Preface Following on the World Banks 2001 publication, China and the Knowledge Economy: Seizing the 21st Century, this book is another exceptional product I would like to recommend to the Chinese audience. It represents three years of hard work by the authors in collaboration with Chinese experts, and the analysis and recommendations are extremely relevant for China. Today, many high-income countries are reshaping their human resource development strategies. In the face of increasingly fierce international competition, these countries are setting up lifelong learning systems as an essential national policy for maintaining their global competitive advantage. Although China has a vast population, it still lacks sufficient human talent. One of the countrys main strategies is therefore to develop such talent by turning the ostensible burden of its large population into a strategic advantage by changing its economic growth model from a resource-intensive one to a knowledge-intensive one. The essence of lifelong learning is to provide opportunities for people to learn throughout their lives. The Chinese culture has a tradition of placing a high premium on learning and on continuing education. An ancient proverb says “Never stop learning as long as you live.” This was true in the past, when knowledge grew slowly and life spans were short, and it is even more relevant today when science and technology make advances on a daily basis and people live twice as long as they did a thousand years ago. To establish and effective life long learning system China needs to expand preschool education, universalize primary education, strengthen secondary education, diversify higher education, and improve the labor training market to provide more learning opportunities. China is at a stage of development where it is experiencing rapid economic structural change. Over the last 30 years, about half of rural laborers have transferred into nonagricultural sectors, and about half have moved to the cities. This unprecedented population shift has driven Chinas fast-paced economic growth. However, the ensuing rapid industrialization and increased demand for skilled laborers requires an effective education and training system to quickly enhance the skills level of rural laborers, enabling them to benefit from wage increases, improved welfare, and full employment. On-the-job learning has become an important channel for Chinas more than 700 million workers to absorb new knowledge and acquire the necessary skills. At the same time, the rapid transformation of the economic structure has increased structural unemployment, making training a prerequisite for the unemployed to find new jobs; and, with deepening reforms in the public sector, more government workers will be laid off and will need to be retrained. In addition to formal education, this will require a multifaceted continuing education and training system; an effective skills assessment and accreditation system; and deployment of modern information technology to expand training opportunities. Although the overall labor supply in China is still larger than the demand, there is an emerging issue around the structural undersupply of labor. Even though China has much lower tertiary enrollment rates than do high-income countries, many college graduates cannot find jobs because of a serious mismatch between school education and social and economic demand. Formal education falls short of the requirements of a lifelong learning system in terms of teaching methods, curriculum, and pedagogies, and needs to be adjusted to respond to the new demands of economic and social development. Nonformal education (vocational education and training) faces similar problems. Although there are numerous training programs and “certificate mills,” their fees and quality are not regulated; and a serious shortage exists of low-cost, high-quality training options for rural laborers and laid-off workers. A large number of rural surplus laborers, laid-off urban dwellers, and other unemployed people are unable to secure employment or re-employment through existing training programs. In addition, learning facilities and methods are out of date, and modern information and communication technologies (ICTs) need to be further harnessed. International experience shows that ICTs can expand learning channels at lower cost and with greater convenience, thereby better addressing the requirements of lifelong learning. The government of China is developing satellite and broadband-based distance learning to reduce education costs, improve learning efficiency, and provide learning opportunities for poor remote regions. China still has a long way to go in building a lifelong learning system and a learning society. The main problem is the serious shortage of investment in education and training. The government cannot bear all the costs of financing the system; and the shorta