China’s New Vocational Skills Training Initiative: Opportunities for FIEs

China’s new Vocational Skills Training Initiative (2025–2027) aims to upgrade workforce capabilities across strategic sectors, improve labor inclusion, and align training with market needs. For foreign investors, it offers enhanced access to skilled talent and new opportunities in education, training, and industry partnerships.

In July 2025, the Leading Group for Employment Promotion and Labor Protection under China’s State Council issued the Guiding Opinions on Launching a Large-Scale Vocational Skills Upgrading Training Initiative (hereinafter referred to as the “Opinions” or the “Training Initiative”). The Opinions set out a comprehensive framework for improving labor force skills nationwide over a three-year period, from 2025 through the end of 2027. 

As a key component of China’s broader strategy to achieve high-quality development, enhance workforce productivity, this initiative particularly aims to address structural mismatches in labor supply and demand, particularly in high-tech, service-oriented, and emerging industries. It also reflects the country’s commitment to strengthening domestic economic resilience in response to external shocks and intensifying global competition. 

The Training Initiative spans a range of industries, including advanced manufacturing, digital economy, transportation, agriculture, and life services, with a particular emphasis on cultivating talent for strategic and innovation-driven sectors. Specific measures include establishing dedicated training schemes within national industrial clusters, supporting the growth of digital and low-altitude economies, and accelerating rural talent revitalization. 

Crucially for foreign-invested enterprises (FIEs), the plan is expected to expand the availability of skilled labor across key economic zones, facilitate industry-academia cooperation, and create new investment opportunities in vocational education, training services, and human resource development. 

In this article, we unpack the policy’s main features, sectoral priorities, and implementation mechanisms, while assessing its potential impact on foreign investors operating in – or planning to enter – the Chinese market. 

Overview of China’s new vocational skills training initiative

Policy scope and timeline

Spanning seven thematic sections and comprising twenty articles, the Training Initiative runs from 2025 through the end of 2027. It aims to mobilize training for over 30 million people, prioritizing urgently needed skill sets in strategic industries, services, and rural revitalization. 

It emphasizes a demand-driven, market-aligned training system underpinned by a partnership between government, enterprises, and vocational institutions. 

Strategic objectives

Find Business Support

How we can help companies leverage growth prospects in China's vocational education and training industry

At the core of the Training Initiative are three strategic objectives. First, it aims to close talent gaps in high-demand sectors such as advanced manufacturing, the digital economy, and modern services, critical areas for sustaining innovation and growth. Second, it seeks to build a future-ready workforce equipped with digital and technical skills, enhancing adaptability amid rapid industry shifts. Third, the initiative focuses on improving labor income and promoting inclusion by expanding access to quality training for groups facing employment barriers, including youth, migrant workers, and the unemployed. 

Sectoral focus

The Training Initiative mandates tailored training programs across core industry clusters: 

• Advanced manufacturing: Training targets high-demand areas like smart equipment, aerospace, new energy vehicles, biomedicine, and semiconductors. Special emphasis is placed on “little giant” firms and manufacturing champions. 
• Digital economy: Programs focus on AI, embodied intelligence, data security, and digital engineering. Training delivery will leverage university platforms and national smart education systems, including the rollout of localized foundational AI models. 
• Low-altitude economy: Given the rapid expansion of this sector, training supports drone manufacturing, infrastructure operation, and airspace services. 
• Transportation & Logistics: Initiatives target logistics, postal services, railway, civil aviation, and maritime operations, with a focus on reskilling and safety qualifications. 
• Agriculture and rural revitalization: Training is aligned with talent rejuvenation in the countryside, including rural entrepreneurship, modern farming practices, and the cultivation of local artisans and agritech specialists. 
• Life and public services: Emphasis is placed on eldercare, domestic services, and tourism. Training includes job-readiness, caregiving certification, and public culture management. 

Priority groups: Supporting inclusive workforce development

A key strength of the initiative is its inclusive design, tailored to the needs of diverse workforce groups. For enterprise employees, it supports in-service training and cross-functional skill development to meet evolving job demands. For the unemployed, it offers targeted guidance, subsidized training, and job placement support. 

Youth, especially graduates and NEETs, are a priority under the “1 Million Youth Upskilling Campaign,” which promotes work-study programs, apprenticeships, and project-based learning to build market-ready skills. 

Migrant workers and rural laborers also benefit from customized programs addressing regional skill gaps and access barriers—especially for older workers and those in sectors like construction—aimed at improving both employment outcomes and income security. 

Enhancing quality and delivery mechanisms

To ensure training is both effective and scalable, several operational models are promoted: 

• Enterprise-led training: Large companies are encouraged to serve as training hubs, opening internal resources to upstream/downstream firms. Support is provided to build practical training bases and develop shared training platforms. 
• Institutional support: Vocational and technical colleges are tasked with expanding short-term, employment-oriented courses and micro-credential programs. Public-private collaboration is key. 
• Project-based training: Training is organized around real job demands, integrating “job needs + training + certification + job placement” into a single pipeline. Regional coordination allows for cross-provincial delivery. 
• Standardization and digitalization: Training modules are modularized and offered through hybrid (online-offline) formats. Certification and assessment systems are standardized using national occupational benchmarks and evaluation platforms. 

Skills certification and career advancement

The government aims to strengthen the credibility and circulation of vocational certification. Key measures include: 

• Promotion of the “New Eight-Level Worker” skill classification system; 
• Allowing qualified enterprises to conduct in-house skill assessments; 
• Removing rigid prerequisites (such as, work years or rank) for recognizing talent; 
• Aligning certifications with academic degrees and job titles under a proposed National Qualifications Framework. 

Pay schemes in state-owned enterprises (SOEs) and private firms will be adjusted to reward skills acquisition, linking salaries to certifications and technical proficiency. 

Regulatory agencies will enhance oversight of training delivery and outcomes, using a mix of self-evaluation, third-party reviews, and government audits. 

Implications and opportunities for FIEs

Enhanced access to skilled and diverse talent

One of the most immediate benefits of the Training Initiative for FIEs is improved access to a more skilled and adaptable workforce. The initiative targets high-demand sectors such as digital technologies, advanced manufacturing, and healthcare—industries where many FIEs are active. 

Find Business Support

For more information about salary benchmarking in China, contact our HR and Payroll team ⟶

As training programs become more aligned with market needs and national certifications are standardized, companies will find it easier to hire job-ready talent, particularly in inland provinces and lower-tier cities where labor shortages have historically been a challenge. The inclusion of underserved groups—migrant workers, unemployed youth, and rural laborers—also expands the overall labor pool available to FIEs. 

New avenues for public-private training partnerships

The policy framework explicitly encourages enterprise-led training and cross-sector collaboration, offering FIEs an opportunity to take a more active role in workforce development. Companies may: 

• Partner with vocational schools and training institutions; 
• Participate in industry training alliances; and 
• Establish in-house training programs recognized under national standards. 

FIEs with established operations in sectors like automotive, aerospace, and consumer electronics are well-positioned to co-develop curricula, offer apprenticeships, and contribute to regional training hubs—particularly in collaboration with local governments and industrial parks. 

Investment opportunities in the vocational training ecosystem

China’s push to digitize and modularize vocational training is also creating new investment opportunities, especially in: 

• Edtech and digital learning platforms offering AI-based adaptive learning, VR simulations, or online certification; 
• Corporate training services tailored to specific industries or technical functions; 
• Assessment and certification providers, including international partners under China’s National Qualifications Framework. 

These areas are seeing strong policy backing as China aims to diversify its education ecosystem and attract private capital under regulated conditions. 

Sector-specific opportunities lie in the fields of: 

• Advanced manufacturing: Greater availability of certified CNC operators, maintenance engineers, and industrial technicians can reduce recruitment time and improve production quality for FIEs in smart manufacturing and automation. 
• Healthcare and eldercare: Training expansion for caregivers, medical assistants, and rehab workers directly supports foreign healthcare providers and medical device companies facing labor constraints in China’s aging society. 
• Digital economy: Firms in cloud computing, AI, cybersecurity, and digital platforms will benefit from state-supported digital upskilling efforts, helping localize technical operations and scale efficiently. 

Regional implementation and strategic alignment

While the Training Initiative is nationally led, implementation is highly localized, with provincial and municipal governments overseeing funding, content development, and coordination with local enterprises. This decentralized model creates opportunities for FIEs to align their training needs with local development strategies. 

• Industrial parks and economic development zones are being transformed into talent hubs, offering training facilities, employee certification subsidies, and R&D support. 
• Key economic regions, including the Guangdong-Hong Kong-Macao Greater Bay Area (GBA), Yangtze River Delta, and Hainan Free Trade Port, are embedding training initiatives into their broader talent development frameworks: 
  • Guangdong is piloting AI-focused training centers integrated with regional manufacturing bases. 
  • Zhejiang is combining industry input with vocational curriculum reform through the launch of joint training models. 
  • Hainan is promoting bilingual and internationally recognized healthcare training to support free trade goals. 

These pilot programs signal how training policies may be replicated across provinces with strong FDI inflows, especially those with emerging industrial clusters or high inbound FDI, offering FIEs locational advantages for workforce development. 

Conclusion and outlook

Find Business Support

Onboard your Asia team quickly with our PEO with EOR services ⟶

China’s Vocational Skills Training Initiative reflects a broader strategic ambition: to build a resilient, innovation-driven workforce that can sustain the country’s shift toward high-quality development. By integrating labor policy with industrial upgrading goals — including Made in China 2025, rural revitalization, and digital economy development — the initiative addresses both current employment challenges and future economic transformation needs.

As China continues to elevate the role of skills in shaping socioeconomic mobility and industrial competitiveness, foreign-invested enterprises that align with this policy environment will be better positioned to recruit, retain, and develop top-tier local talent, ensuring business resilience in a rapidly evolving market.

• Previous Article China Rolls Out Additional Policies to Boost Foreign Firms’ Reinvestment
• Next Article EU-China Relations After the 2024 European Elections: A Timeline