Page 356 - 2019 White Paper on the Business Environment in China
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9 White Paper on the Business Environment in China
demand for better living standards. Therein, heavy syllabus. The idea is to reduce the burden on primary and
schooling and extracurricular burdens on primary and secondary school students. The after-school institutions
secondary school students are specifically a reflection should also submit their course curricula, enrollment
of unbalanced and inadequate developments in the targets and class hours to local education authorities for
education sector (PDO). approval, the statement said. As Chinese parents often
spare no effort or expense to promote their children’s
In 2016, more than 137 million primary and education, a booming market has arisen for after-school
secondary school students attended extracurricular training, with all kinds of institutions established to give
classes, which had a combined market value of more children a head-start (Zou).
than 800 billion yuan (US$127 billion), according to
the Chinese Society of Education, which is overseen The MOE officialized the new regulations in 2018
by the Ministry of Education (MOE). A different study with Opinions of the General Office of the State Council
by the China National Children’s Center found that 48 on Regulating the Development of Off-Campus Training
percent of students attend after-school classes, and Institutions (The Opinions), marking the first time that the
more than half said they rarely have time to play with State Council had ever exercised its administrative power
friends. More than 90 percent of the 8,847 children to regulate the development of the after-school training
surveyed said most conversations they have with their market and that this move would play a pivotal role in
parents are about academic performance, while 14 keeping China’s school education from being disrupted,
percent said they had never spoken with their next- and more importantly, in protecting school children
door neighbors. Experts said that instead of blaming from burnout caused by extracurricular overload. To
parents and providers of extracurricular classes for the promote the long-term, orderly development of after-
situation, only a thorough overhaul of China’s exam- school training institutions, the Opinions set out specific
oriented education system would offer a real solution requirements in terms of establishment, approval
and reduce the burden on students. Extracurricular and registration, training practices, supervision and
classes are not cheap. They usually cost about 200 yuan management, interaction with school training, and
an hour. One-on-one “interest classes” such as learning organization and direction, as well minimum criteria for
piano or dancing can cost as much as 1,000 yuan per their venue facilities, trainer qualifications, and levels of
hour. Although there is heated debate about the effect management. As of August 2018, 382,000 after-school
of extracurricular classes, there is no doubt that their training agencies had been inspected, and 259,000 found
growing popularity is generating huge revenue for to be noncompliant (MOE Press).
providers. For example, in the first nine months of 2017,
the profits of TAL Education Group rose by almost 55 Because of the new regulations, China’s booming
percent year-on-year to about US$140 million. The rise after-school tutoring industry is ripe for further
came as the number of students attending TAL’s classes consolidation, with large players poised to gobble
surged to about 5 million, a rise of more than 86 percent up smaller rivals forced out by tougher government
from the same period in 2016 (Zou and Jiang). oversight and low profit margins. Big players most likely
to benefit are TAL Education Group, the world’s largest
The MOE announced that China will establish a private education company, and New Oriental Education
blacklist of unsafe or poorly operated after-school and Tech Group. Consolidation could result in better
training institutions for primary and secondary students quality teaching, as underperformers leave. However,
by the end of June 2019, as part of its oversight of the some students in smaller cities may be left behind as
rapidly expanding industry. The blacklist, which will some local centers shut their doors, although the big
be disclosed to the public, will name institutions that players are expanding their footprint with growing
have safety hazards, lack permits or have engaged in online offerings. But the government clampdown may
misconduct. Local education authorities will also publish also lead to some smaller players raising their game and
a list of training agencies that are devoid of problems. A becoming stronger, for example by capitalizing on their
statement released by the Ministry said that, teachers early edge in smaller cities. China’s segmented tutoring
who lure or coerce students to attend extra training industry underlines geographical advantage, especially
will be dealt with seriously or even stripped of their in the (smaller) third and fourth tier cities, where many
teaching credentials. The institutions are forbidden from of the students still favor the small tutor centers close to
engaging in training activities beyond the teaching their home (SCMP).
356
demand for better living standards. Therein, heavy syllabus. The idea is to reduce the burden on primary and
schooling and extracurricular burdens on primary and secondary school students. The after-school institutions
secondary school students are specifically a reflection should also submit their course curricula, enrollment
of unbalanced and inadequate developments in the targets and class hours to local education authorities for
education sector (PDO). approval, the statement said. As Chinese parents often
spare no effort or expense to promote their children’s
In 2016, more than 137 million primary and education, a booming market has arisen for after-school
secondary school students attended extracurricular training, with all kinds of institutions established to give
classes, which had a combined market value of more children a head-start (Zou).
than 800 billion yuan (US$127 billion), according to
the Chinese Society of Education, which is overseen The MOE officialized the new regulations in 2018
by the Ministry of Education (MOE). A different study with Opinions of the General Office of the State Council
by the China National Children’s Center found that 48 on Regulating the Development of Off-Campus Training
percent of students attend after-school classes, and Institutions (The Opinions), marking the first time that the
more than half said they rarely have time to play with State Council had ever exercised its administrative power
friends. More than 90 percent of the 8,847 children to regulate the development of the after-school training
surveyed said most conversations they have with their market and that this move would play a pivotal role in
parents are about academic performance, while 14 keeping China’s school education from being disrupted,
percent said they had never spoken with their next- and more importantly, in protecting school children
door neighbors. Experts said that instead of blaming from burnout caused by extracurricular overload. To
parents and providers of extracurricular classes for the promote the long-term, orderly development of after-
situation, only a thorough overhaul of China’s exam- school training institutions, the Opinions set out specific
oriented education system would offer a real solution requirements in terms of establishment, approval
and reduce the burden on students. Extracurricular and registration, training practices, supervision and
classes are not cheap. They usually cost about 200 yuan management, interaction with school training, and
an hour. One-on-one “interest classes” such as learning organization and direction, as well minimum criteria for
piano or dancing can cost as much as 1,000 yuan per their venue facilities, trainer qualifications, and levels of
hour. Although there is heated debate about the effect management. As of August 2018, 382,000 after-school
of extracurricular classes, there is no doubt that their training agencies had been inspected, and 259,000 found
growing popularity is generating huge revenue for to be noncompliant (MOE Press).
providers. For example, in the first nine months of 2017,
the profits of TAL Education Group rose by almost 55 Because of the new regulations, China’s booming
percent year-on-year to about US$140 million. The rise after-school tutoring industry is ripe for further
came as the number of students attending TAL’s classes consolidation, with large players poised to gobble
surged to about 5 million, a rise of more than 86 percent up smaller rivals forced out by tougher government
from the same period in 2016 (Zou and Jiang). oversight and low profit margins. Big players most likely
to benefit are TAL Education Group, the world’s largest
The MOE announced that China will establish a private education company, and New Oriental Education
blacklist of unsafe or poorly operated after-school and Tech Group. Consolidation could result in better
training institutions for primary and secondary students quality teaching, as underperformers leave. However,
by the end of June 2019, as part of its oversight of the some students in smaller cities may be left behind as
rapidly expanding industry. The blacklist, which will some local centers shut their doors, although the big
be disclosed to the public, will name institutions that players are expanding their footprint with growing
have safety hazards, lack permits or have engaged in online offerings. But the government clampdown may
misconduct. Local education authorities will also publish also lead to some smaller players raising their game and
a list of training agencies that are devoid of problems. A becoming stronger, for example by capitalizing on their
statement released by the Ministry said that, teachers early edge in smaller cities. China’s segmented tutoring
who lure or coerce students to attend extra training industry underlines geographical advantage, especially
will be dealt with seriously or even stripped of their in the (smaller) third and fourth tier cities, where many
teaching credentials. The institutions are forbidden from of the students still favor the small tutor centers close to
engaging in training activities beyond the teaching their home (SCMP).
356
