China's vocational and technical training

Polcy, PlanaJog, and Rewch WORKING PAPERS Educatlon and Employment Population and Human Resources Department The World Bank June 1988 WPS 18 China's Vocational and Technical Training Harold Noah and John Middleton China is reforming its vocational and technical education and training to meet the skilled labor requirements of a changing economy. The Policy, Plnning, nd Research Complex distributes PPR Working Papem to disseminate thefindings of work in progres and to encouage the exchange of ides aongg Bank gtaff and all othes intrested in development issues. These pape carry the names of the authors. relect ondy their views, and should be used and cited accordingly. The findings. interpretations, and conclusions ae the authore own. They should not be sttibuted to theWorld Bank. its Board ofDirecton, it management, or any ofits meber ountries.  Polat nning, and Re reh Education and Employment To attain the number of skilled and semiskilled enrollment in vocational and technical schoois workers needed for its projected development, - to support the goal of expanding the service China must give higher priority to vocational sector and self-employment. The overall pattern and technicai training and education. will be to strengthen the free-standing secondary technical and vocational schools; to introduce Enterprises are being asked to implement a vocational programs in the general education policy of "training before employment." Rather high schools; and to develop enterprise-based than hire and train unskilled workers assigned to skilled workers schools. them by government labor bureaus (the previous system), managers are now expected to require The core system of lifetime employment is appropriate training credentials of new employ- to be replaced by a system of contract labor, ees. permitting managers to hire workers for fixed periods a%.J allowing workers limited latitude for Until now, vocational and technical educa- negotiating compensation and terms of employ- tion has regularly been underfunded by govem- ment in return for surrendering tenure. (The old ment and provided by enterprises. This tradition system of low, nationally determined wage of enterprise-based training reflects a link scales .emains in place; whether and how a between training and industry that many indus- system of bonuses will be used to improve trial nations are only now trying to establish. But worker-manager incentives remains to be seen.) this training has generally been inefficient, overspecialized, and far too time-consuming for This paper is a product of the Education and what it accomplished. E-mployment Division, Population and Human Resources Department. Copies are available free Authorities in Beijing are encouraging from the World Bank, 1818 H Street NW, provincial, county, and municipal authorities to Washington, DC 20433. Please contact Workie attain 50% enrolment in secondary schools of Ketema, room S6228, extension 33651. general education and 50% (greatly increased) The PPR Working Paper Series disseminates the findings of work under way in the Bank's Policy, Planning, and Research Complex. An objective of the series is to get these findings out quickly, even if presentations are less than fully polished. The findings, interpretations, and conclusions in these papers do not necessarily represent official policy of the Bank. Copyright 0 1988 by the Intemational Bank for Reconstruction and DevelopmenvThe World Bank  Contents Pajr* I. INTRODUCTION 1 The Context of Economic Reform 3 Labor Market Implications 3 Links to Vocational Education and Training 6 Three Issues 9 II. PLANNING 12 The Structure of Secondary VTE 12 Planning Units 15 Planning Method 16 Demand Planning 17 Supply Planning 18 Planning in Hubei Province 18 Planning in Liaoning Province 25 Curriculum Planning 30 Financial Planning 32 Characteristics of Planning 33 III. LINKAGES BETWEEN VTE AND LABOR MARKETS 34 IN TWO PROVINCES IV. SOMlE COMPARATIVE PERSPECTIVES 40 Increasing the Vocational Content of 40 Secondary Schools Location of VTE 42 Manpower Forecasting and VTE Planning 46 V. SUMMARY AND CONCLUSIONS 49 References 55 This paper was prepared by Harold Noah, Professor of Economics and Education at Teachers College, Columbia University, and. John Middleton, Senior Evaluation Officer in the Education and Employment Division of the Population and Human Resources Department at the World Bank.  Fitures and Tables Table lt Education Level of the Chinese 2 Labor Force, 1981 Figure l The Structure of Secondary VTE 12 Table 2: Secondary Vocational and Technical Training 13 Institutions and Enrollment: 1985 Figure 3: Secondary VTE Policy Documents 16 Table 3: Enrollment Planning, Hubei Province 19 7th 5-Year Plan for Vocational and Technical Educational Development, 1986-1990 Table 4: Skill Composition of the Labor Force, 24 Shashi City, 1984 Figure 4: VTE Planning Process in Liaoning Province 26 Table 5: Applications, Intake and Examination Cut-off 29 Scores, Anshan City Secondary Education Table 6: Distribution of Curriculum Specializations 31 By Type of School & Sectoral Relevance, Hubei, Shaanxi and Liaoning Provinces, 1986 Figure 5: Labor Market Linkages in Liaoning Province 36 Figure 6: Location of VTE 43  PLANNING AND LABOR MARKET LINKAGES IN CHINESE SECONDARY VOCATIONAL AND TECHNICAL EDUCATION IJ INTRODUCTION China has embarked on a series of reforms designed to improve the efficiency of productive enterprises through the introduction of elements of a competitive market economy. Vocational and technical education and training (VTE) is to be expanded and improved to meet the skilled labor requirements of a changing economy. The efficiency of the VTE system in meeting changing requirements for skilled labor depends in large part on effective planning and linkages with employment. This study analyzes VTE planning and labor market linkages in the context of the economic reforms, and in comparison with the vocational education and training systems of other countries.* The discussion is constrained by several lim. Firsts the focus of the larger study of which this forms a part han 1been on training and education for employment in industry and the tertiary sector only, plus some training for self-employment. Hence training for agriculture and rural employment has not been addressed. As 61 percent of China's population lives in the rural areas of the country, the special focus of the larger study constitutes an important limitation. *This analysis has been undertaken as part of a larger World Bank study of VTE in Cnina, and is based on interviews with Chinese officials at various levels, a survey of schools in three provinces, observation of VTE institutions and enterprises in two of the three provinces, and review of relevant literature.  In 1981, the labor force in China totalled 452 million, out of a population of 990 million. Of the 452 million persons in the labor force, 70 percent (316.4 million) were engaged in agriculture; 9 percent (40.7 million) in heavy industry; 6 percent (27.1 million) in light industry; 10 percent (45.2 million) in services (which includes education, health, public administration, dafense, commerce, housing and miscellaneous services); and 5 percent (22.6 million) in infrastructure (which includes electricity, construction, and transport (World Bank, 1985s 40). As of 1981, the Ministry of Education estimated the status of the total labor force with respect to training, as shown in Table 1: Table 1s Education Level of the Chinese Labor Force, 1981 Education Level Z of total labor force Higher 0.5 Technical Secondary 0.9 Senior Secondary 6.7 Junior Secondary 20.5 Primary 37.8 Less than primary 33.7 Source: World Bank, 1983: 137. This report is concerned with the 0.9 percent reported on the second line, plus some undefinabile fraction of the 6.7 percent on the third line, who were given vocational education in senior secondary schools. A fair estimate is that we are dealing with technical and vocational education arrangements that have involved about 2.0 to 2.5 percent of a labor force of 500 million, or between 10 and 12.5 million workers. Other workers have received some technical or vocational training on-the-job or in association with their work. It was reported to us that China has some 400,000 firms (of which 6,000 are designated as 'large"), employing 70 million workers. Many of these firms, but especially the large ones, offer in-service training to their employees. No estimate can be given of the number involved in such training not leading to a formal c.;edential. Second, the study has been restricted to secondary level training and education. -2-  Third, although various secondary sources pertaining to VTE in China have been consulted, data gathering in the field has been focused on only two provinces, Liaoning and Hubei, both rather well developed by Chinese standards. Liaoning, in particular, is heavily industrialized. Thus the description, analysis and conclusions below must be interpreted cautiously for China as a whole, and then only for urban training for industrial and service sector employment and self-employment. Lastly, vocational and technical education in the two provinces studied represents the current system at or near its strongest. Thus any analyses or conclusions which rely primarily on data from these provinces should be taken as relevant to possible policy directions for the better developed areas of China in the immediate future, though they may also be broadly indicative of directions for the system as a whole over the longer term. The Context of Economic Reform China's economy has been the object of many rapid and far-reaching changes in direction since 1949. Current reforms have led to sign'ficant changes in both the rural and urban economies. While the government asserts that China will remain solidly within the socialist form of society, it has nevertheless mandated changes in the forms of economic control bearing many esf'ential hallmarks of a competitive, market economy. China in 1987 thus stands poised somewhat ambiguously between its heavily controlled, orthodox-socialist past and a more loosely managed, experimental market-socialist future as it establishes a "planned commodity economy." China's long-term plan for economic growth emphasizes increased investments in new technology and incre_sed efficiency of enterprises. An economy historically dominated by agriculture and industry is to be diversified by expanding the commercial and service sectors to create revenue and employment as well as to support a number of reforms aimed at establishing opea commodity and labor markets in at least a portion of the economy. Current economic reforms are directed toward establishing the profitability of enterprises in a more competitive environment as the prime criterion of success. Enterprises are to be allowed to retain a larger share of profits for investment in the firm and worker incentives. At the same time, enterprises, even those owned by the State, are to be allowed to go bankrupt, if they remaiv. unprofitable over a relatively long period. In addition, a revival of the private sector of the economy is being encouraged as an important sector in its own right, and as a valuable spur to greater efficiency in the State-and collectively-owned enterprises. Labor Market Implications In general, managers report that they ea3 short of adequately skilled labor, and overwhelmed by abundant supplies of inadequately skilled labor. At the same time, pre-employment training opportunities in secondary vocational and technical schools have been severely -3-  restricted, relative to the demand. There is exceptionally keen competition to win a training place (not infrequently ratios of 5 or more applicants for every place available are cited), and newly trainei youngsters find it relatively easy to secure a job. The reforms point to some important changes in hiring practices. In principle, the core system of lifetime employment has been abandoned for all newly hired employees, and is to be replaced by a system of contract labor, permitting managers to hire workers for fixed periods (usually a ast five years), and allowing workers some latitude to negotiate c%'Em 'viation and conditions of employment in return for surrendering tL. Are. Instead of having ta rely on, or simply accept, labor assignad to them, firms are encouraged to hire from the public, using examinations, a mechanism of some importance for increasing managers' selection powers. At the same time, enterprises are b1eing asked to implement a policy of "training before employment". This is said to represent a shift away from previous practices, in which enterprises might hire an unskilled individual (often a current worker's child, or the child of someone else with "connections"), and then arrange for his/her training. Now, to become a candidate for a job, the youngster is supposed lirst to show an appropriate credential from education or training. Often such candidates are required to compete for employment through the enterprise's own examination and interviewing process. A new institution, the Labor Service Company, has been established. Set up originally to register job-seeking youth, the LSCs have gone far beyond this original mandate to establish a wide range of enterprises, to provide training and employment, both for workers in their own firms and to prepare workers for employment elsewhere. Training of this sort qualifies under the "training before employment" policy. These reforms represent significant departures from the previous system of life-time employment and job assignment by government labor bureaus. However, a number of elements of the prior system remain, both formally and in the orientation of firms. The nationally determined wage scales remain in effect. These provide meager within-scale salary differentials between levels of skills. The differences among the two major scales (for workers and managers/ professionals) are also small. Combined with very slow promotion, this compressed wage structure provides few financial incentives to workers to raise their levels of productivity. The uniform wage structrre further restricts the ability of enterprises to use wage differentials to attract workers from other entities, a factor which contributes to very low worker mobility. Firms have been given much more freedom to use bonuses and benefits as incentives. Bonuses average between 10 and 18 percent of the wage bill, though they can go as high as 40 percent (King, 1984, p. 62). Thus bonuses can provide managers with a potentially important - 4 -  set of incentives. At the same time, traditions of equal bonuses and the difficulty experienced by managers in linking pay to productivity in a clearly objective manner serve as constraints on aggressive incentive systems tied to productivity. Thus, three characteristics of the Chinese labor market have contributed to the severe shortage of trained labor. Because skilled labor is relatively cheap, managers have had little incentive to economize in their use of such labor, whether produced via pre- or in-service training. Second, it has been usual for managers to assign workers to training, rather than workers volunteering. Hence, workers may lack incentives to master new skills. Third, managers were neither required to make a p:ofit, nor permitted to retain much if they did. The material incentive to raise the productivity of labor via training, or otherwise, was consequently weak. Under such conditions, it would be strange indead if the labor market did not show the severe imbalance that is reported between the supply of and the demand for skilled labor. Links to Vocational and Technical Education The current watchwords in both economic reform and in the arrangements for training are "decentralization" and "devolution of authority and responsibility". After a generation of trying to control the labor market and the provision of vocational training from Beijing, the change to decentralization is striking in both its extent and its pace. The State (i.e., the authorities in Beijing) are encouraging Provincial, county, and municipal authorities to set their own pace and sometimes their own means for attaining centrally established goals. Thus, the goal of 50 percent secondary school enrollment in vocational/technical schools and 50 percent enrollment in schools of general education will be achieved by the provinces, and by the localities within these provinces, at quite different speeds, and in markedly different ways. Some will emphasize the development of the Secondary Vocational Schools (SVS) under the direct control of the Education Bureaus; others will build more heavily on existing facilities and will extend their Secondary Technical Schools (STS).* In all cases, the mandate is to pay close attention to what the employers say they need, and act accordingly. It is also the government's hope that the emphases on profitability and local authority and responsibility will help break down some of the compartmentalization and segmentation that have been notable features of the system of production, the labor market, and the training institutions. Chinese commentators refer to the "vertical" * Nomenclature is a persistent problem for the foreign observor of these schools. The Chinese term for what are called Secondary Technical Schools translates as "Secondary Specialized Schools". These include teacher training schools. - 5-  arrangement of their society, by whliah is meant that economic and educational institutions try to be as self-sufficient as possible, reaching backward into activitles that will protect the quantity and quality of their inputs, And forward to insure outlets for their products. The government has identified as ore of its more general goals the promotion of a greatly enhanced degree of "horizontality", urging enterprises to reduce their autarchic practices, to foster trade with independent supplying enterprises, and to support the extension of independent wholesale and retail trading. In these early stages of reform, the practical results of such exhortation are still quite limited. The effects of this predilection for self-sufficiency have been very marked in the realm of vocational education and technical training. We describe below the intricate divisions among training institutions, sponsoring enterprises and agencies, and government oversight bureaus. Their complexities are not easy to grasp, but their existence has clearly much to do with the fact that the major industries of China have felt themselves unable to rely on others to supply them with even the minimum quantity and quality of skilled and semi-skilled labor they needed. In that sense, it is difficult to talk of a 'market' for such labor, as that term is used in Western industrialized economies. China's arrangements for VTE are marked by the exceptionally large share of the total effort that is made by the enterprises themselves. While other countries, for example, Britain, France, and the United States, are trying to find ways to involve employers more closely with secondary education in general, and VTE in particular, China has already concentrated over half of its secondary VTE enrollments in establishments with close ties to enterprises (STS and Skilled Worker Schools), and the others in schools (SVS) that have every incentive to build those ties. However, enterprise-linked schools have been charged more with the provision of pre-service, rather than in-service, technical training of skilled and semi-skilled workers, and this has had severe onsequences for the overall level of technical skills embodied in China's work force. Over and over again we heard that the quantity and quality of China's skilled and semi-skilled manpower are grossly inadequate, especially for staffing the industrial and commercial development that is being projected: "The work force is characterized by a low percentage of skilled workers, technicians, and trained managers... (World Bank, 1985, p. 24). Present inadequacies may be attributed partly to the political tunmoil affecting all of secondary education during the Cultural Revolution, but this is not the whole story. - 6-  For reasons that are dee"ly root&d in the Chinese economy and polity, pre-service vocational and technical education has a history of severe underfunding by government, an underfunding that has more than offset the efforts (also insufficient relative to the needs of the economy) of the enterprises (Orr and Orr, 1985, p.1; World Bank, 19b3a, pp. 138-139). Moreover, enterprise training resources uiave not been employed efficiently: 1. training has been located in units that are probably too small to capture economies of scale; 2. curricula in technical training are severely specialized and narrow; 3. in the past a large part of training resources has gone to support remedial general education and political and ideological educationg 4. even now, training resources of firms must be devoted training workers after they have been hired, but befo, they begin work, because their pre-service training has been inadequate. It is estimated that this affects 6 million workers annually; 5. the time taken to complete courses is excessive by international standards, with trainoes taking three or even four years to cover material that is encompassed in at most a year or 18 months in Western industrialized nations; For more details and substantiation of these comments, see the recent report on internal efficiency of the training system in China (McGough, Cochrane, and Leung, 1987). Despite these elements of inefficiency, more generous levels of investment in education and training closely oriented to the needs of the economy would presumably have yielded sizeable returns to society. There has been a striking contradiction between the national interest which called for a greater training effort and the national practice of less than adequate commitment of resources. The explanation for this contradiction probably lies in the strongly egalitarian emphasis of China's Communist Party ideology, an emphasis that has been substaitially modified in only the moat recent years, and is still not withou4t its determined defenders. China has followed the familiar socialist path of establishing highly specified, and firmly implemented, schedJ'-s of salaries and wages, bonuses, and fringe benefits. (See Byrd a&.i Tidrick, 1985: 28-31, for a discussion of labor incentives.) Workers have become accustomed to being paid at fairly uniform and stable rates irrespective of their own performance, or the performance of the unit to which they are attached. - 7-  On the enterprisea' side, however, the existence of a tied labor force and a compressed wage strueture could be expected to encour-ge the supply of training. The Chinese manager has been in the enviable position that a worker, once trained, could rarely quit to go to another job. He would have to get permission from both his present manager and the local Labor Bureau. These permissions have been hard to obtain. Moreover, the locked-in worker did not have to be automatically raised in grade-level, simply because he had successfully completed a course of in-service training and had raised his productivity. Even If he were raised in grade-level, it would still be possible to pay him at the previous rate. And even if he were paid at a higher rate, the Increment would be typically modest: "... since (5257) wages have been frozen for long periods of time and promotion of individual workers on any principle other than length of service has been rare." (Byrd and Tidrick, 1985: 28). All of this should have led to abundant investment in training by the enterprises. Yet, it has not happened, perhaps because managers have not been able to retain or use the profits that might arise from increased worker productivity. An important brake on enterprise-financed training has been the Mini-try of Finance's power to define and approve allowable expenses of enterprises. These controls have been by no means generous toward vocational education and training, and they have effectively undercut what might otherwise have been a strong supply of training opportunities. Chinese enterprise managers drew the conclusion that the government preferred the combination of low individual worker produictivity and large numbers in employment to the alternative combination of higher worker productivity and lesser total employment. In addition, the Chinese enterprise has traditionally served multiple objectives, of which profit is only one. Providing employment has been an overriding social goal for more than three decades, as has worker welfare. Given the Party's commitment to full employment, and given the isolation of Chins's economy from the rest of the world, the relative neglect of vocational and technical training has had about it a certain rationality, however damaging it may have been for medium and long-term development prospects. The signals from Beijing have now changed. In a China that is open to the world, and that must compete on world markets for customers for its products, the skill-levels of workers are critical factors. Education in general, and vocational and technical trainiag in particular, are to be given much higher priority, but as yet it is too early to say whether the controls which have inhibited factory managers' training initiatives in the past will be rapidly and effectively swept away. As these controls are relaxed, and the potential grows for increased worker mobility, questions regarding the incentives for workers to take training may arise. Currently, workers are assigned to training by managers. Given little opportunity for changing jobs and few alternatives for the use of their time, workers accept training as an integral part of their work. Relaxation of restrictions on labor mobility may increase workers' willingness to seek training that is -8-  seen as likely to result in higher earnings. But greater labor mobility is also l'kely, pari passu, to reduce the enterprise's willingness to offer training. Three Issues Three linked issues emerge from the economic context. I. The first concerns the implication of economic reforms for labor markets and hence for VTE policy: to what extent will the reforms lead to increased labor mobility and truly competitive labor markets? And, if these do appear, what will be their effect, in turn, on the willingness of enterprises to _ontinue to finance and provide training under conditions of higher labe-r mobility? (This last question has already received substantial attention by Orr and Orr, 1985.) Evidence from Liaonint and Hubei provinces can provide some partial answers to these questiorns. On the basic question of whether the reforms will significantly increase labor mobility, managers did not appear to believe that this would become a seriour problem (or, for that matter, a substantial benefit). --e manager of an enterprise in Liaoning with 6,000 workers felt - labor mobility within the region might I.crease somewhat, but now. enough to cllow him to attract sufficient numbers of skilled workers from elsewhere. Moreover, the enterprises with relevant skills were all under the same technical ministry and industrial bureau. Herce, mobility within the industry would not represent either a net loss or net gain. In Wuhan, another factory manager was more concerned about the problems he faced in finding work for young people who had been assigned to him (after he had lost no fewer than 4,000 employees to retirement, over half his total staff, in 1984), than about labor mobility. Strongly in evidence was the traditional view of factory employment as a lifetime commitment by the worker to a specific factory, and by the factory to each worker. In Beijing, officials doubted that the newly-introduced contract labor system will have any major impact on the structure of the indastry's labor force for anoth_r 5 to 10 years. Even then, very little mobility of labor across geographic areas was envisaged, partly for cultural reasons ("the Chinese worker is reluctant to move from his native city"), partly for institutional reasons (he has his living quarters, pension, children's education, and wife's employment all tied to his present place of employment). There may be some increase in labor mobility among enterprises in the same city, but it is all too soon to say whether contract workers will indeed take advantage of the expiration of their contracts to seek out better opportunities. As long as wage differentials among firms remain small, inter-firm labor mobility is also likely to remain low. On the subsidiary question of whether, given higher mobility of labor, the willingness of enterprises to commit resources to training would be adversely affected, managers, planners and - 9-  researchers all believed skilled labor was in such short supply that enterprises would have to continue (and even increase) their own training efforts if they were to satisfy their skilled labor requirements. The Liaoning manager, who was interviewed intensively, felt that training would be the key to improve productivity, and that even under conditions of increased mobility, the firm would need to continue to train, particularly for technical skills. While his role in general education might decline, he saw no alternative source of skills. The Wuhan manager similarly was planning to increase substantially his training effort. Since 1983, he himself had become director of the factory's Vocational Education Center. Our respondent at the refrigerator factory in Shashi City (Hub-i province) was even more definite that the future held only more training responsibilities for the enterprise. Currently planned was the conversion of an old factory building to house a vocational school and workers' cultural center, combined. Over the last three years, the factory had spent Y430,000 on its workers' external training. This will continue, and by 1990 it is hoped to have all workers brought up from the present average skill-level of Grade 3 to a minimum of Grade 4. This respondent believed that the demands on skills made by the introduction of advanced technology would be the driving force behind enterprises' need to increase their training efforts. He pointed out that before 1973 when his factory was making, not refrigerators, but small metal assemblies, its training effort was virtually non-existent. This effort has grown along with the introduction of new machinery and technology, which itself has been a product of the economic reforms. In Beijing, officials in both the State Planning Commission and the Ministry of Machine Building took a similar view. Two reasons were offered for a likely net increase in training effort: (1) the demand for product quality in an increasingly competitive market can be satisfied only with a more highly trained work force and (2) technological progress will mandate increased training at the enterprise level. However, it was thought that smaller enterprises may hesitate to invest money in worker training, especially if the training does not clearly lead to higher labor productivity. On balance, it was believed that point (1) above would be so strong as to outweigh any incentive to reduce training investments by enterprises. Finally, it was noted that the previous mode of economic control encouraged short-term thinking on the part of managers, who had little incentive to train if the State taxed away most, if not all, of their profits. Under the reformed system, managers can, and will, take a long-term view, and this will inclrde investment in more training, along with investment in improved technology. In addition, officials also differentiated between some sectors (e.g., agricultural machinery construction) that will diminish in employment, and hence in training needs, as a result of the reforms; and other sectors (e.g., energy production, instrumentation and machine control) that will increase. It was thought that the balance overall would be distinctly positive for training, especially because - 10 -  competition among firms in the same sector will force firms to emphasize training, in order to be able to produce higher quality output. II. The second issue flows from the alleged, and no doubt to some extent real, need for significant increases in the number of technicians to be trained and important 4mprovement in the quality of technicians graduated. How can the employment and training system adjust to the need to expand technician training, incorporating changes in the content of training to meet the more demanding skill requirements of both the advanced production technology to be introduced and the higher quality output to be sold on world markets? We deal with this issue in extended manner in the following sections of the report. III. The third issue speaks to the possible remedial effects of more realistic earnings differentials for skills on the propensity of enterprise managers to misallocate and waste skilled workers on jobs that could be done by lesser skilled employees. To what extent can a reform of the wage structure relieve part of the pressure currently placed on the VTE system, by inducing managers to use what they already have more efficiently, instead of always asking for ever larger numbers of trained people? This issue is beyond the bounds of our data, and cannot therefore be treated here, even though it is of critical importance. However successful a VTE system may be in training the numbers and types of skilled workers called for by government and/or employers, if those workers are subsequently allocated poorly in employment (because the wage signals to managers are inappropriate), severe problems will surely arise for the VTE institutions. It seems that there is growing recognition of this among Chinese officials and managers alike. Short of a substantial degree of loosening of the rigid and compressed wage structure, the pressure of demand on VTE institutions is unlikely to abate, and managers' complaints about the shortage of skilled personnel are likely to continue. - 11 -  II. PLANNING The Structure of Secondary VTE There are three kinds of secondary vocational schools in China: Skilled Workers Schools (SWS), Secondary Technical Schools (STS), and Secondary Vocational Schools (SVS). These schools are owned and run by a wide variety of enterprises and government units, under differing national policy bodies (Figure 1). Figure 1s Structure of Secondary VTE Type and Skill- Enroll Length of Policy Owned/Managed level- From Course Body By: Skilled Junior 3 years Ministry Technical Worker Secon- of Labor Ministries; Schools dary and Municipal (SWS) Personnel technical bureaus & enterprises owned by municipalities Mid-level Workers -----------------------------------------------------------__--------- Secondary Junior 4 years State Technical Ministries Technical Secon- Education Municipal & Provincial Schools dary Commission labor & technical (STS) bureaus; Enterprises Technicians -----------------------------------------------------__--------------- Secondary Junior 3 years State District, Vocational Secon- Education Municipal Schools dary Commission education (SVS) bureaus Mid-level Workers and Technicians As shown, both SWS and SVS train middle level workers to enter at Grades 2-4 on the eight-grade unified workers' salary schedule used across China. STS train technicians who enter employment on the cadre wage scale, usually at grade 24 (Munch and Risler, 1986, p. 82). There are two types of STS: pro-service and in-service. The latter are typically established and run by large firms. Pro-service STS are - 12 -  just completing the process of shifting from enrolling senior secondary graduates to taking junior secondary graduates, and adding a fourth year to the curriculum. In some cases, a few selected STS will continue to enroll senior secondary graduates for more "technical" skill areas. In all, there are about 15,000 VTE schools run by local education bureaus, technical ministries, and enterprises (Table 2). Of these, 347 were designated national "key" SVS in 1980, on the basis of the quality of their management, teaching staff qualifications, teaching performance, and equipment. Since 1980, the number has shrunk a little, but these schools continue to receive extra funds from the State (mainly to purchase equipment). In addition, there are a further 600-700 schools designated as 'main stream" schools by provincial aut? rities. However, the State Education Commission considers that evua these schools are seriously below standard in many respects. Table 2: Secondary Vocational and Technical Training: Institutions and Enrollments: 1985 Number of Enrollment Institutions Capacity Enrollment SWS (1985)* 3,548 1,300,000 740,000 of which: (of whom, Run by national 190,000 are Ministries and in-service) and Commissions 945 Run by enterprises 1,621 Run by provinces 412 STS 3,557 ? 1,571,100 of which: Teacher training 1,028 558,200 SVS 8,070 ? 2,295,700 Total Voc. and Tech. Training| 4,606,800 Total Upper Sec. Goa. Education 7,411,300 *Source: Ministry of Labor and Personnel. Other data from Statistical Yearbook of China, 1985. - 13 -  Table 2 provides data on the number of schools of each type and their enrollments. Note the severe under-enrollment in the SWS, a signal that incentives to take training, especially in-service, may be too weak. The complex structure of provision has both historic and pragmatic rationales. Schools run by enterprises under the Ministry of Labor and Personnel originated in the 1950s during the first great expansion of Chinese industry. The work force was largely uneducated and poorly trained, and enterprises were required to establish schools which provided both general education and skills training. The (then) Ministry of Education managed general education only. At the end of the 1970s, the enterprise schools, many of which were closed during the Cultural Revolution, reopened -- again with the burden of providing compensatory general education for miillions who had had no access to sihooling during the Cultural Revolution. In the sohools studied, the compensatory education task was nearing completion, and enterprise-run SWS were providing various forms of in-service training in addition to vocational education for junior secondary school graduates. At the same time, the ministry of education began converting general education secondary schools to SVS status and adding vocational courses to general education schools, in recognition of the need for skilled workers. Many STS schools have a long history, often having been expanded since 1949 on the basis of pre-Liberation institutions. Until recently, most STS were owned and operated by the many technical Ministries, for example, the Min'stries of Machine Building, Zlectronics, Textiles, and so on. Under the new decentralization policies, the ownership and oversight of STS have been largely consigned to local governmental authorities, and at the central level their work is now formally under the successor department to the Ministry of Education, reorganized as the State Education Commission. However, their links to enterprises remain strong. As has been noted, they train to a higher level than do SWS or SVS. Entrance to the STS is governed by the same bureaus that assign students to higher education, and competition for STS places is very keen. Once admitted, a student's graduation is virtually assured (this is true also of students in the SWS and SVS schools); and once graduated, the newly skilled young person is assigned to a job, usually in the skill area and industry in which he/she was trained. It is important to recognize that the separate names given to these different school types conceal a good deal of overlap in actual work and function. A complaint made by the State Education Commission is that, although at the center they have a quite clear idea about the proper functions of each type of school, at the local level schools often work uout of strict line,u and take on tasks that are not within their 'contract" function. Further, a representative of the National Committee on Workers Education emphasized that in-service VTE, in particular, was a maze of overlapping and largely uncoordinated institutions and arrangements. He viewed the 'coordination and - 14 -  unification' of the in-service training scene as one of the National Committee'a primary tasks. Pragmatically, diversified and decentralized ownership and financing of vocational schools provided -- and continue to provide --a mechanism for resource mobilization and for the decentralized adjustment of manpower supply and demand. Both characteristics are of considerable importance in a country as large and diverse as China. By running their own school Ministries and enterprises could supply themselves with at least part of the skilled labor they needed. In addition, China has developed either by design or accident, a network of VTE training arrangements that are in close touch with employing organizations, often financed and operated by the enterprises themselves. However, there has been a price for this, paid in terms of narrowness of training curricula, small-scale training establishments, and extreme difficulty in finding adequate numbers of experienced and rained instruct- :s. In addition, the complexity of the VTE structure, ; th its various combinations of government and enterprise authorities, could be seen as cumbersome and potentially harmful to effective system management and production of appropriate numbers and types of skilled workers. The planning process is indeed complex on paper. However, as will be discussed, it operates with considerable flexibility and local autonomy. Plannine Units The planning process is operated by a set of vertically organized national-level ministries and commissions (the latter holding higher rank). These include: the State Planning Commission, the State Education Commission, the Ministry of Labor and Personnel, the Ministry of Finance, and other 'technical ministries' (such as Machine Building, Electronics, and Mining and Metallurgy) which operate both SWS and STS. Each of these is replicated through Provincial offices down to the level of municipalities (and often districts), creating local structures more or less parallel to the structure at the national level. aius, there are provincial and municipal labor, finance, education and technical bureaus, and provincial and municipal planning commissions. Both enterprises and schools are owned by provincial and municipal level units in all technical fields, including those agencies (Labor and Education) that, in addition to owning and managing pieces of the VTE system, plan together for the system as a whole. Like the economy, the administrative structure is highly segmented and oriented toward vertical flows of command and response. Planning for VTE, however, requires that elements of this segmented system coordinate activities in significant ways, in the effort to match the supply of skilled labor to the demand. - 15 -  At the national level, policy changes ar- typically implemented by means of formal agreements among the authorities concerned and by publication of a formal document At the time of our mission, the State Education Commission had published documents and signed agreements with regard to VTE as shown in Figure 3. Figure 3s Secondary VTE Policy Documents Document Purpose Cosigners No. 001 To resolve problems of cooperation -- between schools and enterprises 002 To strengthen teacher training -- 109 To provide funds to senior secondary -- schools for VTE courses 013 To facilitate the employment of Ministry of senior secondary school graduates, Labor and and to establish the principle Personnel that graduates will be paid according to their exam results 11i To establish principles for Ministry of the financing of STS Finance Signed, but not yet published, was a further agreement stipulating provisions for the establishment and rehabilitation of STS. Discussions are proceeding on agreements that will govern ideological education, the length of courses, the 'training before employment" policy, rural VTE, and the regulation of SWS. Planning Method The State Education Conmission believes that the growth rates of the economy and of VTE enrollment should be closely associated. Previous five-year plans are now criticized for having neglected this relationship, and a more generous share of the GNP is to go to the education sector. It is expected that the share of public expenditures on education will rise from just over 3 percent in the - 16 -  recent past to about 4.0 percent in 1990. However, there is no special office charged with estimating the optimum relationship between enrollments and expenditures on VTE and the GNP. In practice, the State Education Commission coordinates this type of work which is replicated at the provincial level by the provincial Education Commissions. However, extensive decentralization of financing to provincial and municipal levels has made it difficult to measure levels of finance accurately. China follows the familia: method of manpower "balances" in establishing training needs. This is essentially a four-stage approach: (1) determine the size of existing and prospective stocks of manpower of various types, taking into account losses by way of retirements from the labor force and additions from current enrollments in training institutions; (2) determine the total requirements for labor year-by-year for the planning period, based upon labor coefficients per unit of output assigned to each enterprise, and taking into account the impact of anticipated technological innovations; (3) subtract the size of stocks from the estimated need and determine the size of the training effort needed to bring stocks up to the level of need; (4) determine the feasibility of the estimated training effort, and make appropriate adjustments on both the demand (need) and supply (training) side to bring the two into balance by the end of the planning period. Demand Planning Manpower forecasting in China is effectively decentralized to provinces and municipalities. Overall employment targets are established by provinces for each year of the current five-year plan. These targets -- based on general projections for growth in various sectors -- are expressed only in terms of numbers to be employed, and they do not seem to serve as tight constraints on the provincial Education Commissions. Rather, they are used by provincial authorities as guidelines for planning. Within this general context, the annual manpower planning exercise at the provincial level is most important. Enterprises develop estimates of the numbers of new employees nateded by specialization and level of education for the comiag year. In enterprises, these are typically based on plans for expansion of production. The first round of plan review begins when these employment requirements are submitted to the Labor and Personnel Bureau and the Planning Commission at the level at which the enterprise is owned. Thus, municipally owned enterprises submit to the municipal Labor and Personnel Bureau and Planning Commission; provincially owned enterprises to these same bureaus at the provincial level. It is reported that the most intensive review of skill requirements takes place at this initial level. Plans at the municipal level are consolidated and forwarded to the Provincial Labor and Personnel Bureau. - 17 -  At the provincial level plans are consolidated and compared to provincial employment targets by the Labor and Personnel Bureau and the Planning Commission. Provisional employment quotas for enterprises by level -- worker, technician, cadre -- are established, and the projections fo'rwarded independently by the Provincial Labor and Personnel Bureau to the Ministry of Labor and Personnel and by the Provincial Planning Commission to the State Planning Commission. The Ministry of Labor and Personnel and State Planning Commission consult and reach agreement on employment quotas. These are then sent to central technical ministries, provincial Planning Commissions and provincial Labor and Personnel Bureaus. These two latter in turn consult and pass final employment totals down the line to enterprises. Supply Plannins Enrollment planning is based on employment targets and seeks to match enrollments with the projections for employment (by specialty, school type, and level) for the future period coinciding with graduation of current entrants to the schools (i.e., three of four years later). As with labor planning, this is done on an annual basis within the context of broad five-year targets and general national policies (such as the target of 50:50 ratio of secondary vocational to secondary general enrollments, and the 'training before employment' recommendation). Significantly, more attention is paid at the State level to setting enrollment quotas for the STS than for the other types of schools. According to a spokesman of the State Planning Commission, his Commission virtually ignores the SWS (because their enrollments are small) and also the SVS (because the skill-levels of graduates are so low). This means that planning for SVS, in particular, is above all a provincial and even a local municipal function, while provision for the SWS is seen as the responsibility of the technical ministries, enterprises, labor bureaus, and municipalities. Planning in Hubei Province In Hubei province, for example, a Manpower Planning Office has now been organized on an inter-agency basis with representatives from the provincial Education Commission, Labor and Personnel Bureau, and the provincial Planning Commission. Their task is to forecast manpower needs on the basis of information collected from the provincial industrial (technical) bureaus, who have surveyed their enterprises. The Manpower Planning Office's report containing manpower estimates then goes to the provincial Education Commission, and the Planning Commission will work with the Education Commission to allocate the overall numbers to be trained, by specialty and level. Table 3 shows the results of the process of enrollment planning for Hubei province, as of mid-October 1986. It is worth noting that a breakdown into specialities was not available. - 18 -  Table 3. Enrollment P'Anning Hubel Province 7th 5-Year Plan for Vocational and Technical Educational Development 1986-1990 1985 1990 EnrolIment Target Need 1. Rural Agricultural- Vocational Schools 122.4 200.0 77.8 of which: In urban locatlons 26.0 56.0 30.0 In town/country locs. 17.7 32.0 14.3 In rural locations 78.7 112.0 33.3 2. SWS 34.2 65.0 30.8 3. STS 60.1 90.0 29.9 of which: In secondary normal schools 23.2 27.8 3.8 TOTAL: Voc.Tech. Schools 218.7 355.0 138.3 Senior Secondary General Education Schools 366.0 360.0 -6.0 TOTAL: Secondary 582.7 715.0 132.3 of which: Voc./Tech. 37.18% 49.65% General 62.81% 50.35% (in thousands) Source: Provincial Education Commilssion, Hubel ProvInce The Provincial Education Commission will then allocate quotas for admission to the schools, except for municipally-operated schools (where the municipality receives the overall numbers and makes the allocations to the schools). SVS receive "indicative' quotas$ they are expected to exercise a good deal of discretion in adjusting the indicative quotas to local constraints and potentials. STS and SWS, on the other hand, are given "imperativel quotas, which they are expected to fill, but not exceed unless they can find supplementary funds from enterprises who are willing to pay for some extra training 'on contract." In Hubei province, the Manpower Planning Office is not expected to be a permanent establishment; it will be dissolved for the time being when its work on forecasting for the 7th Five-Year Plan (1985-1990) is done. - 19 -  If a new school is required to take care of training needs, permission must be gained from a variety of authorities, depending on the particular type of VTE school: Permission required from: STS: Provincial Education Commission, Provincial Economic Commission, Provincial Finance Bureau SWS: Provincial Economic Commission, Provincial Labor and Personnel Bureau, Provincial Finance Bureau, Deputy Governor of Province SVS: Provincial Education Commission only The Ministry of Finance sets cost standards for STS and SWS at about 50 percent of the standard college student cost in the same sector of industry; at about 50 percent of average college education costs for teacher training; and about 50 percent above the cost standard for general education schools for the SVS. As far as SVS are concerned, the Provincial Finance Bureau does not have a voice in the decision to establish or deny a new school. If the Education Commission has approved, the Finance Bureau must pay out the required funds from its Education Account. If budgeted funds are insufficient, the Finance Bureau may tap its reserve funds, and/or request a supplementary grant from the State. A proposal for a new SWS will go to the provincial Labor and Personnel Bureau, the Planning Commission, the Education Commission, and the Finance Bureau. A'1 must signify their approval, though permission is no longer required from the relevant technical ministry. If approval is given, it will be made in terms of a specific size, specialty, and "grade." ("Grade" refers to the "quality" of the school as revealed by the number and qualifications of the teaching establishment authorized and by the director's educational level and cadre-grade.) If the SWS is to be run by an industrial bureau, the Finance Bureau will provide the recurrent costs, but if it is to be an enterprise-school, then the enterprise will be expected to pick up the recurrent costs. As a final step, in the case of a new SWS, the express permission of the provincial Deputy Governor charged with overseeing education and training must be obtained. In Hubei province, and doubtless in other provinces, too, the process of planning approval for a new (additional) course of study also differs according to type of VTE school. Some examples follow: SVS: Assume the need is expressed for a new course of study to prepare personal computer operators (a school director, or in the case of a PC operator course, a municipality's Economic Commission might take this initiative). The Economic Commission will ask the school to work up a proposal and report back to the Economic Commission. When this stage is completed to the satisfaction of both parties, the Economic Commission will recommend the proposal to the - 20 -  municipal Education Commission. If it gains support there, the Education Commission will jointly approve the proposea together with the municipal Planning Commission and the municipal Finance Bureau. The Finance Bureau can hold up implementation by pleading lack of funds, and asking for some delay until funds are available, but in general, proposals that get as far as assent by both the Education Commission and the Economic Commission will be implemented. Provincial authozities will not be involved, for they cover none of the recurrent expenditures for Hubei's SVS (all of the province's SVS being run by municipalities and districts). STS: A new STS program to train, say, machinists using computer-controlled tools, would most likely be initiated by the school director, who would report his need to the relevant municipal bureau (in this case, the Industry Bureau). Given local approval by the Industry Bureau, the proposal will be reported up to the provincial Industry Bureau, who will in turn report it to the provincial Education Commission. At this point, the provincial Education Commission and Planning Commission will discuss the proposal, and if it is acceptable, approve it jointly. For a new course (as distinct from a proposal for a new school), Finance Bureau approval is not needed. SWS: A new course for the SWS training of welders must follow much the same path of planning permission as for a new SWS school, beginning with the provincial Labor and Personnel Bureau, and going through all the stages mentioned above, except for the last approval by a Deputy Governor, which in this case is not needed. Hubei province's program for upgrading the quantity, quality, and status of VTE comprises four main elements: (1) each municipality should have one or two efficiently run well-equipped vocational-technical training centers, established and administered by the provincial government for demonstration purposes. Special funds have been allotted for the centers by the provincial government, and there are already centers in six cities; (2) each county should have one well-run "key" vocational school, to provide courses of particular value to the local economy. These schools should be on an equal footing with "key" general education schools for priority allocation of teachers and equipment. Forty-one such "key" vocational schools are planned, and they are to receive special subsidies of Y120,000-Y150,000 to purchase equipment; (3) vocational programs will be instituted in general education high schools. This is likely to be a long process, because full implementation will require fundamental change in school procedures, which till now give little or no room for elective courses; (4) reforms of the labor recruitment system will be pushed ahead as fast as possible, in particular the "training before employment" system. Once the new approach has taken hold, it is expected that the development of VTE in Hubei will go ahead even more vigorously. The overall pattern of VTE development will be to strengthen the free-standing schools, such as STS and SVS, to insert vocational programs in general education high schools, and to develop the enterprise-based skilled workers schools (SWS). By embracing this - 21 -  multiple, and even complex, structure of provision, the province hopes to significantly enhance prospects of success in meeting demands for skilled workers. Two Hubei Cities: Wuhan and Shashi Wuhan, Hubei province, is a city with 6 million inhabitants. The city is highly industrialized. It is an important Yangtze River port town, and it is the administrative capital of a province of 50 million people. Vocational education at the secondary level began as far back as 1891 in Wuhan and is very well developed by Chinese standards. Within the boundaries of Wuhan City are located: 25 STS (enrollment, 9,200); 31 SWS (10,200); 5 SVS (860); and a further 19,300 students enrolled in SVS "wings" built onto existing secondary schools. This represents a total enrollment of 39,560 in regular secondary vocational and technical education, to which must be added a further 3,700 students enrolled in TV study courses, for a total VTE enrollment of 43,260. This last figure represents 36 percen: of total student enrollment at the secondary level -- general and vocational/techniual combined. The provincial authorities are planning to bring the enrollment mix more into line with the State's 50:50 target during the current five-year plan, ty admitting 4 students to VTE for every 5 admitted to general education schools, moving the ratio fr'm 36i44 towards 44s56. The goal is to train more than 100,000 junior managers, technicians, and skilled workers for Wuhan's comprehensively reformed economy by 1990. At present, 2.9 percent of the labor force is trained to the level of engineer (higher education) or technician (secondary education). The municipal authorities believe this figure should be nearer 8 percent, and they look forward to reaching thls target in part with the help of funds and technical assistance offered by the Federal Republic of Germany (FRG). It is evident that in Wuhan, the development of VTE is proceeding energetically, and will probably go ahead strongly in the future. Although our Chinese respondents were (justifiably) proud of their achievements and their plans, the adequacy of a system with a capacity of only 40,000 to 54,000 VTE students to serve an important industrial, commercial, and administrative center of 6 million inhabitants remains questionable. Of course, the paucity of training places relative to the size of the present and prospective labor force is by no means unique to Wuhan, but may be said to characterize China as a whole. Some sense of the shortfall in training opportunities may be gathered by comparing Wuhan (6 million inhabitants) with the entire country of Denmark (5 million inhabitants). In Denmark, 80 percent of the young people begin some vocational training following on immediately from their general schooling; yet others start vocational training later. The total effort ii estimated to involve roughly 100,000 young people at any given time, that is, two and a half times Wuhan's for a population only about five-sixths the size. (CEDEFOP, 1982: 104, 126-130) Also located in Hubei province, and also on the Yangtze River is the rapidly developing town of Shashi, with a current population of 270,000. The economy of the town is based on light industry (textiles, - 22 -  light and medium engineering, and metal products). The expansion of VTE at the secondary level has been very fast. In 1977, there were 13 students enrolled in general secondary schools (junior and senior) for each student in VTE. In 1986, the ratio had become 1.78 to 1. By 1985, Shashi had 5 STS, 16 SVS, and 6 SWS. Enrollments In all three typos of school together numbered 5,200 which equalled 64 percent of all students in senior secondary education. A total of 28 specializations aro currently being offered in the VTE schools. In 1983, the municipal Labor and Personnel Bureau began to offer short-term VTE courses to junior middle school graduates who were unable to secure a place in full-time regular VTE. There are currently (1986) 33 short-term classes running, with a total enrollment of 986 students. The municipality has also established (1983) a higher institute for VTE; it has admitted 160 graduates of senior secondary schools to a three-year course. Its graduates are assigned to jobs in the order of their academic performance. The graduates of the town's STS, SWS, and SVS mostly enter work with a Grade 3 skill-level, and our respondents in Shashi claimed that VTE has been responsible for doubling output per worker over the two-year period, 1984 and 1985. In 1983, the municipality issued a six-point set of instructions governing VTE and employment (Document No. 68). The six points are as follows: (1) each enterprise must have a training quota for all newly hired workers, end no untrained workers may be hired ("training before employment"); (2) the hiring of children of the enterprise's workers is no longer allowed; (3) the municipal Labor and Personnel Bureau must exercise stricter control over State enterprises' wage bills, and State enterprises must get Labor and Personnel Bureau permission before hiring and paying new workers; (4) wage differentials for higher training and skill-level must be recognized end paid (the present base pay wages are set as follows: Grade 1 worker, Y40 per month; Grade 2, Y48; Grade 3, Y56; Grade 4, Y64); (5) all new workers must show a labor record book and a graduation certification from a school. Job-waiting youth must register with the Labor and Personnel Bureau and be given a job-registration certificate; (6) training done by schools on behalf of enterprises is to be encouraged, and paid for by the enterprises. VTE in Shashi currently operates in 5 modes: 1. large enterprises run their own VTE schools independently; 2. small .aterprises collaborate to run schools jointly; 3. large enterprises run schools jointly with the municipal Education Bureau; 4. enterprises contract with VTE schools outside their own control to train their workers; 5. the municipal Education Bureau runs schools. - 23 -  It is planned to continue this multi-faceted approach, but the municipality's Education Bureau hopes that it will be able to strengthen its "leadership' (control?) over VTE in the future, by codifying the rules and regulations governing VTE, to bring more order into a very 'untidy" system by establishing a new section devoted to VTE and a VTE resoarch unit; and by improving syllabi and planning structures for VTE. The 1984 skill-composition of Shashi's labor force, and the targets for 1990 are as follows: Table 4: Skill Composition of the Labor Force, Shashi City, 1984 Percentages of the Total Labor Force 1984 1990 Engineers and Technicians 2.84 8-10 Highly Skilled Workers 0.5 10 Medium Skilled Workers 10.3 50 Sourcet Shashi Municipal Education Commission These targets are to be achieved by restructuring the intake into senior secondary schooling, as follows: By 1990, of the 4,000 junior-middle school graduates, 252 will enter senior general education schools, 12.52 will enter STS, and 502 will enter SWS or SVS. An important part of Shashi's plans for developing VTE to 1990 will be the expansion of STS, which are expected to graduate about 3,000 students by that date. In addition, 11,000 will graduate from college-level courses, and 8,000 from SWS and SVS by 1990. Five hundred additional VTE teachers will be trained, and a vocation education center is being established to house development and demonstration work, especially in new curricula. The commitment and preparatory planning work of the Shashi municipal authorities are very impressive. All the major elements for significant achievement are present: forceful, but collegial, leadership; a multi-faceted approach to VTE, with enterprises and government authorities involved independently and jointly; close consultation with employers and the possibility of adapting VTE offerings to changing employment needs; strong demand for senior secondary education, combined with restriction on entry into general _ 24 -  education schools, to boost the academic level of entrants into VTE; and excess demand for graduates in the city, as industrial and commercial development stimulated by the oconomic reforms goes ahead. The two problems emphasized were lack of equipment and lack of trained, experienced teachers. Other problems, not specifically mentioned, but no doubt recognized are: in the enthusiasm for change, there is a danger of overestimating what is possible in short time-periods, and thus courting a backlash against VTE arising from disappointment and frustration; the possibility that the best students will continue to be reluctant to enter VTE, preferring the higher prestige of the academic stream; and the difficulty (perhaps even the impossibility) of successfully retraining general education teachers to work in VTE settings. Pianning in Liaoning Province Another view of the complexities of VTE planning may be gained from Liaoning province (see Figure 4). A notable feature of planning is the considerable latitude to adapt to local situations. For example, in Hubei, a Provincial Education Commission has been established to integrate the work of the still separate Higher Education Bureau and Education Bureau of Liaoning. The Hubei and Liaoning processes, as described, serve then as a general guide to provincial planning systems, and they identify key aspects of the system of matching enrollments to manpower requests. - 25 -