If you have been paying a little attention at the International scene, you will be aware that China “clamped down” on the for-profit school model that was working inside of China. By the singular ‘stroke of a pen”, many Chinese billionaires suddenly lost a ton-load of money. And the West (read: America and the UK) are all in Shock. “What are they thinking” they holler.
They don’t “get it”. They do not understand. They think that making billions of dollars in profits is a sign of success and vibrancy. But no. It is not.
Again, China is showing the world, that it’s primary role is to take care of it’s citizens first. And if a few billionaires are crushed in the process, then so be it.
China’s hammer blow to private education shows it will do whatever it takes to meet its goals
From HERE. Tom Fowdy 26Jul21.
In a spectacular display of government authority, China has, with the stroke of a pen, demolished its $120-billion private education industry by forcing it to reform into a non-profit initiative.
The move has cost at least one billionaire his fortune.
It follows a number of crackdowns waged by Beijing against various sectors of the economy which were deemed to contravene the national interest. The ruthlessness of such sudden decision-making has undoubtedly shocked Western observers and capitalist advocates, yet its purpose appears to be twofold.
As highlighted by Reuters, Beijing is dismantling a sector which is not only exacerbating the inequality of education among rich and poor, but is also increasingly perceived as an obstacle to the country’s fertility rates.
So now the hammer has come down on it as a social disruption. It shows that Beijing is prepared to do whatever it takes to meet its national goals, and is another example of how the Chinese Communist Party’s authority has stiffened against the creeping liberalization which the West once welcomed.
Education is of exceptional importance in east Asian societies, and is often considered a determining factor in a family’s status. Parents invest heavily in their children’s future, and as a result the systems in these countries often turn out to be extremely competitive, resulting in an intense commitment towards extra-curricular and out-of-school private study.
This has sparked the development of a huge private education and tutoring sector, with parents investing vast amounts of money to ensure that their children can be among the very best. It is admirable yet strenuous, and it inevitably has a knock-on effect on fertility rates, as each child effectively becomes a massive investment.
The example of neighboring South Korea, which is fully developed, illustrates how in a capitalist society, the zealous over-competitiveness of the education system is having negative effects on society. High-school-age children typically go to school, only to attend private ‘Hagwon’ classes afterwards, which often offer miserable working conditions for the teachers involved.
As a country that is developing fast, China has increasingly been heading in the same direction. Despite being a communist state, this has created a growing urban-rural divide, where the wealthy children of cities such as Shanghai are able to afford these educational boosters, but the poorer children of the provinces are left behind.
This is an obstacle for future growth.
Beijing also now sees this arrangement as dragging down its birth rate, which has become a national priority. A new white paper called for extensive reforms to enable people to be able to afford more children, including in education and healthcare.
As a result, Beijing has clamped down hard on this sector by instantaneously transforming it into a non-profit, sending shares plunging. The goal is not to end tutoring, but to make it more affordable and accessible to all, so the vices of inequality and capitalism cannot strangle society.
It’s a stark reminder that although China embraces market economics, it is nonetheless still a communist – state and under Xi Jinping, it is in many ways hardening its resolve to be so.
And this is, of course, precisely why the West does not like Xi.
The CPC chairman has reversed the trajectory of liberalisation in society, which Western observers once hoped would see China ‘evolve’ into a democracy. Instead, Xi has centralized and consolidated CPC rule.
His strategy is not so much tyranny, as has been caricatured, but based on an increasing belief that if China’s problems are to be overcome, the political will invested into it needs to more resolute.
The education saga helps explain why.
If the private education system was simply allowed to spiral out of control as a capitalist initiative – which is acceptable from a Western point of view – it would become an obstacle for the country’s other socio-economic goals and development.
Increasingly, we see this kind of ruthlessness shape Xi’s leadership of the country – such as at the start of the pandemic, when he imposed a lockdown in Wuhan, which was condemned by the West at the time, yet ultimately paid off.
Although the uncompromising nature of the Xi era has put China on a collision course with the West, it nonetheless may be what the country truly needs to move forward.
Many of his actions are arguably ‘necessary evils’ in the pursuit of a longer strategy, even if one believes they are morally troubling or even unacceptable.
The South Korean model of education is a warning sign of what can happen if an over-competitive educational culture is superseded by the demands of profit. Xi has just made sure this will not happen in China. It shows how the state is continuing to dominate Chinese society and drive forward its vision for the future, even if it means culling billionaires along that road.
Tutoring, healing, feeding humans, providing water and energy should be non profit. Why? Why should someone profit by providing basic services? Tell me why? Remark, non profit does not mean low wages nor free... it could mean efficient, fair, good and appreciated by customers, who would choose the best for them.
Well I agree with the Chinese President because he believes that every child should have equal opportunity at the educational level.
A poor family cannot afford expensive private tutoring maybe leaving the child from that poor family at a disadvantage when it comes to performance in exams, and the opportunity for a place at university.
This is the best way to produce the best talent and China as a country will benefit in the future because of this policy.
I have always believed that countries should provide free education based on ability especially in science, technology, maths and medicine. Let them pay for their airy fairy degrees themselves. This is exactly what farmers have done forever, cultivate for best yield.
A brilliant management move by China.
As it will stop a lot of inequalities, people will blend better with 0ne streamline education, much of one class people, unlike in many countries private schools with troublesome, violent separate races, of different castes. And private schools tend to stretch the boundaries with different courses, subjects and outlandish thinking---not good for a society.
So much better to have one good public system only- let China show the way. The benefits for all people are ENORMOUS. I bet more than half of the people in the world will applaud 'the one education system.'
The corrosive capitalist mindset will surely turn China into a failed state like the US. It is a relief to see China protect itself and its people from the cancer that will subvert China and lead to its fall.
Keeping an eye on the pro-West cabals inside China will protect it from suffering the same fate as the Soviet Union. Learn from History!
American and Western media are shocked!
And you can tell how they just don’t have a clue as to what is going on. Reading it, it sounds so “breathless”, “gasping”, “exasperated”, and “frustrated”. Read this article from HERE.
Jeeze! Get a fucking life woman.
I highlighted the “kill words and phrases“.
Can you possibly tell me that this wasn’t processed through AI to develop a thoroughly negative impression of China? And this is just one example of how Americans are manipulated to hate and demonize China.
Check it out. Learn something.
China is extending its regulatory storm from tech to education
Just as China’s regulatory storm against big tech came abruptly and brutally, Beijing’s deepening crackdown on private education companies is plunging the entire sector into an existential crisis.
China’s State Council and the Party’s central committee have jointly issued a set of rules (link in Chinese) aimed at curtailing the sprawling sector that has flourished thanks to massive funding from global investors and ever increasing spending from families fighting to help their children gain a better footing in life. After years of high growth, the size of the after-school tutoring sector has reached upwards of $100 billion, of which online tutoring services account for around $40 billion.
“The timing is also interesting as it coincides with the crackdown on the tech companies, and further confirms the intention of the government to regain control [of] and restructure the economy,” said Henry Gao, an associate professor of law at Singapore Management University, referring to Beijing’s sweeping regulatory overhaul of tech companies including Alibaba and Tencent, which have either been fined for monopolistic practices, ordered to give up their exclusive rights in certain sectors, or, in the case of Didi, have fallen afoul of national security rules.
China’s “double reduction” policy
The rules, released over the weekend, aim to ease homework and after-school study hours for students, which the policy dubbed the “double reduction.” They stipulate that companies teaching subjects covered in primary and middle school, which are compulsory in China, should register as “nonprofit institutions,” essentially banning them from making returns for investors. No new private tutoring firms can register, while online education platforms also need to seek new approval from regulators despite their previous credentials.
Meanwhile, companies are also banned from raising capital, going public, or allowing foreign investors to hold stakes in the firms, posing a major legal puzzle for funds like US firm Tiger Global and Singapore state fund Temasek that have invested billions in the sector. In a further blow to China’s ed-tech startups, the rules also say that the education department should push for free online tutoring services across the country.
The companies are also banned from teaching on public holidays or weekends.
Double-digit reductions in Chinese stocks
The looming rules, first reported by Bloomberg last Friday (July 23), immediately led to a sell-off last week in US-listed veteran education players such as New Oriental Education & Technology and TAL Education. In trading in Hong Kong today, where Oriental floated a secondary listing last year, shares of the company plunged 47% today. Meanwhile, Larry Chen, the former schoolteacher who founded Gaotu Techedu, a major online education player, fell out of the ranks of China’s billionaires.
Major education companies have been quick to say they will comply with the new government rules. New Oriental, the largest Chinese player in this space, said that the new regulations will “have material adverse impact” on after-school tutoring services, a sentiment echoed by TAL.
The regulatory developments also spurred a broader $2 billion selloff in Chinese stocks, as the bar on foreign investment for education firms coupled with the crackdown on foreign IPOs after ride-hailing giant Didi confirmed to foreign investors just how exposed their investments are from China’s regulatory actions. Social media and gaming Tencent was down 7.7% in Hong Kong today after China told it to unwind its monopoly on exclusive music licensing rights, while food delivery giant Meitu was down nearly 14% after Chinese regulators today ordered better protections for delivery workers.
Why is China cracking down on education?
While the harshness of the new measures is surprising, the fact that they were coming wasn’t. In March, president Xi Jinping called after-school tutoring services a “social problem,” and in May he again lashed out at the industry’s “disorderly development.” Following Xi’s criticism of the sector, authorities set up a dedicated department to supervise it, including examining tutor qualifications and fees, as well as imposing a ban on teaching preschoolers primary school materials.
In addition to Beijing’s desire to put the brakes on tech sectors that it believes expanded too chaotically, the turn to education indicates the government’s worries about China’s dropping birth rate. One of the major purposes of the new rules is to “effectively ease the anxieties of parents,” as well as reduce family spending on education, according to the government document. A major obstacle for Chinese citizens to have more than one child is the sheer cost of doing so, and in particular the difficulty of securing a quality education, which authorities promised to address in May, when introducing the third-child policy.
One Chinese teacher Quartz spoke to noted that it may be middle-class families who feel this policy the most, given they are most likely to push their kids into tutoring. Affluent families, after all, can still engage private tutors or send their children abroad to elite schools.
“The new rules will benefit those who are in the grassroots class that don’t have much time or energy to supervise children’s studies,” said the teacher. “But for people like us who are in the middle-class bracket, we will be hit the hardest.”
The next target of China’s infinite crackdown
The new rules are yet another razor-sharp warning to global investors that high returns from investment in China Inc can turn into huge losses overnight.
Yuanfudao, one of China’s largest online tutoring service startups, raised $2.2 billion in two funding rounds partly led by Tencent in October, pushing its valuation to over $15.5 billion. But now it is unclear what will happen to the stakes held by investment firms, especially foreign ones, after the new rules dashed hopes of cashing out through upcoming IPOs.
“This incident highlights the crucial importance for global investors to have people who understand China, who can decipher investment risks from minor nuances in mundane government documents…Any company that wish to operate in China should put China’s regulatory uncertainties as the biggest risk factor,” said Gao, the professor.
The education sector is not the only one that needs to worry about government scrutiny, however.
On Weibo, many commentators have pointed at the housing market, whose skyrocketing prices have been cited often by citizens as a major difficulty to having children, as the next target of crackdown. In an analysis, Chinese financial columnist Jin Lun argues that any industry that is seen as contributing to people delaying having children will be a potential target. “High housing prices will also be cracked down as an ‘enemy’ that has been weighing down the birth rate. While the industry will continue to exist to meet demand, there is basically no hope of continuing to see housing prices rise,” wrote Jin.
Conclusion
This little article combines two other articles. The first was one from RT written by a long time Chinese observer. He describes what is going on and why. China is trying to avoid the “death traps that has so violently polluted the West.
The second article is how the event is “reported” in the American “news”. In this case MSM. It’ reads like a breathless hysterical document, and when you highlight the “Kill Phrases and words” the enormous density of them is strongly suggestive of AI processing.
And as I have reported in the past, the “millions of dollars” to “control the anti-China” narrative funded by neocons is pretty relentless. This is just one such example. Can you possibly imagine what others might be?
Currently, Western Media is mostly inundated with lies about China since it's being demonized as the Enemy du Jour by the Outlaw US Empire and its vassals, so much of what's published is rubbish. ...Chinese media has much greater credibility. I'll close by saying this older publication detailing China's national plan for implementing the 2030 Agenda for Sustainable Development as promoted by the UN contains the underlying rationale for many of China's policies. Posted by: karlof1 | Jul 26 2021 20:32 utc
Meanwhile, in China, all is good.
I took some videos today. Enjoy. It’s a video (in five parts) of me walking out of my house, down the street, and getting a breakfast at Burger King. It’s everyday MM, but it will give you all a glimpse of what the “real” China is like.
Video One – Out the door
Video Two – Outside the Complex.
Video Three – Down the street.
Video Four – Burger King
Video Five – Past the quarantine zone.
Some thoughts…
I was in China teaching English in universities and to private students for much of the last fifteen years. I tried to go to a different province every year in an effort to understand China better. My subject was Oral English, and so my classes were entirely conversation. Some things I saw: 1) Chinese generally are intensely patriotic although they may disagree with certain aspects of Chinese systems. 2) Class leaders and local leaders are ELECTED. Higher level leaders are selected by committees. 3) Chinese fashion looks longingly Westward, imitating hip-hop and clothing and even playing some latest Western hits to attract people into stores. 4) China has 95% eliminated paper and coin currency. 5) Chinese somehow think Western faces are more beautiful. Nose and eye jobs are common. I tell them their features are considered beautiful in the West. They are unfazed. 6) A mask is commonly worn for issues like a big pimple, a cough, or heavy pollution. 7) People generally follow rules without a problem, except when they don't. Cheating happens. 8) China has large land masses of designated minority areas with nominal or actual autonomous government. The population in these areas is not large, however. 9) Many many of those pushing their children in after school programs are hoping their children can go study abroad, and even maybe move abroad eventually. 10) Chinese by and large don't know how high their standard of living is compared to other areas. The world ranking don't actually compare cost of living. With good public transportation, well-planned neighborhoods, cheap medical care and top notch education, I admire China. Posted by: HelenB | Jul 26 2021 23:19 utc | 63
China resembles the America that I grew up in.
Not the America of today, a land ruled by psychopaths, serviced by zombie-serfs and slaves, and decay all around.
This situation, where the stark difference is a “bitch slap” to the American government, the American leadership, and the American structure is too alarming. And the evil, corrupt leadership dos not like it one single bit.
America used to be a land with factories. Real. Honest to goodness factories. Places where things, parts were fabricated and made. Like this…
Today, America has precious few factories. Most of what constitutes as a factory (on the government listings) are best described as “design centers”, and “corporate headquarters”. The buildings look nice, and it’s all so shiny, new and clean. But, it’s a land of cubicles, and accountants. Of lawyers, and Human Resources. It’s staffed by finance and marketing types. Very few actual engineers or workers.
Anyways…
You have heard it all before. Haven’t you?
It just makes me want to get with a beloved pet, a cat and just hang out or snuggle.
Just some pictures of people snuggling with their cats…
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Two thoughts occurred to me about this story.
One is that if parents are hiring tutors for the same basic subjects their children are taking in school, that implies the schools are universally doing a poor job of teaching those subjects. I sense that isn’t true in China, though some children with learning disabilities might need extra help. (If it is true, why aren’t parents complaining about the lousy schools that force them to buy tutoring? That’s not happening.)
Say what you might about the former Soviet Union, universal primary and secondary education was rigorous and did not normally require parents to find tutors to make sure their kids really got it right. China’s system has to be as rigorous. It doesn’t have teachers’ unions fighting to reduce teachers’ work and dumb down the curriculum as happens here in the US.
Tutoring should be broadly unnecessary and superfluous in the subjects students normally take in that year of schooling. Other subjects, such as learning a foreign language not in the normal curriculum for that year, would be an exception.
The other thought is that one of the biggest problems in the US is for-profit education, but this is mostly at the post-secondary level (college or university). For-profit colleges are expensive and credits often do not transfer to more conventional unis. Employers usually do not recognize credentials from those places.
For-profit “education” that simply piles on more work in the subjects children already take in school looks to me like a similar ripoff. Why would China, or any other country, want to emulate that?
Maybe I’m missing something about the system that is being targeted for extinction in China, but I doubt that. Ending unnecessary for-profit education looks like a great move.
China’s educational system is excellent, but varies regionally. For instance, most foreign English teachers prefer to move to Shanghai, and get a much higher salary there, rather than some backwater nowhere town in West Bumfuck, China with an equivalent salary.
The problem is that all of China is so damn competitive.
The for-profit model takes advantage of this situation, and charges extraordinary and outrageous prices. Why? Because it can.
This latest rule treats education as a fundamental need of the Chinese society. Just like food, shelter, water, and reasonable transportation. No one can profit from it. No one can charge outrageous fees.
Up until this rule passed, a first grade education for my daughter in a “International school” was 65,000 RMB/month. That is $10,000 USD. Every month. Now, this rule makes the education rate comparable with everyone else. Which is going to be around 3,000 RMB/year. Or, a far more reasonable $500 USD / year.
So please excuse my ignorance, this is a sincere question. Whatever value these tutoring operations were providing before, accepting that the pricing was out of control, will these places still exist now? Going from say 10k/mo to 500/yr? Will they continue to be interested in providing these same services at that rate? If they aren’t, if there is still a demand for whatever these places do, what does the government have up its sleeve to satisfy that demand?
Like if the people in Lanzhou don’t feel like they can buy their way up to a Shanghai quality education, but they still want to, what are they going to do? Send their kids to Shanghai?
I was reading an article yesterday about the Russian government providing low cost housing loans, direct payments, even tea with the president to encourage more births in Russia. Seems like they are on a similar wavelength.
I have read a ‘conspiracy theory’ that the global population is actually much lower than advertised already. I wonder if you have ever heard that?
Honestly, I am teaching my children to be bosses, not “treasured workers” in a big company.
My experiences in corporate America has been terrible. They learn to do their best. They study hard, but understand the subject matter. And their course selection is geared towards independence, business, and collaboration. I know that this is an odd thing to do, however our parents generation has passed. No longer can you get your first job and retire with a pension at 45. Today, you work until you die. I do not want that for my children. And I am not under any illusions as to what constitutes “success”.
I love the article – but love the cats more! I am laughing thinking about how my baby would react to a cat that big. My cat literally curls up on my face and sleeps while I am sleeping. The thought one of those kitty’s doing it would be paradise!
Yeah. I understand. My cat Texie used to do that. He was a great little guy.
Well, I too like big cats, but I’ve had cute little guys too. If there was a cat that I might be afraid of, it might be this guy…
Since I passed my teenage rite of passage being schooled in Hong Kong, I could relate to the ground reality towards education in most Asian communities (all very similar). Parents are anxious of their kids getting the most from schools. I think part of the reason is because Asian societies place a lot of emphasis on qualification as a first step to a better life. I believe another factor not to be ignored is sheer amount of people in most places. Population pressure also demands a lot from each individual to be competitive to stay afloat. That pressure coupled with the expectation from society creates enormous motive for families to push their children to study. I am in my fifties now. On reflecting back on my life, I am glad that I have had good opportunities to have received a solid foundation but I also like to point out this pressure, though it has positive aspects, also brings a lot of mental anguish to a lot of youngsters. The worst part is that a lot of folks do not really grasp the real meaning to be educated – that gives an ability to be a thinking person for themselves. I went through some of these after-school tutoring service myself. Sometimes the way they taught by reviewing questions from past exams. In a way, they try hard to train you to tackle exams not necessarily helping you in the basic subject matter. That is what the students consider a type of bonus beyond their normal classes.
A lot of people go through this process before stepping onto their adult stage. There is a lot of rote learning, but not a lot of room for imagination and encouragement to be creative.
Personally I applaud that the party stops all kind of weekend and after-hour tutoring. To me, they are a perverse pursuit of nothingness, wasting entertaining hours (who says entertainment has no value – it certainly helps us relax and recuperate) and marring the only available time to be with families and friends.
These leaders see clearly that there is a real problem when people are taking things to extreme while others profit from this perversity. It gotta stop!
Yes it is a potential social problem. Knowing the rules and guidelines are not enough to be a successful society, you also need imagination and creativity to open new doors to the future. We need not only people who are best in accuracy but also brave to trailblaze unconventional paths for all to follow. Merely pushing students to excel in exams and study and spending extra hours in analysing past exam questions may not be a good way to tap into niche potential of creative group. Worse, they may even be weeded out right at the initial stage and the society ends up with lots of hardcore individuals who best the exams, retain a good reflex on rules and guidelines but when it comes to making breakthroughs they perhaps may not be the answer the society needs.
I am not saying that it is all bad but nothing should be done in excess. Balance is in order. The leaders probably have realized this sort of craze may not at all be healthy for the nation as a whole and they need to step on the brake.
Profits are not supreme. Societies should not put that as number one goal. Extreme capitalism is certainly harmful to humanity, IMHO.
The quote of the day goes to you, Sir!
Why do I have a feeling that the government interjecting itself into private enterprise is loaded with unintended consequences? While I do enjoy reading about China, there resides within most of these articles propaganda elements. China is not devoid of internal problem – nor is any other country. I understand why but history has shown how command and control economies ultimately fail as innovation is stifled. Yes China is on a roll and to some extent “good on them” but they are one famine short of the whole thing unraveling. IMHO.
Not true. But I appreciate you sentiments.