraisal mission in January 1983 comprising Messrs. F. Farner (mission leader), V. Billeh (educator), S. Sigurdsson (architect), and Mses. V. Li (economist), and L. Mitchell (operations assistant). Thisdocument has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  ANNEXES 1. Comparative Education Indicators 2. Government Policies in Higher Education 3. Polytechnics a. Project Polytechnics b. Location, Fields of Study and Status of Project Polytechnics c. Present and Planned Enrollment at Project Polytechnics d. Curriculum Development e. Physical Facilities of Project Polytechnics f. Teaching Staff in Selected Project Polytechnics by Rank, Age Groulp, College Education Level, Teaching Experience and Sex g. Types of Laboratories and Centers to be Established at Project Polytechnic s 4. Television University System a. Planned Annual Student Intake for PTVUs, 1983-90 b. Student 'Flow Chart for the TVU System, 1979-90 c. Program and Course Development Schedule of the CRTVU d. Summary of Expansion of the TVW's Program Production Capacity e. Physical Facilities at the TVU System f. Project 'Institutions of TVU System g. CRTVW's Science and Engineering Laboratories 5. Plan for Tec'hnical Assistance 6. Project Indicators 7. Project Costs a. Estimated Cost by Project Component b. Summary of Estimated Project Costs c. Unit Construction Costs d. Disbursement Schedule 8. Implementation a. Implementation Schedule b. Polytechnic Commission Chart 1: Structure for Project Implementation 9. Selected Documents and Data Available in the Project File MAP  CHINA POLYTECHNIC/TV UNIVERSITY PROJECT Basic Data 1981 General Total Population: 996.2 million Adult Literacy Rate: 66% Primary Secondary Higher Enrollment (grades 1-5) (grades 6-10/11) (grades 12-15) Total Formal Education (mln) 143.3 49.8 1.8 /a 194.8 - as % of age group 93% 42% /b 3.1% 7- Nonformal Education (mln) 9.7 6.9 0.8 17.4 Undergraduates Post- Full-time No. of (000) graduates teaching staff Higher Education insts. Engr. Sci. Other (000) (000) Universities and Institutes /c 518 426.7 98.8 535.2 15.6 } Specialized Colleges /d 186 34.6 1.1 183.2 0 } 249.9 Total 704 461.3 99.9 718.4 15.6 249.9 Science and Technical Personnel in State-Owned Units No. of scientific and technical personnel: 5.7 million Technical personnel per 1,000 people: 5.7 Technical personnel per 1,000 staff and workers: 68.3 Expenditure on Education Total expenditure on education as % of total national income 3.6% Government expenditure on education as % of government expenditures 8.3% Government capital expenditure on education as % of government capital expenditures 5.3% Government recurrent expenditure on education as % of government recurrent expenditures 8.8% . Percentage Allocation of Public Recurrent Expenditure on Education Primary - 34% Secondary - 39% Higher - 27% /a Includes 0.5 million postsecondary students enrolled in technical schools. /b Includes nonformal education. 7W Four years of study or more. 7d Two to three years of study.  POST-SECONDARY EDUCATION Overview 1. China has launched a drive to modernize its economy, raise people's living standards and remedy the damages caused by the economic mismanagement of the previous decade. The emphases are on education, science, agriculture, energy and transport. The Government views education as the key to modern- ization because the lack of trained manpower is a serious constraint on the country's economic development. The shortage stems from the disruption of higher education during the Cultural Revolution, when radical policies caused the closure of schools and universities. As a result, China has lost an estimated 2 million technicians and 1 million college and university graduates who would otherwise have been graduated during the 'ate 1960s and early 1970s. 2. Manpower requirements are being revised in light of recent Govern- ment economic reforms. But the most recent projections of requirements for graduate level manpower indicate a special problem in science and engineering, where the present flow of university graduates (30,000 a year) will meet only 30% of the estimated yearly requirements during the coming decade. Even considering the output from the nonformal system, the current supply of qualified labor in science and engineering can satisfy no more than half the demand for graduates. The shortage of economists, social scientists and lawyers in China is even more acute. Only about 12% of all university students in China are enrolled in liberal arts and social sciences. As for middle-level technicians, the current output from full-time institutions of 50,000 a year only meets about 25% of the estimated annual requirements. 3. Government Strategy. To alleviate the manpower shortage and increase access to higher education, the Government decided to: (a) expand existing conventional universities; (b) establish a system of polytechnics,/l which would offer postsecondary technical education to recent middle-school graduates; and (c) expand the Television University (TVU) system, primarily aimed at upgrading the skills of currently employed workers. The Government has started to improve conventional universities with Bank Group assistance (Ln. 2021/Cr. 1167-CHA). However, expansion of the conventional university system is limited by constraints that cannot be removed immediately (Annex 2). The Government is now diversifying the production of graduates by expanding the TVU system and establishing polytechnics to produce middle-level technicians. These systems are faster and less costly means of expanding post-secondary education than conventional universities. They will benefit from new policies that are being introduced - the polytechnics will be nonresidential, levy fees and permit student choice in future employment, and /1 The Chinese term is "Short-term Vocational College." The word "short- term" refers to the duration of study, which is two to three years compared to four in a university.  - 2 - the TVU will enroll an increasing proportion of recent middle-school graduates as the need for in-service upgrading declines. The Government plans to double enrollment in higher education by 1990, and to triple the enrollment ratio by the end of the century, by increasing enrollment of conventional universities, polytechnics and the TVU to 2 million each. The project would assist the Government in developing the polytechnic and TVU systems. Conventional Universities 4. There are 1.3 million students in about 700 formal higher educa- tion institutions classified into two categories: (a) 518 four-year universities and colleges with an enrollment of 1.1 million that award a bachelor's or higher degree; and (b) 186 two to three year "specialized colleges," with an enrollment of 0.2 million which award postsecondary diplomas in technical education. Students are admitted on the basis of their scores on a uniform national entrance examination, and less than 5% of the applicants gain admission. The enrollment ratio for formal higher education in China is only 2.1%, compared with 4-5% in other developing countries. In addition, there are 506,000 students enrolled in technical schools. These schools and the specialized colleges are not meeting the needs for technician level manpower associated with rapid industrial devel- opment and modernization, because of poor organizational design, relatively high cost of residential students, narrowness of curriculum, outmoded equipment and shortage of qualified faculty. A new type of college, the polytechnic, is emerging to meet the need. Polytechnic Syst-em (Annex 3) 5. Polytechnics are designed to produce middle-level technicians, by offering two to three years of technical education to residents of a locality and to gear outpult towards satisfying local demands. They will offer access to higher education for students who fail to secure a place in a conventional university after taking the national entrance examination. The Government is launching the first phase of this program with 17 polytechnics, some of which have already begun to admit students, and plans to establish about one hundred by 1990. Most polytechnics are being converted from existing educational institutions. These institutions require considerable upgrading before they can function properly. Their emergence reflects important government policy changes towards making higher education nonresidential and creating a labor market. In contrast to conventional university graduates who are assigned jobs upon completion of studies, graduates of the polytechnics would not be guaranteed jobs by the state or locality (though they would be assisted by a local employment service). Polytechnics show promise to be more efficient than conventional universities, both educationally and economically, because: (a) no residential facilities would be provided, thereby overcoming the principal enrollment constraint of conventional colleges and universities and eliminating a major cost factor; (b) new sources of funding would be tapped,  including a combination of modest student fees and municipal and provincial funding; (c) a more comprehensive, relevant and practical curriculum would be established, thus increasing class size and promoting efficient use of facilities and staff; and (d) the technicians produced will receive training that is practical rather than theoretical, and relevant because based on local needs. Close coordination with local enterprises, directly or indirectly through the Provincial Planning Commissions, has helped to identify priority fields of study. Television University System (Annex 4) 6. In 1981, 1,763 nonformal institutions offered higher education to 1,350,000 workers under various forms: factory-run institutes, spare-time (or part-time) universities, TVW, correspondence courses and evening courses. The Government has given much attention to the TVU system in recent years because it can achieve economies of scale and increase enroll- ments quickly in fields where the need for graduates becomes urgent. It can also afford to bring the best teachers to students and develop sophisticated methods of teaching through various media. Of 110,000 full-time students admitted in 1979, 69% obtained the equivalent of college degrees after three years. More than 90% of the students are employees of factories and other government units who have passed a TVU entrance examination. Most full- time TVU students are released either full or part time from work to attend classes. Recent secondary school graduates who take the entrance examination for admission to conventional universities and colleges and score just below the cut-off point can also be admitted to the TVU. In addition, an estimated 5-6 million free viewers (unregistered students) watch such programs as TV English language. 7. The TVU system was started in the early 1960s to train science teachers but was closed during the Cultural Revolution. It resumed broadcasting in 1979 with the establishment of a Central Radio and Television University (CRTVU) and 28 provincial television universities (PTVUs). The CRTVU is administered by the Ministry of Education in cooperation with the Ministry of Broadcasting. The PTVUs are administered and funded by provincial governments and local enterprises. The PTVUs operate 500 branch schools, study centers /1 and work stations,/2 and 14,000 TV classes. /1 The branch school is the PTVIWs biggest field unit usually serving a city or prefecture. Most PTVUs house a study center comprising class- rooms, laboratories and audio-visual centers in addition to PTVU program production and administrative facilities. /2 The work station is controlled by a branch school or directly by the PTVU. It is located in a factory, mine, or local government bureau that supports it financially. It supervises TV classes usually located in factories.  - 4 - 8. The CRTVIJ broadcasts 33 hours of educational programs a week through the national television network. It also distributes audio cassettes and booklets to the TV classes and organizes examinations. The CRTVU provides a unified curriculum of 28 courses in science and technology and 22 in social sciences and arts. A few PTVUs offer additional courses of their own. The television lectures are supplemented by face-to-face tutor- ing at work stations, for which instructors are recruited from factories and nearby higher education institutions. Laboratory work is done at the branch schools and work stations, or if facilities are not available, at labora- tories in other colleges and universities, often for a fee per student. Constraints to Development of the Polytechnic and TVU Systems 9. The polytechnics system is constrained by: (a) inadequate facili- ties and equipment: since tlhe polytechnics are converted from existing institutions that offered narrow specializations, they lack facilities and equipment required for a broad program; (b) low staff qualifications (Annex 3f): of the full-time teaching staff only 3% have had postgraduate education, and 50% have had less than five years of teaching experience. Of the part-time teachers hired from other colleges and industries, about 6% have had postgraduate educatiLon. There is also a shortage of experienced administrators to operate the polytechnics; and (c) irrelevant curriculum (Annex 3d): existing polytechnics offer a theoretically oriented curriculum that is an abridged version of a curriculum in a regular university. Instructional programs need 'Further refinement to suit the purposes of the polytechnics. 10. The TVU system is constrained by: (a) limited program production capacity: TVUs depend on sparse facilities of their own and limited studio facilities provided by broadcasting authorities. They are capable of pro- ducing only simple TV and radio programs; (b) lack of transmission capability: additional broadcasting time, at hours suitable for students, is not available on the national television and radio network. In most PTVUs, alternative delivery means, such as cable or videocassette machines, do not exist. As a result of these shortages, PTVUs cannot admit students every year, creating gaps in enrollment in some years; (c) inadequate space and equipment: PTVUs lack laboratories and teaching space of an adequate standard. Only 20-30% of experimental work required in the curricula can be conducted. Most PTVUs do not: have microcomputers for teaching computer literacy and simple programming. PTVUs also lack suitable office facilities, computers for data processing, and modern office equipment; and (d) poorly trained staff: the qualifications of program-making staff (academics, curriculum developers, video and audio producers, and technical staff) are inadequate. There are also shortages of technicians trained to operate and maintain high technology equipment, educational computing specialists, and qualified ttLtors and administrators.  -5- Bank Group Strategy in Education 11. In support of the Government-s strategy (para. 3), the first University Development Project (Ln. 2021/Cr. 1167-CHA) aims to increase the output and improve the quality of teaching and research in science and engineering at 28 leading universities. The second educaticn project (Cr. 1297-CHA) is designed to increase the output and improve the quality of teaching and research at 18 agricultural colleges and research institutes. Implementation of both projects has been generally smooth, with good portions of project funds being disbursed or committed in the first year. Project indicators also show that progress is being made toward reaching project objectives. Although both projects would increase enrollment, their thrust is quality improvement because quantity expansion on a large scale is not feasible under the conventional university system. The university education sector alone cannot satisfy future skilled manpower demands. Hence the Bank Group also supports the Government's policy of providing technical education to a wide segment of the population through the polytechnic and TVU systems. Through these two systems, it is projected that the gross enrollment ratio of higher education in the year 2000 would be triple the current ratio of 3.1%. Appraisal has been completed for a second project in agricultural education and is scheduled for a second university development project. The Government is discussing additional future projects in teacher training, secondary vocational schools, and social sciences at the university level. THE PROJECT Project Objectives and Scope 12. The project would assist the Government to increase the output and improve the quality of skilled technical manpower for its economic modernization program by support for two cost-effective systems of postsecondary education - the polytechnic and TVU systems. In the poly- technics, the project would contribute to the development of three new policies in higher education - (i) nonresidential institutions, (ii) student fees, and (iii) elimination of the guarantee of job assignment for graduates./l These policies are aimed at removing obstacles that have hindered development in the conventional system. Specific objectives of the proposed project would be to: (a) increase the output of technicians from 17 polytechnics, a first phase development for this type of education, and expand the enrollment capacity of the TVU system; /1 Students with good grades will be recommended by the polytechnic to local enterprises and units for employment.  - 6 - (b) raise t'he quality, scope and relevance of instruction; and (c) improve the standards of management in both systems. The project institutions would work towards targets to be attained by the end of the project with respect to student-teacher ratios, the number of speciali- zations and courses, space utilization and others (Annex 6). 13. The project would consist of the following components: (a) Polytechnic System: establishment or improvement of 17 polytechlnics, including construction or renovation, furnishing and equipping of facilities; provision of staff development for both academic and administrative staff; (b) Television University System: (i) CRTVU: construction of, and provision of furniture and equipment for, a production center, laboratories and a printing house; and provision of technical assistanice. (ii) PTVUs: construction or rehabilitation of, and provision of furniture and equipment for, 9 (major) broadcast- standard production centers, 19 (minor) nonbroadcast-standard producti'on centers, and 85 study centers; and provision of tech- nical assistance; and (iii) transmission stations: construction of, and provision of equipment for, 9 TV transmission stations; and provision of technical assistance; and (c) Evaluation, planning and preparation of future projects. The Polytechnic System (Annex 3) 14. Assistance would be provided to develop 17 polytechnics located in urban population centers, which will produce technical graduates essential to China's industrial development (para. 5). The project would support the polytechnics to increase enrollment, improve the quality and relevance of instruction, and improve management. During this initial phase of polytech- nic development, the Government would implement new policies (para. 12) that would reduce costs and introduce market forces to direct student demand in education and f'uture emp'Loyment. The absence of boarding is expected to reduce capital and' recurrent costs by 35%. Collection of student tuition (Y 50/student, or about 7% of the 1981 average wage per worker in urban areas) would also reduce the financial burden on local governments, and its impact on student demand would be studied. 15. Increasing Enrollment (Annex 3c). There are currently 7,000 students at the 10 existing polytechnics. Enrollment is expected to increase at least sixfold to about 45,000 students at the 17 project institutions by the end of the project. Increased enrollment and output would be achieved primarily by provision of new facilities, including  -7- libraries, laboratories and classrooms, as well as some rehabilitation. The total area available for instruction at the end of the project would be about 270,000 sq m (with new construction accounting for 45% of the total), which conforms to average standard space requirements per student. 16. Raising the Quality of Instruction. Gains in the quality of instruction would be attained by the combination of improved facilities (para. 15), acquisition of modern teaching equipment, curriculum develop- ment, and a program of staff development and expert services (Annex 5). 17. Equipment acquisitions would comprise basic equipment and instruments needed for individual students and smaller numbers of standard and advanced laboratory equipment, usually used by groups of students. Laboratory equipment and computers would provide students with "hands-on" experience. Library acquisitions would include reference books and foreign language materials. Other equipment would include audiovisual equipment (such as video playback systems, monitors and projectors) and teaching aids, as well as language laboratory equipment (Annex 3g). 18. The curriculum presently used in the polytechnics is essentially an abridged version of a university curriculum. It needs to be further developed to suit the requirements of a technician training program, with emphasis on practical work rather than theoretical studies. In response to local manpower and employment needs, the project would include the development of a range of specializations in business management, economics and engineering (Annex 3d). Of particular concern is the relevance of the curriculum to nearby industries; this aspect would be closely monitored and frequent contacts between polytechnics and local industries would be promoted. 19. The program of staff development (Annex 5) for polytechnic teaching staff would include local and overseas fellowships, study tours and seminars. The program for fellowships and study tours would include training in basic sciences, computer sciences, business management, commerce and engineering. Seminars would be conducted locally by experts financed under the project for groups of polytechnics with common fields of study. Selected polytechnic staff would attend the seminars and would subsequently train other staff at their institutions. The seminars would cover areas such as curriculum development, the use of advanced computers and science/engineering equipment, and teaching methods that make best use of audiovisual aids. 20. Improved management would be addressed through a staff development program including short-term foreign and local training for administrators and expert services in management. Particular areas that need attention at the polytechnics, and which would be a focus of the staff development component, are maintenance of student and financial records; scheduling of classes to optimize use of space and equipment; and administration of  - 8 - computer centers, libraries and audiovisual centers. An overall goal of management improvement is to attain a 15:1 student-teacher ratio by the end of the project. The Television University System (Annex 4) 2l. Support would be provided to the TVU system at both the national and provincial levels to expand its coverage and increase enrollment; enhance the scope, quality and relevance of programs; and improve management. 22. Expanded and Output. The TVU system would increase its coverage and enrollment by alleviating the -present constraint of insufficient broadcast time. It would do this by: (a) diversifying methods of program delivery; (b) establishing additional transmission capacity; and (c) establishing experimental study groups in rural areas. 23. Under the project, the CRTWTJ would reduce its heavy reliance on TV broadcasts and produce courses using other media such as video and audio- cassettes and printed materials (Annexes 4c and 4d). Programs not broadcast by the CRTVU would be either transported by air or land, or transmitted via microwave to provincial stations for recording. The programs would then be broadcast locally or delivered via land transport to the study centers and branch schools. 24. Nine UHF transmission stations would be established in the cities where production capacity for broadcast quality programs is provided (Annex 4e). Transmission equipment provided would include UHF transmitters, antennae, transmission lines, frequency' and modulation monitoring equipment, microwave links and spare parts. Operating powers would vary from 30 kW to 50 kW. The stations would be used exclusively for broadcast of TVU programs, mainly to enrolled students, but they would have a potential audience of 5 million. They would each broadcast 70 hours per week, more than twice the hours broadcast nal:ionally (para. 8). 25. With the improved transmission capacity, enrollment in the TVU system is expected to increase sharply (Annexes 4a and 4b), from the present 280OOO students to 1.3 million in 1990 and 2 million by the year 2000. The present emphasis on upgrading employed workers is expected to diminish as more recent middle-school graduates are accepted by the TVU (raising the proportion of students from this source from the present 6% to about 30%), thus increasing the output of qualified new workers. Introduction of a mixed delivery system would allow the CRTVU to diversify its course offerings without requiring an increase in the limited broadcast time available. Moreover, the present gaps in enrollment in some years (para. 10) would be eliminated.  - 9 - 26. The introduction of new delivery systems (e.g., cassettes) would enable the TVU system to extend its reach beyond urban centers. As a first step, a pilot program of study groups would be set up in rural areas covered by the PTVUs. The project would provide them with classrooms, video and audio-cassettes and playback equipment, books and materials, and laboratory equipment. 27. Raising the Quality of Instruction. Improvements in the quality of instruction would be achieved by raising the TVU system-s capacity to produce programs and teaching materials, as well as by improving the technical and pedagogical quality of its programs; improvements in the teaching environment at the 85 study centers; and, more generally, by a program of technical assistance. 28. The project would assist the CRTVU in constructing and equipping a production center, comprising three studios, that could be used to produce programs of a high technical quality and pedagogical content. The center would be provided with studio equipment, as well as educational resource materials, and could thus employ a wide range of techniques in program production. These facilities and new techniques would allow the CRTVU to increase its number of programs produced from 300 at present to 700, and its number of courses from 50 at present to 170 by 1990. New courses would include civil and architectural engineering, light industry, chemical industry, management and accounting, political science and law (Annex 4c). The CRTVU would also establish a laboratory center in Beijing, consisting of 12 laboratories (Annex 4g), which would be used: (a) to train key provin- cial trainers in the use of laboratory equipment; (b) to set up demonstra- tion experiments for video recording; and (c) to upgrade the level of CRTVU and PTVU academic staff involved in the production of TVU courses. The CRTVU's programs would be supplemented by written materials produced in an in-house printing facility to eliminate delays that now occur in printing. 29. Production centers at the PTVUs (9 major and 19 minor) would be used to supplement the program output of the CRTVU in areas where local centers would have a comparative advantage (e.g., in producing programs that meet the specialized needs of local industry) or could produce programs of acceptable quality at a lower cost. Exchange of programs between provinces would be encouraged. The CRTVU would monitor programs needed by various PTVUs and would assume responsibility for producing national programs when these are required by several PTVUs. New program production capacity at the provincial level would be able to produce at least 3,250 programs - 1,350 (equivalent to 27 courses) at the nine major production centers, and 1,900 programs (38 courses) at the minor production centers. 30. The project would improve the physical facilities of 85 study centers (1-6 per province), each comprising laboratories, audiovisual centers and classrooms. The total area available for instruction at these centers at the end of the project would be about 300,000 sq m, with new  - 10 - construction accounting for 73% of the total (Annex 4e). Laboratories would be provided with equipment for teaching mechanics, electronics, civil and architectural engineering, -Light and chemical industry, and language courses. Other equipment would include audio and video cassette equipment for replaying nonbroadcast programs, micro computers for teaching computer "literacy" and basic programming, and audiovisual teaching aids. This equipment should allow the PTVUs to improve the quality and increase the percentage of experiments performed out of the total required by the curriculum from 20-30% at present to over 80% by 1990. Also, a greater proportion of students in technical fields would be able to perform more experiments. 31. A technical assistance program, including local training, foreign fellowships and study tours, and specialist services, would strengthen the professional qualifications of CRTVU-s technical and academic staff in such areas as program design, operation and maintenance of production equipment, management of learning resources, computers, and measurement, evaluation and research design. Similarly, at the provincial level, staff would be trained in program making, course design, and production techniques and procedures. A local training program would be developed to assist staff in maintaining audiovisual equipment (especially video cassette recorders) at the study centers. Staff of the nine transmission stations would be trained to operate and maintain the stations; since UHF transmission employs highly advanced technology that is relatively new to China, training would most likely be conducted at the manufacturer's facilities. 32. Improved Management. The project would improve management of the TVU system through provision of computers and technical assistance. The CRTVU would acquire a computer to establish files covering the whole TVU system, with data on student enrollment and characteristics, program and course production, examination results, and evaluation studies. Each PTVU would acquire a computer to establish similar records. Computers would also improve techniques and procedures for scheduling staff time and facilities, including libraries, and management of education resources. Senior TVU administrative staff (deans, directors, and registrars) would receive training in modern management practices through seminars organized by the CRTVU and conducted by experts. Evaluation, Planning, and Preparation of Future Projects 33. Evaluation. Project evaluation would involve measuring, during and at the end of the project, and for some years thereafter, progress (a) in implementation of new higher education policies; and (b) towards meeting project objectives using agreed project indicators (Annex 6). Each year, project institutions would collect required basic data and conduct tracer surveys of graduates to monitor the match between employment and fields of study, which will allow MOE to determine the success of the new government policy on student choice of employment. Local specialists would be employed for much of this work, which requires a knowledge of Chinese and/or the  - 11 - locality. Under the project, a unit for polytechnics has been established within the MOE to assist in consolidating and analyzing collected data; similarly, a research and evaluation unit for the TVU system has been established within the CRTVU. The project would provide funds to be used for local and foreign specialists (estimated at 590 and 150 man-months, respectively), local and foreign fellowships (estimated at 1,770 and 580 man-months, respectively), and required equipment. During negotiations, assurances were obtained from the Government that: (a) tracer surveys as described above would be conducted annually for polytechnics and period- ically on a sampling basis for TVUs, and project progress monitored annually until 1990; and (b) the planning and evaluation unit for polytechnics within MOE, and the research and evaluation unit within the CRTVU would be main- tained until 1990. An understanding was reached on the project indicators and targets to be used in evaluation. 34. Planning. Because expansion of the polytechnic system is expected to be rapid (para. 5), extensive planning is required at the central and provincial levels. The polytechnic unit within MOE would be responsible for overall development of the system. Smaller planning units have been or are expected to be established at the provincial level and would conduct studies in such areas as school location planning, and curriculum and staff development. Similarly, the TVU research and evaluation unit would offer advisory services to the PTVUs and would carry out studies aimed at improving teaching methodology and providing the Government with statistical data on costs and effectiveness. Moreover, the unit would be responsible for planning additional study centers and delivery capability to expand TVU coverage throughout the provinces by 1990. The project would provide funds to be used for local and foreign specialists (estimated at 270 and 140 man-months, respectively), local and foreign fellowships (estimated at 2,270 and 530 man-months, respectively), and required equipment. 35. Preparation of Future Projects. China plans to tackle its shortage of skilled manpower by doubling its enrollment in higher-level education by 1990. Two important systems it will use to achieve such a rapid expansion are the polytechnics and the TV University. It also plans further quality improvements of education at the primary, secondary and higher levels, and some quantitative expansion at its conventional colleges and universities. To prepare for these as well as other investments in the education sector, the project would provide funds for local and foreign specialist services (estmated at 100 and 130 man-months, respectively), local and foreign fellowships/study tours (estimated at 200 and 100 man-months, respectively), and related equipment. Project Management and Implementation 36. Responsibility for project implementation would rest with MOE. The Vice Minister for Planning and Development would assume overall responsibility for directing the project. He would be aided in this task by the Inter- national Investment and Loan Office (IILO) established within MOE in 1982.  - 12 - This office would. coordinate with and be supported by relevant sections of MOE. Additional staff wouLd be appointed to IILO, one group to be responsible for polytechnics, the other for the TVU system. IILO would also coordinate project implementation with CRTVU administration and Provincial and Municipal Bureaus of Higher Education; it would also draw on advisory services from outside MOE, particularly from the China National Technical Import Corporation (CNTIC) of the Ministry of Foreign Economic Relations and Trade. At the institutional level, development plans have been prepared by senior management committees, which report to the Provincial or Municipal Bureaus of Higher Education. These local bureaus would report to IILO for all matters pertain- ing to project implementation. Staffing of IILO and relevant sections within MOE would be adequate for implementing the project. A Polytechnic Commission, including representatives from the 17 institutions, would be formed to assist in project implementation. The Commission would be advised on equipment procurement by a team selected from members of the Review Commission of the University Development Project (Ln. 2021/Cr. 1167-CHA) (Annex 8b). During negotiations, assurances were obtained from the Government that a Polytechnic Commission would be established and maintained until the closing date. Fellowship candidates nominated by project institutions would be submitted to local Bureaus of Higher Education and to MOE for approval. Technical assistance for installation and maintenance of major pieces of equipment would be included in equipment procurement contracts. Terms of reference for other specialists would be submitted for Association review before contracts are signed. Specialists would be selected in accordance with the "Guidelines for the Use of Consultants by World Bank Borrowers" (August 1981). Status of Project Preparation 37. The project is at an advanced stage of preparation. Land has been acquired and designs prepared for all project institutions; civil works for some institutions have already begun. A mission of procurement specialists, financed out of Ln. 2021/ Cr. 1167-CHA, has assisted the Government in refining building designs and equipment lists. Bid documents for all equipment in the first phase of procurement have been substantially completed. Project Cost and Financing (Annex 7a and b) 38. The total cost of the proposed project is estimated at RMB 412.5 million or $206.2 million equivalent including contingencies. Project costs include: (a) construction and renovation of physical facilities; (b) locally procured and imported equipment and furniture; and (c) technical assistance. Association financing under the proposed credit would amount to $85.0 million (41% of total project costs) and cover all foreign exchange costs. The remaining $121.2 million would be financed by the Government. Cost estimates for civil works, goods, and services are based on May 1983 prices. Construc- tion costs were estimated on the basis of recently started construction, analysis of unit prices of comparable buildings, and existing sketch plans. Furniture and equipment costs were based on master lists prepared by project  - 13 - institutions, and reviewed by Bureaus of Higher Education, MOE, consultants, and Association staff. Technical assistance costs for foreign experts (including salaries, allowances, housing costs, and airfares) were estimated at $7,500 per man-month, and costs for overseas fellowship training were estimated at $1,250 per man-month. The contingency allowance of $40.6 million includes: (a) physical contingencies ($8.2 million) estimated at 5% of base costs; and (b) price contingencies ($32.4 million), allowing for an estimated local and foreign price escalation of 5.5% per annum for the balance of 1983, 7.5% in 1984, 7% in 1985, and 6% in 1986-88. Project-financed goods are exempt from import duties and taxes. Recurrent costs generated by the project are estimated at about $16 million equivalent per annum at May 1983 prices, and would be insignificant compared to the budgets of MOE and the provincial and municipal bureaus of education. Procurement 39. Civil Works. Under this project, provincial and municipal governments would finance and supervise all civil works and follow local procedures for selection of construction bureaus, award of contracts, and settlement of bills. These procedures are being followed in the University Development and Agricultural Education and Research Projects and are satisfactory. Buildings are suitably designed for education needs and the Association would supervise construction. 40. Equipment. Equipment would be procured in accordance with acceptable lists prepared by project institutions, reviewed by the Polytechnic Commission (para. 36), consolidated and approved by MOE, and approved by the Association. Equipment would be procured in two phases over about two years. Bid documents and specifications for ICB would be prepared by the Commission, the advisory team and IILO (para. 36) of the MOE. Invitations to bid are expected to be issued in the first semester of FY84. MOE would carry overall responsibility for procurement and administration, and would continue to receive assistance from CNTIC in handling bid invitation, bid evaluation, and contract award. 41. Of the total project cost of $206.2 million equivalent, equipment is estimated to account for $124.0 million (with a base cost of about $98 million). Equipment lists have been divided into 2 categories in accordance with expected sources of supply. One list, 45% of the total, contains basic and standard laboratory equipment, laboratory materials and books in Chinese. These are available from local suppliers and quality is reasonable. Such items will be financed by the Covernment and procured in China in accordance with local procedures, which are satisfactory. The Association is satisfied that such procedures are economic and efficient, because (a) the prices of the items on this list manufactured in China are generally lower than those in the international market, and (b) it takes less time to obtain these miscellaneous items from the local market than through international competitive bidding (ICB). The second list, 55% of  - 14 - the total, contains equipment that is unlikely to be manufactured by local industries. The bulk of this equipment would be procured through ICB and financed by the Association. Items on this list would be grouped into packages to the extent possible for bulk procurement. Each invitation to bid exceeding an estimated cost of $200,000 would be subject to ICB. Local manufacturers would be permitted to participate and would be extended a 15% preference margin, or the prevailing customs duties, whichever is lower, in the evaluation of bids. Items or groups of items estimated to cost less than $200,000 in each contract and not exceeding an aggregate amount of $6.0 million may be procured through: (a) limited international tendering, whereby contracts would be awarded on the basis of comparison and evaluation of quotations obtained from at least 3 suppliers; or (b) direct purchase for proprietary items or where justified by the need for standardization. Books in foreign languages and audiovisual instructional materials would be pro- cured directly from publishers/producers or distributors. Prior Association review of contractL awards would exclude small contracts ($200,000 or less) estimated to cover less than 25% of the value of all contracts. Post review of such contracts would be performed by review missions on a sample basis. Disbursement (Annex 7d) 42. The proposed credit of $85.0 million equivalent would be disbursed on the basis of: (a) 100% of the foreign expenditures of imported equipment or the ex-factory cost of locally manufactured equipment; (b) 75% of the invoiced cost of imported equipment procured locally; (c) 100% of the expenditures for specialist services and study tours; (d) 100% of expend- itures for overseas fellowships; and (e) 100% of foreign expenditures for books and instructional materials. 43. Under tihe project, a special account would be set up for disburse- ments for the overseas fellowship program. The special account would allow smooth implementation of the program, involving over 700 fellows, by facilitating advance payments to students. The special account would be set up and maintained in US dollars in the Bank of China in New York. The initial deposit of the US dollar equivalent of SDR 800,000 represents the highest estimated expenditure for any three months of the program. Applications for replenishment would be submitted quarterly. Opening of the special account would be a condition of effectiveness. 44. The completion date would be December 31, 1988 and the closing date December 31, 1989. The proposed project would be implemented over a five-year period at a faster pace than the regional average for education projects. This is feasible because some project items are at an advanced stage of preparation. 45. Accounts and Audit. During negotiations, assurances were obtained from the Government that: project accounts would be maintained  - 15 - according to accounting principles and practices satisfactory to the Association; annual audits of project expenditures would be carried out by independent auditors acceptable to the Association; and it would provide the Association with audited financial statements within six months after the close of each Chinese fiscal year. Benefits and Risks 46. Benefits. There would be five principal benefits from the pro- posed project: (a) policy changes implemented for the polytechnics would have long-term effects on the higher education and employment systems in China; (b) the output of skilled technicians would increase; (c) the quality of graduates would improve; (d) the management of both the polytechnics and the TVU system would improve; and (e) access to higher education would be expanded. The shortage of graduates and skilled technicians constitutes a severe constraint on China's economic development. As a result of the proposed project, the Government expects polytechnic enrollment to increase to about 45,000 students. TVU enrollment would more than triple to 1.3 million in 1990, with a corresponding increase in output (425,000 graduates). By the end of the project, 30% of enrollment in the TVU would comprise recent middle-school graduates, who would become net additions to the skilled labor force. "Hands on experience in using modern equipment and computers would provide better qualified graduates. 47. Risks. A major uncertainty for this project concerns the newness of the polytechnic institutions and policy changes for the Chinese education system. Particular attention would therefore be paid to ensure that adequate evaluation and planning for the future development and extension of the polytechnic system is carried out. These functions would be assumed by polytechnic units established or expected to be established at the national and provincial levels and strengthened through technical assistance provided under the project. Moreover, targets (project indicators) have been established and would be used to identify potential problem areas. A second risk concerns the installation and the operation and maintenance of project equipment. Some of the equipment, especially for the TVU transmission stations, is very sophisticated. An extensive program of technical assis- tance has therefore been developed to train staff who would use and maintain the new equipment. AGREEMENTS REACHED AND RECOMMENDATIONS 48. Understanding was reached between the Government and the Association on means to measure progress towards meeting project objectives, including specific targets for expansion of enrollment and teaching programs, and improvement of management and teaching quality (para. 33).  - 16 - 49. Assurances were obtained from the Government that: (a) the project would be monitored and evaluated annually on the basis of tracer surveys and project indicators as agreed upon between the Govesrnment and the Association (para. 33); (b) a planning and evaluation unit for polytechnics within MOE and a research and evaluation unit in the CRTVU would be maintained until 1990 (para. 33); (c) a Polytechnic Commission would be established and maintained during the life of the project (para. 36); and (d) the Government would submit for Association review audited financial statements within six months after the end of each Chinese fiscal year (para. 45). 50. Conditions of effectiveness are that: (a) China's State Council would approve the Development Credit Agreement; and (b) the Borrower would set up a special account tc, facilitate implementation of the overseas fellowship program (para. 43). 51. Subject to the above conditions, the proposed project would con- stitute a suitable basis for a credit of SDR 79.6 million ($85.0 million equivalent) on standard IDA terms.  - 17 - Annex 1 COMPARATIVE EDUCATION INDICATORS Page I of 2 JUNE 3, 1983 CENTRAL GOVERNMENr EXPENDITURE COMPLETION RECURRENT ON EDUCATION EDUCATION ADULT RATE POR UNIT COST PROGRESSION GNP PER AS PERCENT RECURRENT LITERACY PRIMARY PRIMARY PRIMARY PRIMARE RATE FROM SEOINDARY SECONDARY HIGHER EASE POP. CAPITA PERCENT GNP TOTAL CENTRAL EXPENDITURES RATE ENROLL. SCHOOL STUDENTS EDUCATION PRIMARY TO ENR3LL. STUDENTS ENROLL. YEAR MILLS. (USS) DEVOTED TO GOVERNMENT ALLOCATED TO: (2) RATIO CYCLE PER AS PERCENT SECONDARY RAY IO PER RATIO (1979) (1979) EDUCATION EXPENDITURE PRI SEC HI (1976) (2) (2) TEACHER GNP/CAPITA (2) (1) TEACHER (Z) (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) DEVELOPED COUNTRIES AUSTRALITA 80 14.6b 8,870 6.3" 14.6