In June, new incentives were released by multiple government authorities to encourage companies to start training programs and apprenticeships in China to up-skill the country’s workforce, considered necessary to enhance capacity for advanced manufacturing and high-tech innovation.
China has released new incentives to encourage companies to set up apprenticeship programs, as the country seeks to up-skill its workforce.
On June 8, 2021, the Ministry of Human Resources and Social Security, the Ministry of Finance, and three other authorities jointly released the Guidelines on Comprehensively Implementing the New Apprenticeship System of Chinese Characteristics in Enterprises and Strengthening the Cultivation of Skilled Talents (the “Guidelines”).
The system will allow employers to claim an annual subsidy of up to RMB 5,000 (US$775) per apprentice to finance vocational training programs.
The apprenticeship system represents the latest effort by Chinese policymakers to encourage companies to work towards ambitions to transition the economy towards advanced manufacturing and technological innovation.
Who qualifies for an apprenticeship?
The apprenticeship program aims to give new recruits and mid-career professionals on-the-job experience and vocational education to prepare them for careers in skilled technical positions. Besides training employees, the program encourages companies to upgrade their technological innovation capacity and competitiveness.
Both newly recruited employees and current employees transferred from another role are eligible to participate in the apprenticeship program. To qualify, the company must have signed the employee to a labor contract of at least one year in length, paying them at least the local minimum wage.
The Guidelines state that mid-level workers, senior workers, technicians, and senior technicians that meet company needs are the main targets of the apprenticeship program. As such, the program primarily aims to augment the skills of experienced workers, rather than students newly graduating from education programs.
Apprenticeships are generally one to two years long, but companies can extend them to a total of three years under special circumstances.
What educational content is eligible?
The apprenticeship program targets companies that meet China’s needs to upgrade its industrial and manufacturing sectors to become more technologically advanced, such as those that fit under the country’s Digital China and Internet+ strategies.
More specifically, training provided by apprenticeships should correspond with China’s national vocational skills standards and specific industry standards. In particular, the Guidelines emphasize digital skills, green skills, production skills, quality control, innovation, safety, hygiene, and others.
To qualify as an apprenticeship, the company must provide training courses with credit systems. Small companies that lack resources to set up programs themselves can contact local branches of the Federation of Industry and Commerce to organize shared training courses with other enterprises.
Before starting the apprenticeship, companies need to sign a training agreement with the employee that states the training objectives, content, and duration, as well as how they will make assessments. If there are multiple apprentices for similar roles, the two sides can sign a collective training agreement.
Companies are also encouraged to enlist an outside vocational education provider to carry out the training on their behalf.
How can companies claim training subsidies?
Companies can apply for annual training subsidies of up to RMB 5,000 (US$775) per apprentice, with the total amount corresponding to the length of the training period.
To qualify, companies must provide the Ministry of Human Resources and Social Security with materials such as training plans, labor contracts, and other documents required by the local bureau. Once approved, the company will be provided with subsidy funds in advance.
Likewise, after the employee completes the apprenticeship program, companies must submit an education certificate, training materials, and fees issued by the training provider to the bureau to confirm the company carried out the program.
While not required, the Guidelines also encourage companies to offer mentors within the company an allowance, and to establish scholarships and other incentives to encourage employees to capture vocational education opportunities.
China’s need for skilled workers
China’s new apprenticeship program comes amid a drive for technological upgrading, as seen through programs such as Made in China 2025, as well as concerns over worker shortages. Given these priorities, the Chinese government set a target to train over 50 million people using government subsidies by the end of the year.
China’s manufacturing sector has been facing a worker shortage for years, but the COVID-19 pandemic pushed even more manufacturing workers towards service sector jobs. According to a survey of 90,000 companies released by China’s statistics bureau in April, 44 percent of industrial firms cited recruitment of workers as their biggest obstacle.
In January, the Ministry of Human Resources and Social Security released a list of the 100 jobs facing the worst labor shortages, of which 36 were related to manufacturing. According to the ministry, these 100 occupations had a combined 1.418 million open positions in the fourth quarter of 2020.
China’s skills training goals offer growing opportunities for vocational education providers. On June 7, the Standing Committee of the National People’s Congress began deliberating revisions to the Vocational Education Law, including the possibility that policymakers will give vocational education given equal importance to general education, and allow vocational schools to have more operational autonomy.
In light of these trends, the government will likely provide vocational education providers with new opportunities and incentives in the near future, while companies will continue to be encouraged to enlist their services.
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