BEIJING, PEOPLE’S REPUBLIC OF CHINA (20 September 2017) — The Asian Development Bank’s (ADB) Board of Directors has approved a results-based loan of $250 million to help establish a demand-driven technical and vocational education and training (TVET) system in Guangxi Zhuang Autonomous Region.

In addition, KfW, the German government development bank, is expected to provide an equivalent of $200 million in cofinancing. Both institutions will support the Guangxi government’s TVET system reform program based on a common results framework.

“As Guangxi struggles to make TVET relevant to industry demand and boost its quality, not all graduates gain the necessary competencies in the areas they were trained in and many often leave their first job within 6 months,” said Asako Maruyama, Education Specialist at ADB’s East Asia Department. “The program will support key interventions designed to improve the industry relevance, quality, and inclusiveness of TVET, and expand regional cooperation and integration in TVET.”

Guangxi’s economic structure has shifted significantly since 2000, with primary industry shrinking and secondary industry expanding, supported by steady economic growth. Its growth prospects are robust, as Guangxi aspires to become the People’s Republic of China’s (PRC) gateway to the Association of Southeast Asian Nations (ASEAN). However, concern is growing that a shortage of skilled labor slows down socioeconomic development in the province.

As the government promotes the development of key traditional industries, as well as emerging and strategic industries that require intermediate and high-level skills, skilled labor shortages are becoming acute. Despite its strong economic growth, Guangxi remains one of the poorest provinces in the PRC, ranking 27th out of 31 provinces in terms of per capita gross domestic product in 2015. As one of the five ethnic minority autonomous regions, Guangxi has the largest ethnic minority population in the PRC. TVET enrolls many students from disadvantaged backgrounds because of its affordable tuition and lower entry requirements.

With ADB’s assistance, Guangxi will seek to enhance industry relevance by implementing industry advisory plans, piloting competency-based training approach in collaboration with industry, and establishing practical training facilities in cooperation with enterprises.

Guangxi will also set up a new batch of model TVET institutions meeting provincial standards, assess and certify industry experience of technical teachers, and improve the monitoring and reporting of TVET institutions to inform TVET delivery.

To promote regional cooperation and integration, selected TVET institutions in Guangxi, ASEAN TVET institutions, and enterprises will establish long-term partnership training and cross-border training programs.

As many students from poor families and rural areas enroll in TVET, they will directly benefit from improvements in the relevance and quality of TVET. The program will provide financial assistance and other support so they can complete and obtain employment after graduation. These interventions are expected to increase the number of TVET graduates who stay in their first job for more than 6 months.  

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members—48 from the region. In 2016, ADB assistance totaled $31.7 billion, including $14 billion in cofinancing.