Summary

China’s State Council has recently issued revised Implementation Regulations for the Promotion Law on Private Education, which will come into effect from 1^st September 2021. Revisions compared to previous versions of the regulations clarify more details in terms of institutions’ establishment, operation and management, teaching staff and students, supervision and support, as well as legal responsibility.

• Institution set up

The new regulations state that at compulsory education level, public schools are not permitted to participate in any organization of private schools, nor be converted to private schools. Foreign-invested enterprises, as well as social organizations with foreign controllers, are also banned from running private schools at the compulsory education level. Local government shall not organize or participate in running private schools at compulsory level with education resources from state enterprise and public education sector. Meanwhile, the regulations encourage public schools that implement vocational education to import capital and technology to run for-profit private institutions. The regulations also point out that any social organizations or individuals shall not been in charge of private schools at compulsory level nor non-profit private schools at pre-school level through merger and acquisition or variable interest entities format.

• Operation and management

As a response to the social and technology development, online education has been recognized as a teaching approach in the private education sector. The regulations stipulated that private institutions that implement online education need to apply for a license beforehand. According to the regulations, all board members and any member of a decision-making body from a private school at compulsory education level must have Chinese nationality. Institutions at the compulsory education level are not permitted to use foreign teaching materials.

• Supervision and support

Local governments are required to establish a joint conference system, engaging different stakeholders to develop a regular supervision mechanism. The regulations also added a new point that government encourages the public to establish foundations or special fund to support the private education sector.

• Legal responsibility

The new regulations have listed more details regarding unlawful acts and corresponding responsibilities and penalty. Practices such as connected transactions, interest infringement of teachers and students might lead to permanent career prohibition in the private education sector.

Background

By 2020, there are about 180,000 private education institutions nationwide, accounting for more than a third of the total number of education institutions at all levels, with 55.64 million enrolled students who make up one-fifth of the national total number. Although these figures are heavily skewed by the large number of private pre-schools, China also has a significant number of private institutions at the school and university level, making up around 8 per cent of institutions and 13 per cent of students.

Analysis

The new regulations have put more restrictions on foreign stakeholders’ practices in China, especially at the compulsory education level. However, there is still a high level of demand for private education, including international-curriculum education at the high school (post-compulsory) level. There may also be opportunities in the vocational education sector, where the government particularly encourages private investment.

Source:

1. Previous regulations:

http://www.moe.gov.cn/s78/A02/zfs__left/s5911/moe_620/tnull_3183.html

2. Revised regulations:

http://www.moe.gov.cn/jyb_xxgk/moe_1777/moe_1778/202105/t20210514_531598.html

3. China issues revised regulations for private education sector - Chinadaily.com.cn