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China to Unveil Stringent New Rules for Private Tutoring Sector

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China to Unveil Stringent New Rules for Private Tutoring Sector
© Reuters. FILE PHOTO: Children leave a school in the Shekou area of ​​Shenzhen, Guangdong province, China, April 20, 2021. REUTERS / David Kirton / File Photo

By Julie Zhu

HONG KONG (Reuters) – China is prepared to unveil a much tougher-than-anticipated crackdown on the country’s $ 120 billion private tutoring industry, four sources told Reuters, including bans on testing of the vacation tutoring and advertising restrictions.

The new rules, which aim to ease pressure on school-age children and increase the country’s birth rate by lowering the costs of family living, could be announced next week and take effect next month, two of the women said. people with knowledge of the plans.

The imposition of a trial ban on online and offline tutoring during summer and winter holidays in Beijing, Shanghai and other major cities, cited by sources, goes far beyond planned measures first reported by Reuters last month.

“The new rules would be stricter than expected,” said one of the sources, a person close to the regulators who write the new rules. “The industry should prepare for the worst.”

The trial vacation ban, in addition to plans to ban online and offline tutoring on weekends during the school term, could deprive tutoring companies of up to 70-80% of their annual revenue. said two of the sources.

The changes being drafted by the Ministry of Education and other authorities point to the cutthroat market for tutoring for students in kindergarten through 12th grade, or K-12 students, an industry that has grown rapidly in recent years. .

More than 75% of K-12 students, roughly 6 to 18 years old, in China attended after-school tutoring classes in 2016, according to the most recent figures from the Chinese Society for Education, and anecdotal evidence suggests that the percentage has increased.

The planned crackdown on the industry, which Reuters reported last month had already forced at least one major company that provides tutoring services to suspend a billion-dollar fundraising round, is being driven from above, three of them said. the sources.

President Xi Jinping said last week that schools should be responsible for student learning, rather than tutoring companies.

“Education departments are correcting this phenomenon,” Xinhua quoted Xi as saying.

The Information Office of the State Council and the Ministry of Education did not respond to requests for comment.

The ban on holidays and weekend tutoring would be implemented in nine municipalities and provinces, including Beijing, Shanghai and Jiangsu, for twelve months before being rolled out across the country, one of the sources said.

“While the rules will be adopted on a trial basis, you would be surprised if other areas don’t follow suit and even release stricter regulations to be politically correct,” the source said.

The Monday through Friday tutoring, which currently runs until 8-9 p.m., would be restricted in the testing areas, two of the sources said.

“Excessive” online and offline advertising, particularly in mainstream media and public places, will be banned, two of the sources said, adding that tuition fees will be strictly controlled.

The four sources declined to be identified because they were not authorized to speak to the media.

The New York-listed shares of Chinese private tutoring companies TAL Education Group (NYSE :), New Oriental Education & Technology Group and Gaotu Techedu Inc fell 12.3%, 17% and 12.5% ​​respectively. on Wednesday.

‘BABY CHICKEN’

As incomes rise in China, wealthy families are eager to see children succeed in an increasingly competitive society.

The competition is so fierce that it has spawned a popular term in parenting circles. Jiwa, or “baby chicken,” refers to anxious parents who energize their children with “chicken blood” by loading them with extracurricular classes.

In addition to protecting stressed out students, Beijing sees the changes as a financial incentive for couples to have more children as it seeks to shore up a rapidly declining birth rate, the sources said.

The cost of raising a child in urban China, and education accounts for a large part of that, has put off many future parents.

China’s population grew over the 10 years to 2020 at the slowest rate in decades, the country’s latest census showed last month, raising fears that its dwindling workforce may not be able to support an increasingly elderly population.

($ 1 = 6.4053)

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