Beijing, May 23, 2006
– China’s technical and vocational education and training sector can benefit from increased cooperation between the government and private sector and updated regulatory policies and frameworks. The International Finance Corporation’s Vocational Educational and Training Conference in Beijing today brought together government officials with education institutions and companies that have demonstrated innovative private sector solutions to educational challenges.
The conference, supported by the Ministry of Finance, the Ministry of Education, and the Ministry of Labor and Social Security, heard that several trends are converging to create pressure on China to raise investment in vocational education and training. In recent years there has been a migration of over 200 million surplus rural workers to the industrial and service sectors in the eastern coastal provinces. The World Bank estimates that 90 million new urban jobs will have to be created over the next 10 years to absorb labor shed by rural areas, to compensate for restructuring-related job losses, and to meet the needs of the growing labor force.
China’s responsiveness and flexibility in the technical and vocational education and training sector will therefore be of particular importance, and it will be crucial to ensure that central regulation will foster the necessary education and training.
“The public sector does not have the resources or the skills to meet all these challenges on their own. Vocational education institutions, for example, need to foster partnerships rather than depend solely on government,” said Karin Finkelston, IFC Associate Director for East Asia and the Pacific. “China also needs to update its regulatory policies and frameworks. Regulation and policy must support education and training systems that bridge formal education with the needs of students. Policymakers need to be encouraged to improve the investment environment to bring more private support to this important sector,” she added.
The conference heard the findings of a study that compares the current vocational education and training market in China and international best practice. The study was compiled by teams of international IFC consultants, with funding from the Swedish International Development Cooperation Agency.
IFC has already financed a project involving public and private partners for upgrading vocational qualifications for the health industry. IFC’s $4.6 million investment in Shanghai Aerospace Computer System Engineering Company is bringing high-quality distance education to trainee nurses and other medical staff in underdeveloped western regions of the country.
In 2004 IFC made its first investment in China’s education sector with the launch of the Shanghai International Banking and Finance Institute, a joint venture between Bankakademie of Germany and the Shanghai University of Finance and Economics. The institute provides world-class training to Chinese finance professionals, thereby assisting the development and modernization of the country’s financial sector.
About IFC
The International Finance Corporation is the private sector arm of the World Bank Group and is headquartered in Washington, D.C. IFC coordinates its activities with the other institutions of the World Bank Group but is legally and financially independent. Its 178 member countries provide its share capital and collectively determine its policies.
The mission of IFC is to promote sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications. For more information, visit
www.ifc.org
.
IFC fulfills three functions related to environment and social development: managing environment and social risks associated with the projects it finances via environmental and social standards that are required of its client companies; collaborating with client companies to find business opportunities arising from the protection of the environment and social development; and exploring and developing new financial products to create new business opportunities linked with the environment and social development.
