Page 352 - 2019 White Paper on the Business Environment in China
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9 White Paper on the Business Environment in China
become an important segment in the overall education The city with the largest enrolment is Guangdong,
system. Total revenue generated in the private education where 45,600 Chinese children currently attend its 103
industry has been increasing from 124.1 billion yuan (or ICPS schools. Also seeing significant growth of such
US$19.7 billion) in 2012 and is expected to reach 325.5 schools and student enrolment are Jiangsu, Zhejiang
billion yuan (US$51.7 billion) in 2020, representing a and Shandong. It’s a market that will continue to
compound annual growth rate of approximately 12.1 develop in China as the country’s expanding affluent
percent. Private companies are taking market share from population demands a more western style of learning
public schools across all sub-segments. The penetration for their children. Over the next 15 years, the number of
rate of private primary schools, private middle schools high-income families who will be able to afford private
and private high schools will increase from 7.4 percent, education is expected to double in several of China’s top-
11.7 percent and 10.8 percent in 2015, respectively, to tier cities. Many ICPS schools are under development
8.9 percent, 13.8 percent and 12.8 percent in 2020. This in response to this, particularly in Guangdong and
suggests that private education is increasingly more Zhejiang but also in cities where international education
popular in China and is considered a higher quality for local Chinese children is only just emerging, such as
choice for the rising middle-class population. Private Sichuan, Shaanxi and Fujian. Parents in many tier 1, 2
education has some inherent advantages over the and even 3 cities are looking for more choices when it
public fundamental education providers. Most private comes to education for their children (ISC).
schools have flexible enrollment plans and rely less on a
student’s background, test scores and residence status. The total number of private schools, all types
The curriculum offered by private education providers and all levels included, in 2016 reached 171,000 and
is also more flexible and diverse. While public schools accounted for 33.4 percent of all schools in China. The
are reluctant to make changes due to the requirements number of students in 2016 in these schools totaled
of governmental departments, private schools are over 48 million, accounting for 18.2 percent of the
willing and able to provide broader curricula and more total number of students in China (Education in China).
flexibility on tuition charged (Flannery). China plans to improve the regulations on establishing
private schools, according to a draft amendment to
The number of parents selecting a local private the regulation regarding non-government funded
school that offers an international education, teaches in education. The government announced in 2018 that
the English language, and enables students to achieve it will encourage the establishment of more private
globally recognized qualifications is growing in many schools by providing subsidies according to the
countries of the world, but none more so than in China. number of students enrolled, tax breaks, discounted
This growth is being fueled by the substantial increase price for utility services and preferential treatment for
of an affluent middle-class who can afford private land use. There are, however, a few caveats. Foreign-
education for their children, coupled with increasing funded enterprises and social organizations controlled
aspiration by parents to prepare their children well for by foreign entities or individuals are not allowed to
good higher education and career opportunities in the establish or control schools providing China’s nine-
west. Today, 60 percent of all children enrolled in China’s year compulsory education. Public schools are not
international schools are Chinese citizens. It is a figure allowed to establish profit-led private schools while
that is predicted to rise significantly as more Chinese- establishing non-profit private schools should be
owned private international schools, which are allowed approved by authorities. Non-profit private schools
to admit local children, are established. The number established by public schools cannot use fiscal
of International Chinese-owned Private Schools (ICPS) funding or affect teaching activities of public schools
has grown by an average 13.6 percent per year since (Xinhua, China to Improve). The draft regulation is
2012, and the enrolment of Chinese students attending not unexpected. It is likely to be some time before it
these schools has grown by 17.2 percent during the comes into effect. Foreign partners in China may need
same time. Most of these schools are delivering a dual to consider how the regulations will impact upon its
curriculum program (a foreign curriculum blended with structure in China in due course. but foreign partners
the local Chinese curriculum) in a bilingual environment may wish to raise a general query with their Chinese
where subjects learn in Mandarin and English. counterparts as to how they anticipate such changes
may impact upon their business structure (Abell).
352
become an important segment in the overall education The city with the largest enrolment is Guangdong,
system. Total revenue generated in the private education where 45,600 Chinese children currently attend its 103
industry has been increasing from 124.1 billion yuan (or ICPS schools. Also seeing significant growth of such
US$19.7 billion) in 2012 and is expected to reach 325.5 schools and student enrolment are Jiangsu, Zhejiang
billion yuan (US$51.7 billion) in 2020, representing a and Shandong. It’s a market that will continue to
compound annual growth rate of approximately 12.1 develop in China as the country’s expanding affluent
percent. Private companies are taking market share from population demands a more western style of learning
public schools across all sub-segments. The penetration for their children. Over the next 15 years, the number of
rate of private primary schools, private middle schools high-income families who will be able to afford private
and private high schools will increase from 7.4 percent, education is expected to double in several of China’s top-
11.7 percent and 10.8 percent in 2015, respectively, to tier cities. Many ICPS schools are under development
8.9 percent, 13.8 percent and 12.8 percent in 2020. This in response to this, particularly in Guangdong and
suggests that private education is increasingly more Zhejiang but also in cities where international education
popular in China and is considered a higher quality for local Chinese children is only just emerging, such as
choice for the rising middle-class population. Private Sichuan, Shaanxi and Fujian. Parents in many tier 1, 2
education has some inherent advantages over the and even 3 cities are looking for more choices when it
public fundamental education providers. Most private comes to education for their children (ISC).
schools have flexible enrollment plans and rely less on a
student’s background, test scores and residence status. The total number of private schools, all types
The curriculum offered by private education providers and all levels included, in 2016 reached 171,000 and
is also more flexible and diverse. While public schools accounted for 33.4 percent of all schools in China. The
are reluctant to make changes due to the requirements number of students in 2016 in these schools totaled
of governmental departments, private schools are over 48 million, accounting for 18.2 percent of the
willing and able to provide broader curricula and more total number of students in China (Education in China).
flexibility on tuition charged (Flannery). China plans to improve the regulations on establishing
private schools, according to a draft amendment to
The number of parents selecting a local private the regulation regarding non-government funded
school that offers an international education, teaches in education. The government announced in 2018 that
the English language, and enables students to achieve it will encourage the establishment of more private
globally recognized qualifications is growing in many schools by providing subsidies according to the
countries of the world, but none more so than in China. number of students enrolled, tax breaks, discounted
This growth is being fueled by the substantial increase price for utility services and preferential treatment for
of an affluent middle-class who can afford private land use. There are, however, a few caveats. Foreign-
education for their children, coupled with increasing funded enterprises and social organizations controlled
aspiration by parents to prepare their children well for by foreign entities or individuals are not allowed to
good higher education and career opportunities in the establish or control schools providing China’s nine-
west. Today, 60 percent of all children enrolled in China’s year compulsory education. Public schools are not
international schools are Chinese citizens. It is a figure allowed to establish profit-led private schools while
that is predicted to rise significantly as more Chinese- establishing non-profit private schools should be
owned private international schools, which are allowed approved by authorities. Non-profit private schools
to admit local children, are established. The number established by public schools cannot use fiscal
of International Chinese-owned Private Schools (ICPS) funding or affect teaching activities of public schools
has grown by an average 13.6 percent per year since (Xinhua, China to Improve). The draft regulation is
2012, and the enrolment of Chinese students attending not unexpected. It is likely to be some time before it
these schools has grown by 17.2 percent during the comes into effect. Foreign partners in China may need
same time. Most of these schools are delivering a dual to consider how the regulations will impact upon its
curriculum program (a foreign curriculum blended with structure in China in due course. but foreign partners
the local Chinese curriculum) in a bilingual environment may wish to raise a general query with their Chinese
where subjects learn in Mandarin and English. counterparts as to how they anticipate such changes
may impact upon their business structure (Abell).
352
