What’s Behind Beijing’s Crackdown on China’s Tutoring Industry?

What’s Behind Beijing’s Crackdown on China’s Tutoring Industry?
Students leaving a school after finishing the National College Entrance Examination (NCEE), known as Gaokao, in Wuhan, China, on June 9, 2021. (STR/AFP via Getty Images)
He Qinglian

On July 24, Chinese Communist Party (CCP) leader Xi Jinping banned for-profit tutoring on core school subjects. I believe that such a move is related to the CCP’s strategic plan for China’s future education. Since the Mao Zedong era, the CCP has been fully aware that education pertains to its future successors.

There are different views on the collective clampdown on the off-campus tutoring industry in China. Chinese state media claim that it was to reduce parents’ financial burden in order to encourage them to raise more children, which would help solve the population crisis. Netizens see it as a crackdown on private capital, a move to further indoctrinate CCP ideology when “Xi Jinping thought” is being added to the national curriculum.

I think the main reason for such a heavy-handed ban stems from the CCP’s strong will to take back control from an already booming private sector that is perceived as a strategic threat to China’s state-run education system under the one-Party rule. And it comes as some of these companies have been listed overseas. Since Mao, the CCP has never forgotten that education is a matter of the future and shaping its successors.

CCP’s Strategic Adjustments in Education

In China, the entire education system—from elementary schools to universities—has been and must be fully controlled by the CCP.

It appears that the following major factors have prompted the CCP to make strategic adjustments on education.

First, there has been a large number of unemployed college graduates since the CCP industrialized its higher education system in 1999.

Since September 1999, the regime has been in high gear to expand its higher education industry, allowing a majority of colleges and universities to significantly increase their enrollment by implementing a fee-based admission system.

In the first few years, it appeared to be a win-win situation for all. Colleges and universities, large and small, suddenly found a new source of massive funding that kept on growing. Faculty and staff enjoyed huge boosts in their salaries and benefits improved. The authorities were delighted as if a brand new industry had been identified to foster economic growth. Many applicants who would have been disqualified for college under the original scholarship-based elite education system now had access to college classrooms that were once closed to them.

However, in 2003 when Beijing welcomed its first group of college graduates, many of them had a difficult time getting a job, according to Chinese media.

In July 2003, the state-run China News Weekly published an article titled, “Unemployment After Graduation: Who Stole the College Students’ Jobs?” According to the report, the employment rate of college graduates in 2002 stood at 80 percent. In 2003, 1.06 million out of 2.12 million college graduates were “temporarily unemployed.”

There weren’t enough employment opportunities when a large number of college graduates suddenly flooded the job market. While many people in China are illiterate or semiliterate, the Chinese regime inadvertently created for itself another problem of having an excess number of graduates whose skills were misaligned with market demand. This phenomenon is not seen in other developing countries.

To address the problem, the CCP in 2005 announced a policy that would “vigorously develop vocational education”—the goal was to help align college graduates’ skill sets with the job market.

But since then, the regime has been too busy with political struggles and has not fully implemented the policy that could benefit millions of young graduates in the future. As a result, mass unemployment of second and third-tier college graduates continues to this day.

Chinese students leave after taking the national college entrance examination, also known as "gaokao," at a high school in Beijing on July 8, 2020. (Kevin Frayer/Getty Images)
Chinese students leave after taking the national college entrance examination, also known as "gaokao," at a high school in Beijing on July 8, 2020. (Kevin Frayer/Getty Images)

Second, the ongoing trade war with the United States, along with the reality of China’s failed education system, catches up with the CCP.

Since former President Donald Trump left the White House, Beijing has faced two new realities.

First, the CCP has realized the importance of elite education and cultivating talent. Three significant events contributed to this realization: 1) Western countries, most notably the United States, banned the use of Huawei equipment in their 5G networks; 2) the CCP needed to rely on other countries for chip supplies; 3) Beijing’s “Thousand Talents Program” has been called out by the international community for engaging in espionage and theft of intellectual property.

Second, there has been a disconnect between what the job market needs and what many college graduates are trained to do. In China, for example, foreign trade companies face difficulties finding technically qualified candidates to fill open positions and constantly encounter labor shortages at their assembly lines, while unemployed college and secondary technical school graduates are unwilling to take those laborious jobs.

In my opinion, solving such problems requires China to learn from the German “streaming system” of education, starting with high school, and cultivate talents through a mature vocational education system.

In Germany, students go to primary schools between ages 6 to 10, and then to lower secondary schools between ages 10 to 16. In lower secondary education, students are placed in streaming programs that are recommended by the students’ teachers, based on the students’ academics, personalities, and work habits, among other things. Such streaming programs continue into secondary education for students between 16 to 19 years old. The streaming system in Germany offers students an option of having either an academic or a vocational pathway for their higher secondary education, at age 15 or 16.
Similar dual-track programs have been discussed in China for many years, only to be found infeasible, because culturally, Chinese parents cannot accept that under such programs their children may only end up with high school diplomas.

Threat to the Regime

A recent article from Chinese news portal QQ, titled, “Behind the Central Authority’s Move: Shocking Data on Off-Campus Tutoring Industry,” reveals information that speaks volumes about why Beijing cracked down on the thriving industry.

For example, total sales for the off-campus tutoring market in China have reached more than $215 billion while the United States, the top education powerhouse, has only about $10 billion in this sector. In 2020, total sales of all training institutions for K–12 education in Japan had only $4.2 billion.

In 2020 alone, as much as $10 billion of venture capital poured into China’s tutoring sector, providing off-campus services on subjects such as math, language skills, and music at all K–12 levels.

According to the listing prospectus of New Oriental Education & Technology Group, the total revenue from the students who were enrolled for its K–12 tutoring programs nationwide increased from $31 million in 2015 to $50 million in 2019.

Furthermore, as reported by Hurun’s Global Education Rich List 2020, 7 of the top 10 education companies with the highest market value in the world are from China. Their businesses are focused on test prep, home tutoring, online education, language training, among other things.

The CCP would not allow its authority to be challenged. From its point of view, the remarkable expansion of China’s tutoring industry has become a threat not only to the state-run monopolistic education system, but also to the survival of the communist regime. Needless to say, Beijing would no longer allow private capital, especially foreign capital, to invest in this industry that has an enormous output value and a bearing on the foundation of the nation and the existence of the regime.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
He Qinglian is a prominent Chinese author and economist. Currently based in the United States, she authored “China’s Pitfalls,” which concerns corruption in China’s economic reform of the 1990s, and “The Fog of Censorship: Media Control in China,” which addresses the manipulation and restriction of the press. She regularly writes on contemporary Chinese social and economic issues.