National Skill Formation Systems: Theory and International Experience

This introductory chapter frames the central puzzle of China’s vocational education and training (VET) reforms: why persistent skill shortages and mismatches endure despite sustained policy attention and institutional investment. It identifies three core challenges that guide the book’s analysis—underinvestment in training, misalignment between education and labor market needs, and an imbalance between general and firm-specific skills—and situates them within broader theoretical debates on human capital formation, internal labor markets, and the governance of skill development. Drawing on international experiences from Germany, Japan, Singapore, and other advanced economies, the chapter highlights how effective national skill systems rely on coordinated institutions—particularly industry-level actors such as employer associations—to ensure standardization, quality, and transferability of skills. Finally, it provides a roadmap for the book: after this conceptual foundation, the next three chapters present empirical investigations into China’s VET reforms, followed by a concluding chapter that synthesizes findings and discusses policy implications.