China Cracks Down on Tutoring Businesses

Last week, China’s central government introduced strict new regulations to reduce the pressures on school children and limit the operations of Chinese tutoring businesses. The new regulations forbid the scheduling of tutoring classes at weekends and public holidays, limit online classes to 30 minutes per session and ban public advertising of academic tutoring services. China’s crack down on tutoring businesses is also impacting the structure of these companies.

Tutoring businesses are now required to register as non-profit organizations. They will no longer be allowed to raise capital in stock markets, become public limited companies or accept overseas investment. Tutoring companies which find themselves in violation of the new regulations are required to take steps to rectify the situation, or face hefty fines.

Tutoring Schools in China

In China, academic success hinges on the The National College Entrance Examination, know as the GaoKao (高考), which students take at the end of secondary school. GaoKao exam results determine which courses and which universities these students will be accepted to. The pressure to succeed in this examinations is so great that parents begin preparing their children for these assessments from an early age. 

Throughout primary and secondary school, millions of Chinese parents spend thousands of dollars with private tutoring organisations to ensure their children remain competitive. Many of these businesses prey on the parents’ insecurities, and encourage parents to sign their children up for hours of study in the evenings and on weekends. 

The pressure on students is detrimental to their development and well being. Clearly China’s “after school education system is broken and needs fixing”. An article posted on the Chinese Ministry of Education’s website argued that the education industry has been “severely hijacked by capital” and that these businesses, ‘broke the nature of education as welfare.”

As such these new measures are aimed at reducing stress and rebalancing childhood so that children can grow up as more rounded individuals. For years, the private tutoring sector has negatively impacted parents and children, financially and psychologically. Policy makers also hope that these changes will lower the costs (and anxieties) of child rearing, and ultimately help raise the country’s birthrate which is considered to be citicially low at present. 

Fines for Tutoring Companies Breaking Regulation

China’s billion dollar tutoring sector has been under close scrutiny from Bejijng recently. Earlier this year, unannounced inspections at well known tutoring institutions were carried out by government officials. During these inspections 13 tutoring business were found to be in violation of regulations including; misleading advertising, pricing fraud and unfair competition practices. Each of these companies was fined over US$1.5 million. Among the companies found breaking those regulations were international firms including OneSmart International Education and Wall Street English.

Wall Street English Tutoring School Files For Bankruptcy 

Those fines, and the strict new regulations have prompted Wall street English, to file for bankruptcy.

Wall Street English was founded in Italy in 1972. It entered the Chinese market in 2000 and has opened 71 learning centers in 11 Chinese cities, hiring over 3,000 staff in its peak time. But now, less than 30 schools are still running, with around 1,000 employees left. 

Analysts believe that the closure of this large tutoring company will be the first of many organizations hit by the new regulations on student tutoring in China.

Foreign Teaching Positions in China Under Threat

The closure of tutoring schools and the effective banning of after school study will also affect foreign English teachers working in China, of whom there are over 200,000. Most of these foreigners were enticed to China during the country’s international education boom which created unprecedented demand for English language teachers at government schools, private schools, language centres and international schools.

Before the new recent regulations, China’s educational authority had also tightened up the qualification of foreign teachers since 2019, when Chinese authorities have initiated an aggressive crackdown on Western teachers living and working in China. In July this year, a group of sixteen teachers and students from Education First, one of the China’s largest ESL schools, were arrested on drug charges in the Jiangsu city of Xuzhou. Their arrests came after on-the-spot urine tests tested positive for illegal substances. 

Online Tutor Schools

Due to school closures resulting from the covid pandemic, there has been a huge growth in Chinese students studying online with foreign teachers. The majority of these teachers live outside of China, often in North America, Europe or the Philippines. There have been concerns over the qualification of foreign-based tutors, with reports that many teachers have no previous experience in teaching and no qualifications in childhood education.

The teachers from these online tutor schools will also be impacted by the regulation changes which specify that students cannot study online for over 30 minutes. 51Talk, an online education platform which employs over 20,000 Filipino teachers and VIPKID which employs more than 70,000 tutors in North America, will both be watching developments closely. If Chinese authorities strictly enforce these regulations with online tutoring schools, these businesses may need to quickly downsize.

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