The Chinese government promotes cooperation between colleges and companies in vocational education to improve the supply of skilled workers and increase labour productivity. This study employs the concept of positive coordination – negotiations concurrently addressing productive and distributive questions – to analyse the advantages and limitations of voluntary cooperation embedded in networks. In terms of production, many projects focus on updating, narrowing and deepening curricula to lower the costs of initial training borne by companies and the risk of labour turnover. In terms of distribution, however, the deep and narrow curricula are at odds with students’ preference for general and transferable skills; and the mutual commitments of both companies and students are uncertain. The solutions provided by cooperation are partial and unstable. Overall, they reduce skill mismatches but cannot control turnover or overcome market failure, which undermines tertiary vocational education's contribution to labour productivity.

The Chinese government has placed workforce upskilling at the core of its reform agenda to sustain the Chinese “economic miracle.” As such, the Ministry of Human Resources and Social Security (MOHRSS) and Ministry of Education (MOE) have each launched separate apprenticeship reforms geared towards enhancing China's oft-criticized vocational education and training system. Using a self-constructed theoretical framework, this article examines the two reforms and ascribes their divergent outcomes to the two ministries’ distinct approaches to institutionalizing their central initiatives (i.e. the top-down model followed by the MOHRSS versus the collaborative model of the MOE). However, given the absence of industry-level civil society governance in China, neither of these models has delivered ideal training outcomes, although the collaborative model has satisfied more employers and apprentices. China's skills-development reforms have thus become trapped in an institutional dilemma which is likely to impede the long-term economic restructuring efforts of the central state.