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Major Education / Tech stocks has plummeted in China last month after the government announced tightened regulations towards off-campus tutoring and banning of for-profit education centres. Here’s the recap:
The Policy:
Private tuition centres that teach core school subjects must be non-profit. Tutoring companies cannot be publicly-traded or acquired. Foreign investment in this sector is restricted. Tutoring of school subjects is banned during weekends and vacations.
Why?
1. Curricular Burden & Education Anxiety
The Gaokao (like SPM or SAT) is the most stressful & competitive exam for Chinese students. Like many Asian societies, the Confucian philosophy of upward mobility through education plays a huge role for the emphasis of good Gaokao scores. Parents tend to send their children to tons of after-school tuition centres to improve their studies, becoming too much to handle. Hence, the ban of tutoring during weekends and school holidays will give kids a proper break. The ban does not apply to non-curricular classes (ie. music lessons, sports training, foreign language etc) allowing hobbies to be cultivated and let kids be kids.
2. Family Planning
Like many developed nations, China is becoming an ageing population. China has introduced the 3-Child Policy, but the cost of raising children is high due to the expenses of private tutoring which was a $120B industry. By making tuition free/non-profit, the education burden is significantly reduced.
3. Class Divide
Rich families can afford the best education, hence rich kids will score higher and have better prospects. This will create further societal gaps between the urban rich and rural poor. Adhering to their Socialism with Chinese Characteristic principles, China is hoping that the regulations will even the playing field, making education truly free to give everyone equal chances.
The changes are pretty drastic, especially for huge profiting education centres. But it’s a welcomed change for the wellbeing of the kids. It’s ironic that the word ‘school’ came from the Greek word ‘scholē’ which means leisure, yet it has made most kids around the world quite the opposite.
Time will tell if it works, but it’s a valiant attempt to reform their education culture, whereas Malaysia has been complacent with its rigid education structure for decades and at most proposes kids to do a TikTok challenge.
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