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Global Trends and Relevant Issues in Chinese Education

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Title: Global Trends and Relevant Issues in Chinese Education


1
Global Trends and Relevant Issues in Chinese
Education
Public Private Partnerships
Beijing, China 1st November, 2005

2
Structure of Presentation
  • Challenges for China
  • The Knowledge and Education Challenge
  • Global Trends in Education and Training
  • Broad Overview of Education and Leaning System in
    China
  • Key Challenges of Life Long Learning for China
  • Greater Partnership between Government and the
    Private Sector
  • Getting More Private Sector Participation in
    Education and Training in China

3
Challenges to Chinese Development
  • Increasing Globalization and International
    Competition
  • Limited Natural Resources
  • Need for a more knowledge intensive growth
    strategy
  • Providing productive employment for
    Migrants from
    rural to urban
    Workers laid off as result
    of Chinas economic restructuring

    New entrants to labor
    force
  • Increasing Inequality
  • Need to turn abundant human resources into
    strategic advantage

4
An Increasingly Globalized and Competitive World
Economy
  • Increasing Globalization
  • Rapid reduction of transportation and
    communications costs
  • Increasing global information (political,
    cultural, socio economic)
  • Strong trends towards regional integration
    (NAFTA, EU, ASEAN3)
  • Increasing Competition
  • Significant trade liberalization is creating
    larger global market and increased competition
  • Share of exports and imports to GDP has increased
    from 38 in 1990 to 52 in 2002
  • Value added directly controlled by MNCs is 27 of
    global GDP in 2002
  • Underestimate doesnt include backward
    supply linkages or forward linkages to marketing,
    distribution, service, etc.

5
Education and Innovation as Key Elements for
Competitiveness and Growth
  • Education and Innovation are becoming more
    important the increase in speed of the
    creation and dissemination of new knowledge
  • Education is the fundamental enabler of the
    knowledge economy and a key to long term
    competitiveness and growth
  • Not just basic and secondary education, but
    higher education and the constant upgrading of
    skills
  • This is a challenge for all countries of the
    world
  • There is also increasing competition for people
    with high level skills
  • Innovation is becoming a more important element
    of competitiveness and growth there is greater
    mobility of products, services and knowledge.
  • A larger percentage of a countrys economic
    growth can be attributed to more effective use of
    knowledge, even in developed countries
  • Countries behind the global frontier can
    dramatically increase their performance by
    improving their ability to innovate
  • Expenditures on RD globally have been
    increasing, particularly the share contributed by
    the productive sector

6
Key Challenges for Education Training
  • Increasing globalization and competition
  • Need higher level education to keep up with and
    make effective use of rapidly changing knowledge
  • Also need high level scientific and technical
    manpower to create new knowledge
  • But also need system of continuous training in
    order to constantly up-skill or re-skill people
    who have already passed through the formal
    educational system
  • Therefore need to move to system of life long
    learning
  • Needs to cover all levels of formal education as
    well as
  • Enterprise based training
  • Plus all kinds of specialized training to
    re-skill people
  • As well as education and training for persons who
    have already left labor force
  • This system will need to have
  • Multiple public and private providers of
    education and training
  • Multiple pathways to different levels of
    competence
  • Coordination among many suppliers/accreditors/regu
    lators

7
Key Issues that Need to be Addressed for An
Effective System of Life Long Learning
  • Assessment of peoples education and skills
  • Not just years of education or raw ability scores
  • Also functional ability such as measures by OECD
    adult literacy tests, PISA
  • Plus specific job related skills
  • Certification and accreditation
  • Not just in countries but also across borders
  • And not just for physically present universities,
    but also for distance learning programs
  • Financing education and training
  • Government, vs firm, vs. individual
  • Full market vs. grants and loans
  • Effective use of information technologies in
    general and distance education
  • In classrooms computer based instruction,
    internet materials, video, etc
  • Radio, TV, Interactive video, internet based
    courseware and simulations, etc.
  • Information on
  • Needs of market,
  • Quality of different providers,
  • Quality and skills of students/workers

8
Implications for Role of Government and
Structure of Education and Training Systems
  • Implies rethinking the role of government
  • What does the government need to provide? What
    can be provided by the private and non-government
    sector?
  • Who can best set the standards and do the
    accreditation? What should be compulsory and what
    voluntary?
  • What should be the financing role of government
    versus that of parents or corporations?
  • What role does government have in ensuring equity
    as there is a growing private system?
  • How can government promote development of an
    education loan market?
  • Implies rethinking and improving structure and
    content of education and training systems
  • Major challenges in what content and skills
    should be given at different levels of formal
    education
  • How to do this in the most cost effective way?
  • We are moving to system of just in time learning
    for whatever is the relevant need

9
Global Trends in Education and Training
  • Increasing educational attainment
  • Continued high returns to higher levels of
    education until very recently
  • Increasing contribution of education to GDP
    growth
  • Increasing globalization of education
  • Increasing tendency for adults to go back to
    school or to get new skills
  • Growing amount of training provided on the job or
    by going back to formal education
  • Increasing private provision of education
  • Increased need to approach education and training
    as life long process from cradle to grave

10
Changing the Education Training Paradigm
  • Traditional Model
  • Information based
  • Rote learning
  • Teacher directed
  • Just in case
  • Formal education only
  • Directive based
  • Learn at a given age
  • Terminal education
  • Knowledge Economy Model
  • Knowledge creation/application
  • Analysis and synthesis
  • Collaborative learning
  • Just in time
  • Variety of learning modes
  • Initiative based
  • Incentives, motivation to learn
  • Lifelong learning

11
Three Challenges for
Education and Training
in China
  • Stock Challenge
    upgrading skills of people
    already out of the formal school system
  • Flow Challenge
    expanding formal educational
    enrolments and increasing quality
  • Dynamic Challenge
    adjusting education and training to
    rapidly and constantly changing needs

12
Stock Challenge in China
  • Rapid creation and diffusion of knowledge means
    adults constantly have to learn. China has to
    upgrade the skills of 700 million workers
  • Improve training to millions of rural migrants
  • Retrain millions of laid off workers
  • Upgrade skills of hundreds of millions of
    employed persons
  • Provide education and training to hundreds of
    millions of adults outside the labor force
  • China needs
  • Multiple mechanisms for continuous training
    beyond formal education system
  • Effective system for skills assessment and
    certification
  • To exploit potential of information and
    communications technologies to expand training
    opportunities

13
Flow Challenge in China
  • China need to continue to expand access and
    improve the quality of its formal education
    systems which has more than 240 million students
  • Education system must teach students how to learn
    through their lifetime regardless of when they
    leave it implies need for
  • Better teaching and learning pedagogies for core
    skills
  • Broader interdisciplinary approaches
  • Financing mechanisms to expand access and improve
    quality
  • China need to address both stock and flow
    challenges, though severely financially
    constrained

14
Enrollments Tertiary Sector
15
Chinas Gross Enrollment Rates
.
. . still some challenges ahead
16
Dynamic Challenge in China
  • In designing system need to take into account the
    changing population structure
  • Because of one child policy, school age
    population is already starting to decrease at
    primary school level
  • But still need to expand enrollments at higher
    level
  • And need to plan for different mix of students -
    more adult learners at higher level
  • Need to take into account changing economic
    structure resulting from rapid growth
  • Decrease in agriculture, increase in industry and
    especially in services
  • Changing occupational structure and skill
    requirements - especially of higher value
    knowledge skills in service sector
  • Need to update the content of curriculum and
    training to be relevant to changing needs

17
Overview of Chinas Formal System
20 Million (2005)
Higher Education
950 inc
90.3 Million
Secondary Education
2.1 Million
72 inc
52.4 Million
130 Million
Basic Education
130 Million
2 inc
1990
2001
18
Chinas Learning Needs Beyond Formal Education
Beyond Retirement Age
Training for the unemployed
Labour Force (750m)
Remedial/ Updating/ Upskilling the Participating
Workforce
Adult learners
Government Failure students out of school
Higher Ed
Secondary
Formal Education (244m)
Basic Education
19
Key Challenges for LLL for China (1)
  • Fragmentation and Lack of Coordination of System
  • Many ministries involved controlling different
    parts
  • Growing private universities and training
    programs
  • Need for a More Integrated and Coordinated
    Approach
  • Need system that allows for multiple providers
    and multiple pathways to different levels of
    education and skills
  • This requires broad set of general rules and
    standards and coordination and mutual recognition
    among multiple systems
  • Great Needs, Limited Finance, Imply Need for
    Innovative Approaches
  • Govt cannot afford to finance increase in access
    and quality
  • Need to tap potential for private financing

20
Education expenditures from public and private
sources as share of GDP (1980-2001)
Source Angang Hu 2003
21
Funding Comparatives
. . . the most populous examples
Sources UNESCO 1999 2000 World Bank 2001 US
Department of Education 2001 Department of
Education Skills UK, 2002 China National
Center for Education, 2002/3 OECD 2002 All
Sth East Asian countries without China India
22
Financing Challenge of LLL Increasing Resources
for and Productivity of Education
  • Increase public resources for education
  • Increase students contributions to cost of
    delivering public education, including loans
  • Increase private provision of education and
    training
  • Develop student loan and education finance market
  • Improve the productivity of education
  • Improve the incentive regime and management of
    education systems
  • Improve knowledge management in the education
    sector
  • Reduce the time it takes to get different levels
    of education
  • Improve the pedagogy of education
  • Use new ICT technologies more extensively

23
Key Issues in LLL for China (2)
  • Poor Demand Supply Links of Education and
    Training to Labor Market
  • Mismatch between skills supplied and needs of
    market
  • Poor information on career options, income
    streams, quality of different providers
  • Need for Massive Upgrading of Skills
  • Require innovative ways to reduce skills gaps of
    population already in labor force
  • Need to put in place system to continuously
    upgrade skills
  • Need to Improve Quality and Content
  • Quality at all levels low
  • Need to improve assessments
  • Need to reform curriculum and teaching pedagogies

24
Key Issues in LLL for China (3)
  • Need to Realize Potential of ICT Technologies to
    Expand Access and Quality of education and
    training
  • Need to develop more providers
  • Need to help create more content
  • Need for Accreditation, Vocational Qualification
    and Certification
  • Need better accreditation of education and
    training providers
  • Need effective system for assessing and
    certifying vocational qualifications (and not
    necessarily just by government)

25
Need for Greater Partnership between Governments
Private Sector in Education
  • Government has key role as architect and
    coordinator of life long learning system
  • Legislation / Regulations and standards / Quality
    assurance
  • Equity
  • Finance
  • Information on needs of dynamic and rapidly
    growing system
  • quality of different education and training
    providers, and qualifications and competencies of
    people
  • Encouragement for development of specialized
    intermediary institutions to fill gaps
  • Key private sector role
  • Increasing tuition payments by students in public
    system
  • Increasing provision of education at all levels,
    but especially higher education and training
  • Helping develop the education market finance,
    information, content, standards, qualifications,
    accreditation

26
Spending Per Student Tertiary Sector
US per Student (in Constant 1995 US)
816 5 decrease
856
Sources World Bank Development Indicators World
Bank Edstats UNESCO Global Education Digest
OECD Education at a Glance IFC calculations
Developing Peers includes Angola, Argentina,
Bangladesh, Bolivia, Brazil, Bulgaria,Chile,Colomb
ia, Dominican Republic, Ecuador, Egypt, Ghana,
Guatemala, Hungary, Indonesia, Jamaica, Jordan,
Kenya, Madagascar, Malaysia, Mauritius, Mexico,
Mozambique, Pakistan, Peru, Philippines, Poland,
Romania, Russia, Senegal, South Africa, Thailand,
Trinidad Tobago, Turkey, Uganda, Uruguay, and
Vietnam
27
Education Expenditure Comparatives - 2003
China needs around 50 increase on current public
expenditure to exceed world average
28
China Projected Enrollments
2000 to 2020
Millions
Source ? ? Zhang Li December 2004 - ??
?????????? - ?? - ????????? -
National Center for
Educational Development Research, MOE, China
29
Three things that attract
private sector investment !
  • Positive regulatory environments
  • Financial incentives and returns
  • Opportunities for good corporate citizenship

30
Private Investors Will Avoid . . .
  • Ineffective regulations and frameworks
    commercial uncertainty
  • Political instability
  • Revenue controls / capping tuition fees
    can
    heighten commercial risk where marginal returns
    exist can jeopardize commercial
    objectives, including capability to invest in
    higher quality inputs
    can cause insufficient financial returns
    for servicing debt, or to provide fair returns
    to shareholders
  • Uneven playing fields where loans to Govt.
    hybrids SOEs are made on soft / favored /
    not-real-profit basis where vested interests
    are impervious to change
  • Inefficient / inconsistent / uneven approval
    processes where
    private investors are disadvantaged

31
Public Private Partnerships Success Factors
  • No revenue controls (eg. capping tuition fees)
  • (Foreign) no limiting equity ownership
  • Even treatment of public and private providers
  • Meets market demand (eg. growing demand for
    skilled labor)
  • Incentives for private investment and
    participation financing and
    provision
  • Positive regulations for private investment
    more enabling and less
    controlling

32
Examples of Risk Sharing Structures
Examples
Scenario 2
Scenario 1
Local Bank 79
Local Bank 50
Third Level
IFC 10 Foundation 10

Mezzanine Level
IFC 10
University 5 Local Bank 6 Total
11
University 10 Foundation 10
Local Bank 10 Total 30
First Level
33
Eduloan - South Africa
private financing for
students attending public institutions
  • Started Yr 2000/01 initial IFC investment
    US2.8 million
  • Payroll-based lender collections through
    payroll deductions
  • Students are working bank/employers share the
    risk
  • Access to public University Technikon
    programs soon extends to professional training
    including nursing and other programs
  • Delinquencies have been low (less than 2)
  • EO 2003 there were 49,000 students being
    financed expected to reach US 40 million
    portfolio (est 97,000 students) by EO 2006
  • Loan amounts per student are small - est. up to
    US 500 range
    repayable within 12 months

34
New innovations for donors . . .
Donors are beginning to look
for other options
how to better optimize the use of available
funds
Traditional model
25 million 5000 FTE students _at_ 5000 tuition
fees
35
1
Example Only
The Advent Of Donor Interest In Partnering With
Local Banks Investors?

Less 0.5m
40
30
40m 8000 FTE Students
36
Previous vs. New
New
40m 8000 FTE Students



Total 5000 FTE Students
Total 11000 FTE Students
37
1
Example Only
The Advent Of Donor Interest In Partnering With
Local Banks Investors?

Less 0.5m
40
30
40m 8000 FTE Students
38

The Next Wave . . .
myth or reality?
Donors are interested in risk sharing initiatives
to leverage private sector financing
What about governments?
39
World Bank Group
4 decades of education lending
65
22
Projects supporting more than one level of
education or projects such as those supporting
lifelong learning that do not fit well into one
of the other categories
40
IFCs Growing Education Portfolio
  • Universities
  • Colleges
  • Technical Vocational Education Training
  • Education Communications Technology Platform
  • Schools
  • Education financing facilities

    student financing

    smaller institutions

    special purpose funds

41
PPPs todays examples
  • Private provision supplementing delivery to
    remote / distance settings
  • Private sector technology and communications
    solutions for public institutions
  • Private foreign providers internationalizing
    curriculum with local public providers
  • Foreign private investors partnering with public
    institutions in local joint private/commercial
    initiatives
  • Private medical school partners with a public
    hospital to become a teaching hospital

42
PPPs todays examples
  • Private agency establishes degree granting
    institute and provides programs on behalf of a
    public regulatory body
  • Private institution establishes information
    centers / libraries for public institutions
  • 8. Private banks establish student financing
    facility for public and pvt institutions

43
??? . . . ???!
It doesnt matter if a cat is
black or white . . . .
as
long as it catches mice.
Deng Xiaoping
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