China - Long-term issues and options (Vol. 2 of 7) : Annex A : issues and propsects in education

Report No. 5206-CHA China: Long-Term Issues and Options Annex A: Issues and Prospects in Education May 22,1985 Education Division Projects Department East Asia and Pacific Regional Oifice FOR OFFICIAL USE ONLY Doc*ment of the World Bank This report has a restricted distrbution and may be used by recipients only in the performfance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. ** -  CURRENCY EOTTIVALENTS The Chinese currency is called Renminbi (LRfR). It is denominated in Yuan (Y). Each Yuan is 1 Yuan = 10 jiao = 100 fen In early 1984 the official exchange rate of the Yuan to the US dollar was around Y 2 = USSI. The internal settlement rate (ISR) of Y 2.8 = S1, however, was used in most merchandise transactions. The official exchange rate is now about Y 2.8 = $1. on January 1, 1985, the Covernment abolished the ISR. WEIGHTS AND MEASURES Chinese statistics are usually in metric units; in addition, mu and jin are often used: i mu = 0.1647 acres = 0.0667 hectares Ijin = 0.5 kg FISCAL YEAR Januarv 1 - December 31 TRANSLITERATION The Pinyin system is used in this report. Note: In tables, individual items mav not sum exactly to totals because of rounding errors.  FOR OFFICIAL USE ONLY CHINA: LONG-TERM ISSUES AND OPTIONS ANNEX A: ISSUES AND PROSPECTS IN EDUCATION Table of Contents Page No. SUMMARY ................................................... i-vii I. BACKGROURND .--------------------------------------1 Recent Developments .......................................... 2 2. UNIVERSALIZATION OF BASIC EDUCATION .... .................... o 5 Recenc Developments in Primary and Secondary Education ... 5 (a) Enrollment Trends ..................................... 5 (b) Staff Utilization ..................................... 8 (c) The K-School Philosophy ..... ............... 9 Issues for Basic Education Strategy .... ..................... 10 (a) Aims of Basic Education ............. .. ................ 10 (b) Demand for Basic Education ............ .. .............. 12 (c) Application of the K-School Concept ................... 15 (d) Management Issues ................ .. ................... 17 Prospects to the Year 2000 .................................. 20 3. TECHNICAL AND VOCATIONAL EDUCATION .......................... 23 Recent Developments ......................................... 23 Enrollment Trends ........................................... 24 Technical Manpower Demand and Supply .... .................... 26 Issues in Technical/Vocational Education .................... 27 (a) Specialization ........................................ 29 (b) Duration and Level of Training .......... .. ............ 31 (c) Shortages of Staff and Facilities ..................... 31 (d) Administration .. ... 32 (e) Status of Technical/Vocational Education . . 33 4. TEACHER TRAINING ............................................ 33 Teacher Demand and Supply ................................... 34 Issues in Teacher Training .................................. 40 (a) Curricula ... 40 (b) Structure .............................................. 41 (c) Administration ....................................... 42 (d) Teacher Status . . ................ .. 43 5. EDUCATION COSTS AND FINANCING ............................... 44 Background .................................................. 44 Current Spending ............................................ 45 Prospects to the Year 2000 .................................. 48 This document has a rticted distibu and may be used by reipints only in the performance of therofia duties. Its contents may not otherwise be discsed without World Bank authorization.  - ii Page No. TABLES IN TEXT Table No. 2.1 Projection of Primary Student Enrollments, 1983-2000 .......... ........... 20 2.2 Projection of Student Enrollments at the Lower Secondary Level, 1983-2000 .21 2.3 Projection of Student Enrollments at the Upper Secondary Level, 1983-2000 .22 4.1 Projected Primary Teacher Surplus or Shortage in the Year 2000 ............... 35 4.2 Primary Teacher Stock by Qualifications and Age, 1982 ............ 36 4.3 Projected Secondary Teacher Surplus or Shortage in the Year 2000 ............................... 38 5.1 TotaL Unit Costs of Education at Different Levels as a Percentage of GNP/Capita ..... ................. 46 5.2 Estimated Total Education Expenditures, 1979 and 1982 . .............................................. 47 5.3 Growth of Ministry of Education Recurrent Expenditures, 1977-82 .............................. 47 5.4 Percentage Distribution of Public Recurrent Educational Expenditure, by Level of Education 48 5.5 Estimates of Primary School Enrollments, Teachers and Total Public Recurrent Costs in China, 1982 and 2000 ........... ................................ 49 5.6 Estimates of Secondary School Enrollments, Teachers and Recurrent Costs, 1983 and 2000 .... ............. 51 5.7 Summary of Estimates of Total Public Recurrent Costs, 1983 and 2000, and Capital Equipment Needs, 1982-2000, in Education ............................ 53  - iii - Page No. LIST OF APPENDICES Appendix/Table No. Al Structure of Education in China .............................. 55 A2 Enrollment Ratios in Formal Education in China and in Other Developing Countries by Grade, 1950-83 and targets for 2000. 56 B1 Enrollment in Primary and Secondary Education by Grade, 1979-83 57 B2-B3 Number of Students, Schools and Teachers, 1979-83 .... ........ 59 B4 Student Enrollment in Various Types of Postsecondary Institutions, 1979-82/83 .62 B5 Number of Various Types of Postsecondary Institutions, by Province - 1979, 1981 and 1982 .... .64 B6 Number of Graduates from Higher Education, by Discipline, 1979-83 65 B7 Higher Education Institutions and Students, by Classification, 1979-83 .................................................... 66 B8 Students, Schools and Teachers in Nonformal Education, 1979-83 67 B9 Recurrent Educational Expenditure by the Ministry of Education, 1978-82, and State Budget Expenditure, by Activity, 1950-82 68 BIO-Bll EnroLlment in Formal Education, 1949-83, and Projected to the Year 2000 .................................................. 70 c Timetable of Preservice Primary Teacher Training Schools ...... 72 D Comparative Education Indicators .............................. 73 E Public Recurrent Costs: Estimates of Increases at the Primary, Secondary and Higher Levels by the Year 200 .75  SUMKARY 1. China's achievements in education since 1949 have been unmatched among developing countries of the same income level. EnrolLments in formal and nonformal primary and secondary education have been high by any stan- dards. The supply of teachers and didactic materials has in many respects been good and student performance, as far as can be assessed, quite high. Self-help programs in education have been more successful in China than in most other countries. The Government has been able to keep the costs of major education programs under contral, and China has - unlike the rest of the developing world - been able co introduce improvements in the education system without any serious strain on public expenditures. 2. China's education system has nevertheless had problems in recent years. Events during the Cultural aevolution seriously lowered the quality of education and sharply reduced the output of qualified manpower. Manpower shortages, affecting industry, agriculture, transportation and other economic sectors, have hampered achievement of the four modernizations. Accompanying shortages of qualified manpower has been an abundance of unqualified workers and staff at several levels, leading to low efficiency in enterprises and also in education. Since 1976, the Government has been quite successful in introducing measures to improve the output of qualified manpower and the overall education profile of China's population. 3. Over the last few years, developments outside the education sector have begun to have an impact on schooling. The change that has had the most far-reaching effect is introduction of the production responsibility system in rural areas. Linking production more to individual effort than it was in the past has apparently made rural parents, at least initially, less willing to send or maintain their children in school. En addition, new opportunities for productive work outside school may be a drain on the time and effort of locally hired teachers. Some changes have been made in the running of urban enterprises, but on a much more limited scale than the changes in rural areas. However, other changes affecting employment have also taken place: the former system of controlled labor allocation is no longer applied across the board, and some of the barriers to professional mobility and restrictions on rural-urban population movements seem to be relaxing somewhat. These changes will have an indirect impact on education because of their influence on students' job opportunities and career choices. 4. The focus on the rehabilitation of higher education during the last 7-8 years has been justified given the damage to higher education during the preceding decade. It is now appropriate to consider other parts of the educa- tion system also, to ensure that the base of the system is well developed. This annex has identified issues in general and technical/vocational education and in teacher training that will need to be dealt with during the next 15 years if the Government is to achieve its education policies and goals. Tentative estimates of future recurrent costs and investment needs have been made. These issues and prospects are summarized in the following paragraphs.  UniversaL Basic Education 5. The Government has procLaimed its goal of making six years of pri- mary education and three years of Lower secondary education universal by the end of this century. The Government is thus de facto introducing a nine-year basic education system. Based on the World Bank's preliminary projections, absolute enrollments at these levels would decrease from 174 million to 135-140 million as universal basic education is achieved, because the fertility decline is predicted to continue. Constraints on achievement of universaL basic education during the next 15 years are discussed below. 6. Enrollments have decreased in both primary and secondary education during the last few years. The intake of new students has declined more than can be explained by the reduction in the relevant age groups. Dropout rates have remained high. In the poorer regions of China, where there is little technological advance in agriculture or opportunity for nonagricultural employment, the economic returns to education must seem very low. Farmers are not convinced that there is a good economic return on primary education for their children, especially females. They see the opportunity costs of education for their children increasing with the introduction of the responsibility system in agriculture and would therefore rather keep some children engaged on the farm or in the household rather than in school. The Covernment has taken steps to reverse the decline in enrollments and reduce the number of dropouts, apparently with more success in primary than in secondary education. But increased local financial self-reliance in basic education seems to have aggravated the problems of poorer areas, where enroll- ment ard educational quality were already unsatisfactorily low. Moreover, the factors which caused the enrollment decline will persist and may present an obstacle to achieving the goal of making nine years of basic education effectively universal by the end of the century. 7. Rural parents and poor city dwellers often see education as a way out of rural life and urban poverty and as a means of achieving a higher standard of living. Reintroduction in the late 1970s of the key-school (K- school) system in primary and lower secondary education may have thwarted such expectations in China. These schools appear to favor pupils in urban areas and children of economically better off and better educated parents every- where, at the expense of pupils in rural areas and children of less prosperous and less educated parents. The K-school system perpetuates the perception among poor people of a two-track system in basic education, one elite track - mainly for urban students - which leads to further education and promising careers in adult life, and a second track - mainly for rural children - which is terminal and, furthermore, less relevant for the adult life of a peasant or urban manual worker. It is difficult to justify application of the K-school concept in basic education: research and experience in other countries indicate that it is not only inequitable but also pedagogically and econom- ically unjustifiable. More recently, Government has discouraged the designa- tion of K-sckools at the primary level. Many of them have even converted to experimental schools with additional responsibility to provide support for neighboring schools.  - iii - 8. The average Chinese pupil in primary and lower secondary education has textbooks but they could be improved in design, workmanship and content. There is a scarcity of other didactic materials and the physical school environment is often poor. FavorabLe demographic developments and financial gains that could be achieved by increasing student/teacher ratios provide an opportunity to improve the supply of materiaLs nationwide. A universal nine- year basic education system will require more and also different equipment and didactic materials. 9. Experience from other countries shows that the introduction of a nine-year basic education system requires much work in curriculum and staff development, and physical planning to achieve the objectives of basic educa- tion. One concern is the role of K-schools in a nine-year basic education system. However, the most compelling problem, and the one that could have the most severe consequences for economic growth in the long term, is the erosion of schools' holding power. The Government is making an effort to popularize education by disseminating information about its benefits in terms of increased productivity and family well-being, and these efforts could be strengthened. Increased financial support from higher levels of Government for schools in poorer areas will also be essential. Finally, the proposal to make completion of primary education mandatory has been instituted already in one province and is likely to be an effective means of improving attendance nationwide. TechnicaL and Vocational Education 10. There are few issues in general upper secondary education, one function of which is to prepare students for higher education. The Government has recently curtailed enrollments in this type of education as a means of reducing the pressure for university places. Enrollments will eventually increase again and triple the current enrollment of approximately 5.5 million students, to some 15 million, by the year 2000; this would correspond to an enrollment ratio of about 30% of the relevant age group. The quality of education offered is good, the quantity generally appropriate, and application of the K-school concept justified. 11. The situation in technical/vocational secondary education is quite different. The almost complete abolition of formal technical and vocational secondary education in China during the Cultural Revolution has caused a serious shortage of middle-level technical and managerial manpower in industry, agriculture and other economic sectors. Many technical and skilled worker training schools have now reopened and a great effort is being made to provide erposure to vocational subjects in many general secondary schools by offering courses in industry, services, business and agriculture. Advancement of the four modernizations and a tripling of GNP will require huge efforts in technical/vocational education to complement those already well underway in higher education. The specific need for technical/vocational education to support various economic sectors has onlv been marginally explored, but greater efforts in formal and nonformal agricultural and service sector education appear necessary.  - iv - 12. Technical/vocational education in China compares well with that in many developing countries at the same income leveL, and the recovery after the damage caused by the Cultural Revolution has in many ways been admirable. The system suffers, nevertheless, from weaknesses that make support of the four modernizations difficult and that increase recurrent costs and investment needs more than necessary. Since ;976, progress in developing the system has been uneven. 13. Enrollment in technicaL and skilled worker training schools run by various line ministries has decreased, while the vocationalization of general secondary education has proceeded with increasing student enrollments. Non- formal training has assumed a Large role and appears to meet half of annual training needs. The vocationalization program and nonformal training should develop further - the latter with assistance from enterprises and offered mainly on a spare-time basis - but enrollment in technical/skilled worker training schools should not be allowed to decline given the existing major manpower shortages. Furthermore, the general low utilization of staff, equip- ment and facilities in these schools suggests that they could increase their enrollment considerably, with reasonable additional costs, if they used a mixed boarding and day-school system. Better use of existing facilities would reduce, though not eliminate, the need for new buildings. 14. Attempts are being made to broaden the curricula of technical and skilled worker training schools and reduce the number of specializations offered. These changes aim to make technicians and skilled workers more flex- ible and adaptable in using new production techniques and work methods, and facilitate labor transfers and industrial restructuring. A review and revi- sion of curricula would be even more useful if accompanied by a survey of school facilities at the provincial level to assess the need for new or remo- deled facilities - particularly for technical programs in vocationalized secondary schools. 15. About 80Z of the students in China's technical schools have a Eull junior and senior secondary education as a base for their technical studies. This is a high entrance leveL, which increases costs for both the public and the students, mostly without corresponding benefits in learning or skiLls. Technical and skilled worker training schools should generally require 8-9 years of general education as a base. Shorter postsecondary courses could be justified, as an exception, for a minority of students. 16. The administrative and managerial responsibility for technical/ vocational education is divided among many line ministries and their subordi- nate agencies. This allows good vertical cooperation within the system. Horizontal cooperation between schools run by different agencies is, however, limited, which leads to underutilization of staff and facilities, duplication of teaching, and unnecessariLy large student catchment areas. 17. The Government has embarked on a program to vocationalize about 50% of upper secondary education. This program, which may cover skills for jobs in agriculture, commerce, and industry, as well as personal services is designed to alleviate apparent skill shortages as well as reduce heavy pressure on university entrance. However, the experience of other countries  v with secondary vocational education has been mixed. Such programs are of much higher cost than general secondary, but it is not always clear that they necessarily produce more productive workers, particularly in industrial trades. In some countries secondary vocational schools suffer from inappro- priate equipment and outdated curricula. There may also be a zendency, already evident in China, to overspecialize thereby limiting the adaptability and even trainability of workers at later stages of employment. A system of secondary education that achieves intermediate general qualifications might provide the required flexibility for quickly responding to the demand for a particular type of manpower and be preferable to provision of specific skill training in a narrowly defined specialization at the secondary level. These considerations suggest that the Government should proceed with caution and only after careful assessment of alternative models in China and eLsewhere. An effort at school location planning should precede full implementation of the program. To minimize costs, the Government should make full use of the staff and facilities in existing and new schools and in enterprises. Revised and broadened curricula are needed, as well as expanded and improved production of didactic material's. Finally, means of improving the status of technical/vocational education need to be found. Teacher Training 18. China employs more teachers than would be considered necessary in many countries. Student/teacher ratios are low, and teachers have correspond- ingly low workloads at all levels. Approximately one of every two teachers is unqualified according to official government standards. Preliminary projec- tions to the year 2000 show that the aggregate need for teachers in basic and upper secondary education (including technicaL and vocationaL education) would probably decline somewhat. There would be a decrease in the demand for class (primary) teachers because of the predicted enrollment decline, while the demand for academic and technical and vocational subject teachers would increase. A summary of the projections on teacher requirements is given below.  - vi - Stock and Future Need for Teachers (million) 3 years' upper secondary 9 years' basic education education Academic Vocational/tech- Class Subject subject nical subject Year teachers/a teachers/b teachers/c teachers Total 1983 stock 5.4 2.1 0.5 0.1 8.1 2000 need 3.8 2.3/2.1 1.3/1.2 0.8/0.4 8.2/7.5 Change -1.6 +0.2/+0.0 +0.8/+0.7 +0.7/+0.3 0.1/-0.6 /a For the six lower grades, i.e. the present primary schools. 7T For the three upper grades, i.e. the present lower secondary schools. 7c Includes teachers in primary teacher training schools and teachers in academic or theoretical subjects in technical/vocational programs. Source: World Bank estimates. 19. These projections suggest that the preservice training of primary teachers needs to be reduced. A large percentage of the primary teacher stock is unqualified, however, and there is a need to continue inservice upgrading programs until the end of the century. In secondary education, preservice teacher training programs would need to double their output, and this has been planned for. Current inservice training of secondary teachers would also need to continue. 20. Preservice teacher training colleges in China currently emphasize subject knowledge at the expense of teaching in pedagogy, psychology and edu- cation. This emphasis is understandable given the neglect of subject know- ledge during the Cultural Revolution. Nevertheless, strengthening of both teaching and research in pedagogy and in psychology is suggested. 21. The common administrative separation of preservice and inservice teacher training in China prevents full and efficient use of staff and facili- ties and reduces feedback to the colleges on actual teaching experience. Since China's inservice and preservice teacher training needs will vary from year to year, maximum flexibility is needed in the system. Such flexibility would be promoted by administrative cooperation. 22. Despite recent salary increases, teaching is not seen as an attrac- tive profession in China. This is a difficult issue to resolve. High quality teachers contribute more to good student performance than other inputs, and recruitment of able students to teacher training institutions is therefore a high priority. It is also important to deal with the negative influence of the rural responsibility system on the recruitment and work of primary teachers.  - vii - Costs and Financing 23. China has considerably increased spending on education during the last few years but nevertheless devotes a smaller share of GNP to education than many other developing or deveLoped countries. This is particularly true of primary education. In higher education, student costs remain high prima- rily because of Low internal efficiency. Teacher salaries are low, in both absoLute and relative terms. 24. The WorLd Bank has estimated the recurrent cost implications of ir.troducing a nine-year basic education system and a vocationalized upper secondary school system that would enroll 50% of students in technical and vocational programs. The recurrent cost of the necessary teacher training has aLso been estimated, as has the capital cost of equipment needed. The World Bank does not, however, have the requisite knowledge of existing school faci- lities to estimate capital needs for building construction or rehabilitation. 25. The Government should be able to meet the recurrent costs of a nine- year basic education system, though the recommended increases in teachers' salaries would probably increase expenditure above the current level. The vocationalization of upper secondary education will increase recurrent costs for consumables, school maintenance and teachers (even if student/teacher ratios can be increased). Recurrent costs for teacher training are projected to double, but unit costs could remain unchanged. 26. Equipment costs for the universal basic education program should be reasonable. Equipment ccsts for the vocationalization program would be high, even if cost saving measures (such as using facilities in double shifts) are systematically applied. 27. Tentative estimates (in 1982 prices) have been made of the public recurrent and capital costs of education. It has been assumed that CNP will triple by the end of the century and that teachers' salaries will increase in line with the growth of GNP per capita. The recurrent cost of education is estimated to increase from Y 14 billion in 1982 to Y 33-38 billion by the year 2000. The recommended raise in teachers' salaries relative to other wages would further increase total recurrent costs; for example, a 50% increase in teachers' salaries would add Y 9-10 billion to recurrent costs in the year 2000. The capital cost for equipment is estimated at just over Y 21 billion from 1982-2000, or about Y 1 billion per year. The cost of building construction and remodeling is likely to amount to 10Z of annual recurrent expenditure. Total annual public expenditure on education might thus amount to Y 46-52 billion in the year 2000. This figure is equivalent to about 3.1- 3.5% of estimated GNP in that year; this percentage is similar to the present allocation for education and still below the average for other LDCs (4-5%).  CHINA: ISSUES AND PROSPECTS IN EDUCATION 1/ 1. BACKGROUND 1.01 The World Bank's report entitled China: Socialist Economic Develop- ment (Report No. 3391-CHA, issued in June 1981) included an annex on education and training which described developments in education up to L981 and discussed the overall manpower situation in China. The annex covered the objectives, structure, dimensions, concenc, quality, technology, administra- cion, staffing, costs ane financing, and external and internal efficiency of current education and trainine. 1.02 The annex concluded with an analysis of the strengths and weaknesses of the system. It stated that the development of human resources in China since 1949 had in many ways been commendable. Expansion in primary school enroll- ment had made two-thirds of China's adult population Literate. The secondary school enroLlment ratio was considerably higher than that of comparable countries. Adult nonformal education, particularly programs run by industry and often executed with the help of mass media, had played an important role in improving the labor force. In many respects the quality of China's education was good. The education program had been carried out wich little foreign assistance after the USSR withdrawal in 1960. Self-help schemes were important and had been more successful than in many other developing societies. China had furthermore carried out its education programs at an affordable cost. 1.03 There were, however, problems in China's education. A serious shortage of high-level manpower in China had been caused primarily by the disruptions to university education during the late 1960s and early 1970s. The system of technical/vocational education had been unable to produce suf- ficient middle-level technicians to meet the needs of agriculture, industry, transportation and other sectors. The broad expansion of primary and general secondary education had taken place without sufficient attention to quality: there were too many unqualified teachers and too many schools without appro- priate facilities and equipment. Though the self-help schemes had many advan- tages, they had tended to increase differences in schooL quality by location, a serious question in China where rural-urban disparities were large. At all levels of the education system, internal efficiency was low as measured by the utilization of staff and facilities, and as compared with other societies. 1.04 The annex summarized its findings and recommendations by stating that: (a) expansion and improvement of higher education should be seen as the first priority, including both preservice and inservice education; 1/ This paper focuses on basic education, technical and vocational education, and teacher training.  (b) expansion and improvement of technical/vocational education was the second priority. For financial reasons much technical/vocational education would have to take place within enterprises, in addition to being offered in formal schools, and the program would have to be executed over a fairly long period; (c) teacher training wocLld be a precondition for the execution of China's education programs, and for economic, social and pedagogical reasons it should emphasize inservice training; (d) planned expansion of general education to cover the first nine years of schooling was feasible considering favorable demographic trends, but increased attention should be paid to qualitative improvement by means of improved curricula and learning materials, and an expansion of the production of didactic materials was suggested; (e) efforts should be made to improve the internal efficiency of educa- tion at all levels; and (f) the expansion and improvement of education could be achieved without increasing recurrent expenditures beyond the average range for developing countries, measured as a percentage of GNP_ Assistance for capital investments would be needed, however. 1.05 These recommendations (a) - (f) have been reflected in subsequent World Bank education lending and in the dialogue between Chinese authorities and the World Bank. Education projects approved so far cover the development of China's comprehensive universities, of higher education and research in agriculture, of health education, of the television university system and of a new polytechnic (short-term technical college) system. Proposed future activities include various universities run by technical ministries, technical/vocational education, teacher training, curriculum development and the manufacture of didactic materials, including textbooks. Recent Developments 1.06 Development of the education sector in China since 1981 has been characterized by systematic implementation of government policies and programs established in the late 1970s. The Government's major principles established at that time were stated as follows: " (a) education must be geared to the needs of socialist construction and modernization, and the proportion of expenditure on and investment in education must be adjusted and raised; (b) education is to be developed effectively and steadily in accordance with the policy of readjusting, restructuring, consolidating and improving the economy; (c) in view of the large population, and poor economic foundation, there should be priorities in the development of education and resources should not be evenly distributed among too many projects;  (d) the relationship between popularization and the raising of standards should be handled correctly; the effective universalization of primary education should be a priority, and enough attention should be given to education in areas inhabited by minority nationalities; (e) educational structure must be transformed; (f) a diversified educational system should be adopted so as to achieve greater, faster, better and more economic results in educational development; and (g) efforts should be made to raise the leveL of teachers and to further strengthen the teaching force." L.07 These policies were supplemented in 1982 with the following specific statements by the Ministry of Education to all, provincial, county and city bureaus of education: Ca) primary and secondary education should strive to develop moral, physical and intellectual capacities and should not over-emphasize examination scores. The schools should not concentrate on the graduating class and ignore the others; and Cb) key schools (K-schools) are necessary for ensuring the quality of education, However, since primary education should aim at becoming universal, there will be no entrance examination to the key schools. All students to the K-schools will be admitted from the neighborhood." There have been no major changes in these policies, though financial constraints have apparently forced the authorities to postpone the completion dates for some programs. There have, furthermore, been no major changes in the objectives, structure, content, technology, staffing, costs or financing of China's education since 1981. 1.08 While educational development has been fairly stable, changes in other economic sectors have affected the environment in which the sector functions. The most significant change, introduction of a "production responsibility" system, has occurred in rural areas (where 80% of the popula- tion lives) in an attempt to improve incentives and management at all levels of the agricultural econoury. Under this system, individual families are allocated land by the commune and then have full responsibility for farming it. The household has certain obligations (to pay their share of taxes, contribute to the welfare fund and help meet state procurement requirements) but beyond these may retain the remaining agricultural production, or sell products on the open market. 1.09 This is a significant change from the old system, under which incomes were shared more ar less equally among commune members regardless of individual productivity. For education, this change has had unexpected conse- quences. Attendance at school may now result in income foregone (children  - 4 - could instead work productively on the farm or in the house, or even tend younger children, thus freeing parents for productive tasks). In addition, locally hired teachers, who were previously given work points like other workers and shared profits accordingly, also receive a plot of land under the responsibility system; since they also farm the land for profit, this is likely to become a priority demand on their time, to the neglect of their performance in the classroom. 1.10 Similar changes have also been instituted in urban areas. but only on a limited basis, and their impact has so far been much less. A system of productivity bonuses has been introduced to link earnings to output, but earnings differentials appear to offer workers only a Limited incentive to increase productivity. Disincentives to increased productivity remain. Employment still tends to be secure. Managers have little control over the recruitment, promotion and dismissal of workers. The controls on Labor mobility promote life-time assignments within one enterprise and offer few possibilities for transferring as a reward for good performance. Workers are linked to their enterprise in many ways; pensions, housing and health care are usually provided through the enterprise. Employees may also receive education and training in enterprise-sponsored programs. This immobility of labor leads to overspecialization (a problem as China undergoes structural transformation and moves towards becoming a middle-income economy) and prevents the spread of experience and new technology. 1.11 Other changes affect employment opportunities. The system of controlled labor allocations is no longer applied across the board: it is still used for most postsecondary graduates and skilled manual workers, but not for those with limited skills; graduates from the newly established postsecondary polytechnics also seek employment independently. Enterprises may now examine job applicants sent to them by labor bureaus. The unemployed, especially the young, are being encouraged to organize small collective enterprises or create opportunities for self-employment. The hiring of labor (up to eight people) is now permitted. 1.12 In 1979, China introduced a policy promoting the one-child family, with the aim of limiting the population to 1.2 billion by the year 2000. The impact of the one-child policy already appears to be greatest in the major cities, where third order births account for less than 5Z of the total. Moreover, the responsibility system in agriculture seems to be leading to more children being born to rural families, presumably because land allocations usually depend on household size or labor force, and a second or third chiLd provides another productive worker. These developments suggest that while labor will likely continue to be abundant in rural areas, a labor shortage may occur in urban areas in the 1990s if the present restrictions on population movement are not changed (in fact some liberalization of rural-urban migration rules has already occurred to permit peasants to work in small towns). 1.13 The implementation of China's education policies needs to be seen in the context of these developments in other sectors. This annex analyzes selected trends in education and discusses the impact of some external factors on education since the first report was written in 1981. It focuses on educa- tion subsectors and issues that were either not sufficiently covered in the  1981 report or not known at that time. It reviews quantitative education developments with the perspective of the Government's policies and the population data obtained from the recent census. 1.14 Specifically, this annex first discusses the proposed introduction of a universal, nine-year basic education system. Secondly, it deaLs with the kinds of technicallvocational education offered outside the universities. Thirdly, it looks at the demand for and supply of staff in primary and secondary education and issues related to the training of teachers. The annex concludes with a review of the costs and financial issues in education. 2. UNIVERSALIZATION OF BASIC EDUCATION 2.01 The Government of China has repeatedly stressed its policy of "popularizing" primary education, i.e. making it universal. The Government also aims to make lower secondary education universal in urban areas by 1990 and nationwide by the year 2000. This in effect would introduce a universal nine-year basic education system similar to those in many developed countries. Moreover, the Government aims to make upper secondary education universal in urban areas by the year 2000, but has set no date for rural areas. 2.02 These targets will have a far-reaching impact on the primary and secondary education system. After significant expansion of both levels of education from 1949 onwards, enrollments have begun to decline in recent years, because of both lower intake and higher dropout rates. Staffing levels have not decreased commensurate with drops in enrollment, thus exacerbating inefficiencies in staff utilization. To improve school quality selectively, the K-school philosophy was reintroduced in the late 1970s, but a reaction against this policy has recently occurred. These existing problem areas in the two levels of basic education will need to be considered in light of the changes now proposed. The remainder of this chapter thus first describes in more detail the recent developments in basic education noted above. It then considers what implications these issues in basic education have for the universalization strategy and how they might be tackled as part of this strategy. The chapter concludes with a brief review of prospects for achieving the Government's goaLs in basic education by the year 2000. Recent Developments in Primary and Secondary Education (a) Enrollment Trends 2.03 Primary education expanded rapidly after 1949: enrollment, at 24 million students in 1949, had reached 136 million by 1983. The estimated  - 6 - net enrollment ratio 21 was 25Z in 1949 and, by government estimates, about 90X in 1983. The latter ratio is high for a country at China's stage of development and compares well with the average 68Z enrollment ratio for the 6- 11 age group in the rest of the developing world (Appendix A2). During the last 30 years, adult literacy in China has improved from some 20% of the population in 1949 to over 70% in L983. The Latter rate is also impressive and compares with a developing country median of 50-55Z. 2.04 A closer look at recent enrollment figures nevertheless reveals some negative developments (Appendix B, Tables 8 and 10). AbsoLute enroLlment in formal primary education peaked at 151 million students in 1975 and has thereafter decLined by about 15 million students. It was estimated that the net primary school enrollment ratio might have been higher than 90Z in the mid-1970s. The ratio leveLed out in the late 1970s, and declined during the first few years after the introduction of the peasant responsibility svstem, and has apparently begun to increase again. Enrollment in spare-time primary education for adults and teenagers who never completed their primary education went down from 21 million in 1979 to 8 million in 1983. 2.05 There remains, furthermore, a regional enroLlment gap. Although close to 90% of all children in China enter primary schooLs, only one out of four counties has achieved universal primary education. These are concentrated in cities. There is thus an enroilment gap between urban and rural areas, where some 80Z of the popuLation lives and where most Chinese will continue to live at Least until the end of this century. Just as serious are the disparities in educational enroLlment among different rural localities. In some poor areas, school attendance appears to be unsatisfactorily low, especially among girLs - and significantly lower than official enroLLment data suggest. Although enrollment statistics in all countries overstate actual attendance, and although it is not possible to assess the impact of such overstatement on China's overall enrollment ratio, measures to improve the accuracy of the statistics collected couLd assist in formulating appropriate policies. 2.06 An estimate of dropout rates in primary education can be made from the enrollment statistics by grade (Appendix B, Table 1.1). The exact percentage of full year repeaters is not known but is comparatively low in all grades, with the possible exception of the final (examination) grade. By contrast dropout rates are high. On average, one student out of ten drops out between each grade. This implies that only 65% of the students who commence Grade 1 wilL be in Grade 5 five years later. Most of the other 35X will have left school. The dropout rate for Grade 1 is particularly serious. Many rural students apparently start primary school but drop out after a few months, possibly to re-enroll in Grade 1 for the next academic year. Statistics further show that 10-15% of Grade 5 students do not graduate. The flow chart (Appendix B, Table 1.1) showing the progress of primary school pupils in 1979- 83 thus verifies the Chinese Government's "9-6-3" statement, i.e. that 9 out of 10 children commence primary education, 6 complete it and only 3 graduate 2/ The net ratio excludes, but the gross ratio includes, under- and over-age students.  i.e. that 9 out of 10 children commence primary education, 6 compLete it and only 3 graduace with good perforl wce. Understandably this waste of human resources is a cause for concern.- 2.07 if not improved, the current enrollment situation may well cause the Chinese literacy rate to stagnate around 70%. Good literacy in Chinese, a major aim of China's primary education, is said to require five years of schooling. rf this is true, only two out of three Chinese children who enter primary schooL wilL eventuaLly become literate, i.e. the two who complete five years of education. The current Literacy rate would only improve to the extent that literacy courses are organized for school dropouts, for those who never enrolled and for illiterate adults. These courses have played an impor- tant roLe in China over the last decades and had enrollments of 5.3 million students in 1983. Experience worldwide indicates, however, that the formal education of children is more efficient than the nonformal education of adults and teenagers in achieving permanent Literacy. 2.08 Development of China's formal secondary education since 1949 has in some ways been even more impressive than that of primary education (Annex B, Table 10). In 1949, secondary schools enrolled about L.3 million students, corresponding to a gross enrollment ratio of only 2%. Enrollment had grown to 68 million by 1977, with a gross enrollment ratio of about 46% based on Bank estimates of the size of the corresponding popuLation groups. The latter ratio compares favorably with the 35% average enroLlment ratio for developing countries. 2.09 The enrollment trend over the past few years has been less favor- able. Overall enrollment for formal secondary education (i.e. including both lower and upper secondary schools) has decreased from a peak of 68 million pupils in 1977 to 46 million in 1983, i.e. a decline of 32% or 22 million pupils. This corres onds to a large decline in the gross enrollment ratio (to approximately 30%).- During the same period the developing country average increased to 39% and that of the advanced countries to 83Z. 2.10 Enrollment decreases over the last few years have been similar at the lower and upper secondary levels. In 1979, lower secondary education enrolled 46 million students, which corresponds to a 63% gross enrollment ratio for the 12-14 year age group, based on current World Bank estimates of China's population. Enroilment decreased to 38 million students in 1983, or 46Z of the relevant age group, i.e. a reduction in the enrollment ratio of 17%. 3/ China's primary school pupils nonetheless perform better than primary school children of the same age in LDCs with the same income level, where completion rates are often below 50%. 4/ 34% if students in extended primary schools at the lower secondary level are included.  - 8 - 2.11 In upper secondarv education, the ongoing conversion from a two-year to a three-year system has not prevented a dramatic decrease in total enroll- ments. Enrollment in all formal upper secondary education (including technical and skilled worker training schools, and primary teacher training schools) was 14 million in 1979, corresponding to 36% of the 15-16 year age group; in 1983, enrollment had been almost haLved to 8 million students, or 16X of that age group (or only 1OZ if the three-year age group, 15-17 years, is taken). 2.12 Intake of new students has declined and dropout rates have gone up during the last four years. Enrollment in lower se::ondary Grade I was 18 mil- lion in 1979 but declined to 14 million in 1983. The transition rate from primary to lower secondary education went down from 83Z in 1979 to 65Z in 1983. Since available data indicate no major changes in the size of the relevant age group during this period, the decrease must reflect a reduction in the number of primary scnool graduates applying for further education. The decrease :s said to have caken place primariLy in rural areas. Dropout rates between grades have continued to be high, averaging 12% between Grades I and 2, and 22% between Grades 2 and 3 during 1979-83. At the upper secondary level, the intake of new students declined from 7 million in 1979 to less than haLf that figure in 1983. The transition rate from lower secondary to all types of upper secondary schools was 37% in 1979 but decreased to 24% in 1983. A reduced intake to general upper secondary education reflects (in contrast to the situation at the lower levels) at least partially the Government's policy of diverting students from academic to technical/ vocational fieLds, thereby reducing pressure for university places. The intake of technical schools of different kinds has, however, not yet increased enough to compensate for the drop in the intake to general upper secondary schools. The few data available indicate that dropout is less of a problem in upper secondary education than in primary and lower secondary education, averaging 9% between grades during 1979-83. Failure rates in the final examinations are about 10% or less. 2.13 During this period of decline in formal secondary school enrolLments, enrollment in nonformal secondary education has increased from 4.7 million to 9.6 million (1982). But the 4.9 million increase in nonformal secondary enrollments was not sufficient to offset the 22 million decline in formaL enrollments during 1977-82. Moreover, the nonformal system caters pri- marily to young adult workers (to make up for missed educational opportunities during Lhe Cultural Revolution), rather than providing additional skilled labor. It is, in addition, generally more costLy to provide secondary educa- tion to adults than to teenagers, because of income foregone and other econo- mic factors. Thus China's well-developed system of nonformal, in-service secondary education can compensate for lost educational opportunities and up- grade the labor force, but it can only partially substitute for a well- developed, formal, preservice system. (b) Staff Utilization 2.14 In view of declining enrollments, efficiency in teaching staff uti- lization has worsened at both the primary and secondary levels. Primary school teaching staff has increased slightly while enrollment declined by  -9 - 11 million students during 1979-83. The student/teacher ratio has consequent- ly gone down from 27:1 in 1979 to 25:1 in 1983 (the median ratio for other LDCs is about 35:1). The class size has been kept almost constant, at around 34, which implies that teachers' weekly workload - by international standards, already a low 20 periods - has gone down further. The number of full-time administrative staff has also increased by 28X (to over 0.6 million) despite a 6% reduction in the number of primary schools. 2.15 Similarly, at the secondary level, while enrollments in Lower secon- dary education decreased by over 17% during 1979-83, teaching staff only decreased by 10X, which implies that the student/teacher ratio decreased from 19.2:1 to 17.6:1. In general upper secondary schools, enroLlmencs -were rough- ly halved, while teachers declined by only 21%, and the student/teacher ratio consequently decreased from 19.4:1 to 13.9:1. Similar developments reduced the ratios in primary teacher training from 14.0:1 to 11.3:1, in technical schools from 8.6:1 co 5.9:1 and in skilled worker training schools from 11.6:1 to 6.2:1. These ratios might be compared with a median of 21:1 in other developing countries. As in primary education, these low ratios are caused not by small classes but by low teacher workloads, which average 10-12 periods/week (20-25 periods/week are common in advanced countries 57). 2.16 Low student/teacher ratios could be justified if they were proven to improve tgaching. In fact larger workloads with fewer, but better-qualified, teachers - might enhance teaching in China despite comparatively large class sizes. Relative staff increases at all levels of basic education are therefore difficult to justify from a pedagogical or from a financial point of view. (c) The K-School Philosophy 2.17 The rapid expansion of primary and secondary education in China in the late 1960s and early 1970s led to a serious deterioration in school quality. Many teachers were unqualified and many schools lacked facilities and equipment for even basic teaching; this situation persists today. During the late 1970s, the Government considered it necessary to take drastic mea- sures to improve school quality by providing better inputs to the system. As it was financially impossible to do this nationwide, it was done selectively, by reintroducing the K-school concept. A few schools in each province and county were designated as K-primary and secondary schools; they were allocated extra funds (their funding was 2-3 times that of regular schools) and provided with better facilities, didactic materials and teachers. K-schools enrolled the best students and through rigorous efforts by the staff provided them with an excellent education. The K-schools set standards for other schooLs but 5/ A survey in one European country showed that its teachers nad among the lowest annual workloads of public employees despite a weekly load of 21-30 periods. 6/ The proportion of unqualified teachers is said to be 40-50% in primary schools, 70% in lower secondary schools and 40Z in upper secondary schools.  - 10 - mainly prepare their students for further education (the K-schools can almost guarantee their students eventual entrance to institutions at the next level of education) and could, for example, offer instruction in foreign languages, which because of teacher shortages may not always be possible in regular schools. 2.18 Some regular schools applied the K-school philosophy by opening K-classes. This development led to an overemphasis on preparing students for further education and on the performance of the most able students. Insuffi- cient attention was paid to preparing less able students for adult life, so that average or below average students lost interest in their schooling. The gap between high and low performers increased. By the early 1980s this led to a reaction against the most extreme application of the K-school concept and some of the more negative consequences at the lower education levels have been eliminated. Intraschool streaming and establishment of K-classes have now been stopped. Moreover, student intake to K-schools has been localized and student catchment areas have been reduced. Through administrative action supported by provincial education bureaus under MOE, the K-school concept is being redefined as a vehicle for diffusion of improved curricula, materials and teaching practices to local schools. K-schools now comprise IZ of primary and about 4% of secondary schools; K-students may amount to 5% of all students at the primary and secondary levels (counting both K-schools and K-classes). Issues for Basic Education Strategy 2.19 Introduction of a nine-year system of basic education poses problems in light of the recent developments in primary and secondary education discus- sed above. A fundamental question, however, concerns the aims of universal education in China and the best means of achieving them. Continued concern and remedial action with respect to enrollments and dropout rates is required. If the recent pattern of a decline in school attendance that followed in the wake of the reforms in the rural economy were to persist, this could seriously imperil efforts to universalize basic education. (The related problem of increasingly inefficient staff utilization is considered in depth in Chapter 4, which assesses the future demand for and supply of teachers in basic education). A second issue concerns the role of the K-schools and their appropriateness in a nine-year basic education system. Finally, implementa- tion of the Government's basic education strategy poses several management problems. These issues are discussed below. (a) Aims of Basic Education 2.20 In China, as in most other developing and developed countries, basic education has two major objectives. It should first educate the majority of pupils for adulthood and their life in society. It might be the only, and therefore terminal, formal education for most pupils, who are mainly the children of farmers and of unskilled workers in industry and the service sector. Appropriate mastery of speech, reading and writing of the mother tongue and a competent handling of basic mathematics have been the cognitive skills that basic education has inculcated into pupils. The socializing task is also important and includes familiarization with behavior and beliefs that society considers important. Second, basic education should also prepare able  - 11 - students for further studies at the secondary level, and possibly in universi- ties, and eventually for leading roles in their communities. 2.21 It has frequently proven difficult to arrive at a reasonable balance in these two objectives. Countries have attempted to achieve the dual objec- tives of basic education in different ways. Some have favored offering students study electives during the last few years of basic schooling. Students not interested in further education can take Less demanding courses (e.g. an easier course in mathematics) or even drop subjects (such as foreign languages), and also choose prevocational subjects. Students wanting to pur- sue further education can focus on pureLy academic courses. This type of system seeks to group students by their objectives rather than their ability, but is nevertheless believed to lead to ability streaming. It is claimed that no study program in a basic education system should be terminal, but all programs should allow students to pursue further education, if necessary with remedial or preparatory programs. 2.22 A basic question concerns the ultimate disposition of lower secon- dary school graduates. The transition rate from lower to upper secondary education has decreased during the last few years (para. 2.12). Thus the per- centage of lower secondary graduates entering the labor market with no job training is increasing, and universalization of lower secondary education is likely to accentuate this trend. 2.23 Similarly, as universal education is extended, even partially, to the upper secondary level, the appropriateness of the present academic empha- sis of secondary education will need to be reviewed.7/ At this level, preparation for the university entrance examination has been a high priority, as shown, for instance, in the introduction of a three-year curriculum. This has led to an overemphasis on examinations and on subjects examined for university entrance. Students who enter university are reasonably well prepared for advanced studies, at least in natural sciences and in engineer- ing, but they comprise only a small minority of all academic secondary school graduates (10-15%). As a second best choice, another 10-15Z of graduates enter postsecondary technical schools. The remaining 70-80% of graduates leave school with a general education but no other job preparation. 2.24 The Government is therefore faced with the need to provide graduates with training to benefit society and the country's development, but it cannot meet the educational and vocational aspirations of all students. It is seeking the structures, curricula and selection methods that would best achieve a reasonable balance between the demand for and supply of secondary education and minimize pressures for further education. A vocationalization 7/ Only some 20% of upper secondary school students in China are in technical/vocational education, compared to 40-50% in some advanced and newly industrialized countries.  - 12 - program 8/ for upper secondary education represents the Government's major initiative in response to this issue. The program will be discussed in Chapter 3. (b) Demand for Basic Education 2.25 As noted earlier (paras. 2.04 and 2.09), the decline in enrollments, that continues most clearLy at the lower secondary level, may make the Govern- ment's targets for universal education difficult to reach. They could delay the achievement of full literacy and, in the wider perspective, jeopardize achievement of the four modernizations. A better understanding is needed of the factors that have contributed to the recent decline in enrollments, part of which is due to traditional attitudes about the value of education and part to policies in other economic sectors. The Government has taken action to reverse the present trend, and further actions that could make basic education more attractive and promote attendance are also described below. 2.26 Successful primary education can lead to further education and even- tually to a socially and economically better Life, and this continues to be a power.fuL reason why poor peasants and people from other economically deprived groups accept great sacrifices to send their offspring to school. In this respect poor people in China differ in no way from those in other countries. But whiLe education is perceived as a way to a different and presumably better life, the current stratification - in access to and in the quality and goals of basic education in China - may serve as a disincentive to attendance for those at the bottom of the system, i.e. in the rural areas. (Student performance, rather than attendance, is the main concern for city schools). The occupational rigidity and geographic immobility of Chinese citizens, particularly in rural areas, further reduce educational choices. Primary schools are a local responsibility and a family is limited to the schooling available locally. Rural parents are generally well aware of the limited opportunities for their children to advance to further education and may see little use in their children attending a primary school with this aim. 2.27 ImplementatiGn of the agricultural responsibility system (paras. 1.08-09) has further reduced the holding power of many rural primary schools. Under this system, more farm work and increased production directly increase family incomes, so many rural parents prefer to have their children work on the far7 or in the household rather than go to school. The responsi- bility system,9 which in itself is sound, has unintentionally reinforced the perception common in rural areas of LDCs that the income foregone in sending 8/ Under this program, some generaL upper secondary schools will offer classes in technical/vocational subjects, while maintaining programs in academic subjects, and others will be fully converted into "vocationa- lized" secondary schools that offer only technical/vocational programs. 9/ The negative impact of this system on the quality and motivation of locally hired teachers, together with ways of reversing these developments, is discussed in paras. 4.35-37 below.  - 13 - children to school - instead of having them tend domestic animals, do simple work in the fields or just look after younger children - is not compensated by possible future income increases because of literacy and numeracy. Another disincentive is the direct cost of education. Students usually pay a few yuan per bemester for textbooks and tuition. Some especially poor students may be exempted. This may seem Like a minor cost, but many parents, particularly in poor rural areas, may feel that it is more than they can afford and not worth the investment. Moreover, fees in some areas have apparently recently increased as a result of increased local financial self-reLiance in basic education. 2.28 PhysicaL inaccessibility is also a constraint to universalization of basic education. Many areas in China are densely populated, so that schools are close to children's homes and easily accessible. But in other areas - not just in the North or Northwest - students would have to walk long distances to get to schooL. A long distance between home and school has been found to be a serious deterrent to school attendance worldwide. Since 1979 the Government has closed some 58,000 primary and 47,000 secondary schools primarily because of their low quality. These closures have probably increased school inacces- sibility in many places. 2.29 Recent Government Actions. The Government, through the information units at the township level, is trying to popularize education and relay find- ings about its profitability and other benefits. Research in other countries on the value of education has concluded that literate farmers are more produc- tive farmers and more efficient in the management of farm resources. A prime factor in increased productivity is that educated farmers tend to be more willing to adopt new inputs and to use them more efficiently. On average, farm production is said to increase by about 9% as a result of a farmer having completed four years of primary education rather than having no schooling. Moreover, farmers with a secondary education appear to do even better under the new responsibility system than those with only a primary education. Other studies have indicated that education also affects in other ways the well- being of society as a whole. Literacv among females can have a positive influence on infant and child mortality, as well as on children's nutritional status. It can also affect fertility, by changing demand for children and contraceptive acceptance. In addition, children of better educated mothers generally perform better in school. 2.30 The Government has also attempted to promote school attendance by allowing class schedules and academic years to be changed to accommodate the employment needs of the agricultural seasons. School holidays have been moved and school days shortened. Spare-time primary schools have been established and itinerant teachers hired. (These teachers serve mountain villages with few children, by holding cLasses during a morning shift in one village and an afternoon shift in another.) Some counties report that these measures have increased enrollment. (See also para. 2.39.) 2.31 For some time, the Government has been considering making attendance at primary schools mandatory. Policies to make education compulsory were adopted by the industrialized countries early in the development of universaL basic education; similar policies were adopted by many developing countries in  - 14 - the 1960s and 1970s. These have met with varying success, depending largely on the methods and effort of enforcement. In China, a policy of mandatory completion of primary education has already been adopted by Jiangsu Province; parents mu,t pay a fine if their children are not allowed to complete primary education.-