China’s cancellation of private education

On July 24, China passed new private education regulations. The rules included the banning of core-curriculum private tutoring during weekends and school holidays, affecting all students under senior secondary school age. The Chinese government has since ceased the approval of new tuition centres, with existing ones forced to convert to non-profit institutions. Foreign curricula and foreign remote teaching have also been banned; a huge loss to tutors abroad, and affecting many edtech companies like Vipkid, whose success majorly relied on connecting students to foreign teachers. Further to this, limits were set on the times during which students could attend classes, restricting schedules to no later than 9 pm on weekdays, with only extracurricular classes to take place on weekends.

The main motivator behind these stringent regulations resides in the damaging effect the famous education rat race has on parents and children. In 2016, more than 75% of pupils aged 6 to 18 in China were tutored outside the classroom, a huge number of children whose schedules are filled with additional classes. Early on in their education careers, students face enormous stress as they prepare for the yearly gaokao university entrance exam; a single exam determining which school students can get into. This ultimately has a knock-on effect on students’ careers and how fit they are for their futures. The pressure is considerably high for new generations to have the means to support their parents and grandparents into old age. This is because longer life expectancy and declining fertility rates mean that China has one of the fastest-growing ageing populations, with the population of people over 60 expected to reach 28% by 2040. At first glance, these regulations appear to be beneficial to lessen the pressures of excessive studying and promote a shift in focus to extra-curricular aspects of students’ lives.

Similarly, the regulations target the large financial burden on families to provide private tutoring. Not only does this impede on “chicken parenting” caused by parents becoming too obsessive of their children’s lives and education, a fear that private educators are accused of exploiting, these regulations will also attempt to keep the education level at an equal level to all Chinese students. Especially since 3 in 4 children grow up in rural areas where access to education is severely limited. With parents spending an average of 120,000 yuan (US$17,400) a year on private tutoring, it is clear this presents a large financial cross for families to bear, exponentially raising the overall cost of raising a child in China. According to a report in 2005 by a state think-tank, the cost for an ordinary family in China to raise a child is 490,000 yuan ($74,838), with estimations that it will rise to as high as 1.99 million yuan. This is a significant deterrent to an already hesitant population to have children, a problem that emerged following the disaster of the one-child

policy. Despite the recent three-child policy passed in May, census data revealed China’s population growth in 2020 to stand as low as 0.42%, which did not manage to meet the government’s optimistic predictions. With the population predicted to peak in 2030, it is clear why the government is so urgent at enforcing such rigorous regulations.

However, China’s private education ban may prove to cause more problems than solutions. Demands for private tutoring have not lessened, and so a black market for private tutoring has started to take effect. Many teachers are now doing underground tutoring, showing up to homes undercover as domestic helpers or repair workers. But it is harder to find teachers on the black market, and the prices are getting higher, as a result, resulting in fees of at least 3,000 yuan (US$43,500). China’s wealthiest and most well-connected families are more able to afford this. They are also more capable of evading the new rules by shifting to online lessons and paying through foreign payment systems. They have more opportunities to get their children accepted into one of China’s many international schools, or can simply move abroad. Instead of promoting educational equality, China’s ban on private tutoring may instead yield the converse effect of deepening the wealth gap further.

Additionally, the economic implications for edtech companies following these regulations are detrimental. The tutoring industry, having received a major boom following the pandemic, is estimated at 811 billion yuan (US$125 billion) in 2021 by Frost & Sullivan. Having since been upended, major edtech companies are now losing 50-80% of their revenue. Leading Chinese edtech companies like TAL Education has lost 93% of their value, while Wall Street English, once regarded as a high-end language training centre, has now bankrupt. The same is true for many companies in this industry, with thousands of employees made redundant as a result of China’s private education ban.

Surface-level, China’s new private education regulations appear to be beneficial in solving key financial issues for parents and students, as well as encouraging a baby boom to combat the declining fertility rates. However, wealthy families will certainly find loopholes around the new system, inevitably gatekeeping poorer families from accessing the same level of education for their children.