China - Vocational Education Reform Project

Document of The World Bank Report No: 26129 IMPLEMENTATION COMPLETION REPORT (IDA-28980; IBRD-40630) ON A LOAN IN THE AMOUNT OF US$10 MILLION AND A CREDIT IN THE AMOUNT OF SDR 13.8 MILLION TO THE PEOPLE'S REPUBLIC OF CHINA FOR A VOCATIONAL EDUCATION REFORM PROJECT June 17, 2003 HUMAN DEVELOPMENT UNIT EAST ASIA AND PACIFIC REGION  CURRENCY EQUIVALENTS (Exchange Rate Effective July 31, 2002) Currency Unit = Yuan (Y) = 100 Fen Y 1.00 = US$ 0.12 US$ 1.00 = Y 8.3 FISCAL YEAR January 1 December 31 ABBREVIATIONS AND ACRONYMS CAS - Country Assistance Strategy CEP - Chinese Expert Panel FILO - Foreign Investment and Loan Office FTC - Financial Transaction Center ICB - International Competitive Bidding LGCC - Local Government Coordinating Committee MOF - Ministry of Finance NCB - National Competitive Bidding NPSC - National Project Steering Committee PEdC - Provincial Education Commission PIP - Project Implementation Plan PPAC - Provincial Project Advisory Committee PPIO - Provincial Project Implementation Office PS - Project School SAA - State Audit Administration SEdC - State Education Commission SGB - School Governing Board SIAC - School Industrial Advisory Committee SPC - State Planning Commission VED - Vocational Education Department of the State Education Commission Vice President: Jemal-ud-din Kassum Country Manager/Director: Yukon Huang Sector Manager/Director: Christopher J. Thomas/Emmanuel Y. Jimenez Task Team Leader/Task Manager: Dingyong Hou  CHINA VOCATIONAL EDUCATION REFORM PROJECT CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2 4. Achievement of Objective and Outputs 3 5. Major Factors Affecting Implementation and Outcome 7 6. Sustainability 8 7. Bank and Borrower Performance 8 8. Lessons Learned 9 9. Partner Comments 10 10. Additional Information 12 Annex 1. Key Performance Indicators/Log Frame Matrix 13 Annex 2. Project Costs and Financing 15 Annex 3. Economic Costs and Benefits 17 Annex 4. Bank Inputs 18 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 20 Annex 6. Ratings of Bank and Borrower Performance 21 Annex 7. List of Supporting Documents 22  Project ID: P003635 Project Name: Vocational Education Reform Project Team Leader: Dingyong Hou TL Unit: EASHD ICR Type: Core ICR Report Date: June 17, 2003 1. Project Data Name: Vocational Education Reform Project L/C/TF Number: IDA-28980; IBRD-40630 Country/Department: CHINA Region: East Asia and Pacific Region Sector/subsector: Vocational training (85%); Tertiary education (9%); Sub-national government administration (6%) Theme: Education for all (P); Education for the knowledge economy (P); Social risk reduction (S); Social analysis and monitoring (S) KEY DATES Original Revised/Actual PCD: 04/13/1994 Effective: 12/12/1996 12/12/1996 Appraisal: 12/22/1995 MTR: 12/30/1998 05/26/1999 Approval: 07/02/1996 Closing: 12/31/2002 12/31/2002 Borrower/Implementing Agency: PRC/STATE ED. COM.(SEDC) Other Partners: STAFF Current At Appraisal Vice President: Jemal-ud-din Kassum Russell Cheetham Country Director: Yukon Huang Nicolas Hope Sector Manager: Christopher Thomas Joseph Goldberg Team Leader at ICR: Dingyong Hou Jan Segerstrom ICR Primary Author(s): Dingyong Hou; Hon-Chan Chai 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome:S Sustainability:L Institutional Development Impact:SU Bank Performance:S Borrower Performance:S QAG (if available) ICR Quality at Entry: S Project at Risk at Any Time: No 3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective:  The project objective was to increase system responsiveness to changing labor market demands and management efficiency of the participating institutions, including setting up mechanisms to use labor market signals to run and fine-tune training programs, strengthening links with industry, increasing nongovernment sources for education and training and devolving responsibility to schools under clearly defined terms of accountability. Specifically, the project would: (a) improve and increase the supply of skilled labor to meet labor market demands; (b) raise the quality and efficiency of the vocational education and training system; and (c) build up capacity for monitoring, evaluation and dissemination of pilot experiences and replication. To achieve these objectives, a two-prong approach was taken: (i) the development of 80 (reduced from the original 82) key secondary vocational and technical schools as models for upgrading the quality and efficiency of vocational education; and (ii) improving the planning and management of vocational education. The objectives were consistent with the Bank's Country Assistance Strategy (CAS) for China, which was to assist the Government in developing the institutions and mechanisms necessary to sustain rapid growth and broad-based development, for which a modern labor market and market-oriented vocational and technical skills would be crucial. The project would take two strategic steps in developing vocational-technical skills and a labor market. The first would be the pilot-testing of crucial improvements in the market-responsiveness and quality of China's vocational and technical schools and their capacity to provide well-trained workers in the skills sought by the market. The second would be to enhance the capacity of schools to extend their in-service training and other types of adult education to workers. The project complemented other investment and technical assistance operations outlined in the CAS for economic law reform, industrial restructuring, and vocational training, all of which facilitate the development of a comprehensive framework for the basic policy and investment provisions necessary to promote market reform. Project Design. Two aspects were critical to a good project outcome. The first was the upfront emphasis on project outcomes and impact by clearly stating the key performance indicators (KPIs) and linking them to the main project objectives. This provided a firm framework for the project institutions and the provincial and central implementation agencies to focus on the project's basic intent. Fourteen KPIs were agreed between the Bank and MOE-FILO before credit effectiveness. (See Annex 1) The second aspect was the detailed preparation of technical assistance (SAR Report No. 15473-CHA, dated May 16, 1996, Annex 9), which was crucial to the project's reform thrust, particularly the criteria for the selection of international consultants that included the capability to operate training programs and follow-up seminars in China. A bottom-up approach taken in project preparation ensured full participation of the candidate schools, local government and provincial stakeholders, with MOE-FILO holding overall responsibility. The original participating provinces were Guangdong, Jiangsu, Liaoning and Shandong and Tianjin Municipality. They were selected on the basis of their rapid industrialization, employment-driven demand, and commitment to planning and managing vocational education reform. However, in 1998, Tianjin Municipality withdrew from the project and was replaced by Beijing Municipality. 3.2 Revised Objective: Objectives not revised. 3.3 Original Components: The project design was simple and clear-cut, with three components: a: Development of Key Institutions for Vocational Education ($56.8 million); - 2 -  b: Improving Management and Planning of Vocational Education ($1.0 million); and c: Supporting Project Management ($0.4 million) The original participating provinces and their respective project schools (number in parenthesis) were as follows: Guangdong (14), Shandong (17), Jiangsu (23), Liaoning (15), and Tianjin Municipality (13), covering 82 schools altogether. The withdrawal of Tianjin Municipality and replacement by Beijing Municipality (with 11 schools) brought the final total number of project schools to 80. 3.4 Revised Components: Although it was not strictly a component revision, the replacement of Tianjin Municipality in 1998 by Beijing Municipality was due to the failure to reach agreement on Bank credit/loan funds on-lending procedures between the Ministry of Finance and Tianjin Municipality, notwithstanding the fact that the latter had invested funds in project activities. Following an amendment to the Development Credit Agreement and the Loan Agreement Beijing Municipality joined the project in 1998. Although Beijing Municipality joined the project mid-way, it did not materially affect the project as a whole, as Beijing Municipality was able to catch up in all essential aspects (civil works construction, equipment procurement, and overseas and domestic staff training). 3.5 Quality at Entry: There was no formal Quality at Entry criteria in effect at project preparation and appraisal. Nevertheless, the project design followed the essential standards of the Bank Quality Assurance Group regarding: (a) technical, economic, environmental and social aspects and lessons learned; (b) financial management; and (c) Borrower's commitment, ownership, participation and readiness for implementation. Project design was consistent with the Bank's China CAS, which focused on poverty reduction and reducing constraints to sustained growth, and was finalized after a rigorous peer review process. 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: All the Key Performance Indicators show that the project achieved and, in some cases, exceeded several quantitative targets, which reflect the realization of key outcomes pertaining to the project schools' external efficiency and strengthening of institutional links with enterprises. 4.2 Outputs by components: A. Development of Key Institutions for Vocational Education ($56.8 million) The project has substantially achieved the objective of developing the 80 key project schools (PSs) as models for upgrading the quality and efficiency of vocational education through (a) course revision and curriculum development; (b) staff development and training; (c) international and domestic technical assistance; and (d) upgrading and equipping of laboratories and workshops. Each PS was assisted according to its own detailed plan, which focused on one or two major specializations representing the local or regional economic development priorities. Reform of training focused on making the system more flexible and responsive to market demands. (a) Course Revision and Curriculum Development All the PSs reported successful completion of curriculum restructuring and course revision, which generally accomodated market signals and the local economy's changing demands for vocational skills. The curriculum base has been broadened, giving general education subjects a larger share and - 3 -  proportionately reducing specialized courses. Based on students' needs, the new courses stress skill acquisition and individual development. With a broadened general knowledge base, students could acquire a balanced skill-mix and gain greater flexibility and adaptability in the fast-changing economy and labor market. They are also required to achieve competency in computer applications and standard Chinese language, which strengthen their basic cognitive skills for further learning. The adoption of a course-credit system has facilitated the introduction of more courses designed as modules of industrial theory and practice. Teaching methods have become more student-centered. Practical workshop and laboratory training have been increased and supported by the provision of new equipment procured under the project. The replacement of old courses by new courses based on local-economy demands demonstrates an increasing responsiveness to changing market forces. The project achieved significant efficiency gains in terms of average weekly teaching hours, which increased by 32 percent from the per school average of 11 hours in 1996 to 14.5 hours in 2002, with the biggest gains of 51 percent and 40 percent by Shandong and Liaoning Provinces. The appraisal projection of enrollment increase from 42,000 to 60,000 in full-time pre-employment courses over the project period was far exceeded in reality. The total student enrollment in 2002 was about 200,290, an increase of 170 percent over the baseline enrollment in 1996 of about 117,700. The average per-school enrollment in 2002 was about 2,500 compared with about 1,470 in 1996. Graduates totalled over 56,800 of which about 61,600 (about 91 percent) found employment within six months of graduation, with the highest employment rate of 96 percent in Beijing Municipality and the lowest of about 87 percent in Shandong Province. (b) Staff Development and Training The overall success in achieving the desired reforms in course revision, curriculum development, and institutional planning and management was due to a well-timed, meticulously planned and sharply focused program of training selected key specialist teachers and school principals at the Singapore Nanyang Polytechnic (NYP) and other administrators and teachers locally. The early start of the training at NYP with follow-up support in China by NYP consultants was critical to the timely planning and initiation of reforms in the PSs. Central to the NYP training program were two unique concepts of the `Teaching Factory' and `Integrated Technology Teaching and Learning' (ITL) which served as the pedagogic foundation for staff and curriculum development as well as for organizing and delivering training. These concepts provided a common platform for training both the specialist teachers and the principals who subsequently were equipped with a common frame of reference for designing and implementing the desired reforms in the PSs. An extension of the above concepts is the `Specialist Center' (SC), an NYP innovation that also inspired some principals and specialist teachers to establish similar units in their schools. The SC is designed to provide students with extensive practice and application-oriented training. It allows them to apply the theoretical concepts they have learnt, thereby enabling them to maximize their understanding and learning of technology. The NYP was chosen to provide this technical assistance because of Singapore's good reputation for highly successful vocational and technical education programs closely linked with industry and the labor market, and NYP's ability to run the program in Chinese, the latter being a key consideration for avoiding the need for time-consuming and costly language training for PS staff. Providing the training in Chinese greatly facilitated the timely and successful implementation of the program. Key specialist teachers, totalling 82 (including 12 women), were trained at NYP in four groups over a two-year period, from May 1998 through November 2000, with the following provincial representation (the number of participants in brackets): Guangdong (16); Shandong (17); Jiangsu (16); Liaoning (12); and - 4 -  Beijing (21). The training was provided in four main specializations (the number of participants given in brackets): Electronics (20); Manufacturing Technology (19); Mechatronics (12); and Information Technology (31). Each specialization includes a wide range of sub-disciplines. The program upgraded and enhanced the specialist teachers' technical and professional capabilities to enable them to develop and introduce up-to-date teaching methods and curricula responsive to industry needs. School principals, totalling 75, including five women, were also trained in four groups, each group being given a three-week training dealing with the specializations of the schools represented by the principals. The training took place over a 20-month period, from December 1997 through August 1999. The provincial representation was as follows (the number of participants in brackets): Guangdong (14); Shandong (15); Jiangsu (21); Liaoning (15); and Beijing (10). Domestic seminars, complementing and reinforcing the overseas training, were held to disseminate among staff of PSs and non-project schools the `good practice' ideas gained from the NYP experience that had a direct bearing on curriculum reform, course development, and institutional planning and management. A total of three seminars, presented by returnees from overseas training and NYP experts and dealing with three main topics, were held in Beijing (October 1999, on Vocational Education), Dalian (July 2001, on Labor Market Information), and Guangzhou (December 2002, on Vocational School Management). Domestic staff training operated at provincial level was a key quality input whose outcome is reflected in the very significant increase in the number of staff from all the project provinces who benefited from administrative training, pedagogical skill training, and academic qualification upgrading. Across all provinces, the average percentage of staff trained was about 186 percent for administrators, 493 percent for qualification upgrading, and 594 percent for skill training over the planned targets. Most significant are the numbers for the last two categories, which reflect the importance the provinces placed on raising staff qualifications and improving their teaching skills. The potential long-term impact on quality improvement may be gauged from the fact that, on average, each PS showed the following results: administrators