Study On Reform And Development Of Fiscal Support Mechanism For The TVET In China

The TVET (Technical and Vocational Education and Training) is a vital category, which can improve labor productivity and increase labor supply, to economy development and people’s livelihood and the priority of investment for the fiscal. Nowadays, the economy in China entered a period of Medium-high economic growth situation called "New Normal" with characteristic of structural economic slowdown, decline of supply efficiency of production factors, lack of technical innovation. So, in consideration of insufficient domestic and overseas market demand to support economy development, supply-side reform is importantly essential for China to boost the economy. While the TVET is an effective way to increase the supply of labor factors and to raise the level of technical innovation, the support and guidance of the fiscal is essential for reform and development of the modem TVET system. Comprehensively deepen the reform of the fiscal in supporting the TVET system, we should start form the top-level design and enhance the labor factors supply by institutional supply, finally to realize healthy and stable economic development in China.This paper brings focus on the mechanism of the government in supporting modern TEVT system, with a way of theoretical analysis, normative analysis and literature summarizing, aims to discuss the following questions in these aspects:1. Why should the government support the reform and development of the TVET? 2. How could the government, Theoretically, support the TVET system in an effective way? 3. What challenges and problems has the TVET faced at this stage of development? 4. How to improve the system and mechanism of fiscal finance in supporting the TVET system to realize sustainable development?This paper is divided into 7 chapters with following more details:Chapter I is literature review of academic view about fiscal finance support to vocational education. There are different views about this question. While the school of Balogh advocated that government should put lots of money into vocational education and running formal school vocational education, the school of Forster declared the less intervention should government give to vocational education and limited function of government in supporting TVET, which is widely accepted in academic community. With the process of economic globalization, there is increasingly more attention to the effect of the TVET. As for China, the views of fiscal support to the TVET are insistently positive, and theoretical research are mainly focused into 3 aspects of higher vocational education, secondary vocational schools and vocational schools in country area, involving financial investment, fiscal equity and performance evaluation, etc.Chapter II mainly describes the necessity of the fiscal in supporting the TVET system. Because that vocational education is a "market failure" area with characteristics of public goods and positive externality and need the intervention of the government. Besides, increasing the fiscal support to the TVET system fits the particular needs in China of industrial transferring and upgrading and population development strategy at this stage.Chapter Ⅲ is mainly the theoretical description and realistic analysis about fiscal support to the TVET system. At first, the paper applies the general equilibrium model of public goods to the development reality of the TVET in China and draw a conclusion that it is not enough for the fiscal to fit up with demand of vocational education, but also to enhance full-employment and productivity. However, some relevant theories indicate that it is not sustainable to increase fiscal investment constantly and some reforms of mechanism are needed. Further, to deal with how could the mechanism-supply enhance labor-factors-supply, the paper introduces the principal-agent theory to explain the operation inefficiency of vocational education institution and then, gives advices in two ways:obtaining full information and increasing market competitors, according to the theoretical analysis of the game theory.Chapter IV summarizes the historical and current situation in fiscal supporting to TVET after reforming and opening up. In period of 30-years development and exploration after reforming and opening up, the goal set of the fiscal in supporting the TVET has increasingly developed, the requirement of talent training has continually raised. Following the goal set, the government has increased heavily investment to the TVET and policy measures are more and more various. The government appropriation mechanism for vocational education has changed according to the transition of policy measure, from setting up exclusive funds by central government to local government "Comprehensive Award" mechanism. The level of decision-making in supporting the TVET and governance capacity are increasingly improved.Chapter V is the challenges and problems the TVET faced at this stage of development in China. The main challenges and problems China faced are:1. There are absolute unsustainable problems in the TVET supporting policy system.2. There is still room for the fiscal to increase investment to the TVET.3. The Expenditure efficiency of government appropriation for the TVET should be improved.4. The fiscal encouragement measures for the TVET market competitive factors are inadequate.5. The Fiscal support to the TVET school-enterprise cooperation are inadequate.Chapter VI introduces the history and practical experience of fiscal support to TVET in foreign developed countries. The paper choses typical countries, such as England, America, Germany and Japan, to summarize their TVET system settings, development history of fiscal support to the TVET and nowadays mechanism of fiscal finance in supporting development of the TVET. Much attention is focused on the theories and Practices of "Neo-Vocationalism", successful practices of Germany in "Dual System" Modern Apprenticeship and "University-Industry-Government" running model in Japan, etc. According to the successful experience of developed countries, the paper brings out the suggestion that we should strengthen legislation establishment about fiscal support system, build fiscal support system to adjust local conditions and increase more attention to support life-long vocational education.Chapter VII is that, aiming at dealing with the challenges and problems above, the paper proposes reform suggestion to perfect fiscal mechanism in supporting modern TVET system. Around the topic of establishing modern TVET system, oriented to improve the quality and efficiency of the TVET, we should strengthen the cohesion between policy measures, form performance management mechanism of TVET expenditure per student, introduce some measures to encourage the TVET market competitive factors, deepen the mechanism of Modern Apprenticeships and increase the investment of life-long vocational education. By way of increasing institutional supply, we can quicken the step to establish modern TVET system, to enhance full employment, comprehensively to promote the process of urban and rural integration and finally to realize healthy and steady economy development in China.