China cracks down on lucrative tutoring industry to ease burden on families

in August 2nd, 2021

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In an effort to ease the burden on both parents and kids, China has banned a number of after-school education options. What started in the 1990s to help Chinese students improve their English for overseas education has grown into a booming industry where affluent families spend big money to help their children get ahead. In fact, the private tutoring institutions have been so successful that many are now publicly traded companies. Some founders have even become billionaires — though the crackdown has taken away this status as stocks immediately plunged in response.

What exactly is China banning?

  • First off, for-profit companies now face severe business limitations. They can no longer go public, raise capital from foreign investors, or poach school teachers with the incentive of higher paying salaries.
  • Tutoring sessions are also being restricted, both online and not. Sessions are now limited to 30 minutes a day and must end by 9 PM. Additionally, private tutoring is also banned on weekends and school breaks.
  • For-profit tutoring on official school subjects is also prohibited, such as math, English, and science. And anyone younger than six-years-old can no longer be offered these classes.

The other issue possibly motivating these changes is China's declining birth rate. Despite lifting the one-child policy to help the country’s ageing population, young households are unable to grow their families due to the financial burden that comes with maintaining their kids’ learning opportunities — one father shared how a single, hour-long tutoring session costs a tenth of his entire monthly earnings. Some worry the ban isn’t enough, though, claiming wealthy families who want their children to maintain a competitive edge will instead turn to black market solutions that will eventually emerge (and with even higher prices).

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