Sources say that the prestigious British school DCI is currently negotiating to sell its Asian business, including its nine branches in China, with the largest proportion. With China's official crackdown on the education and training industry, tightening curriculum regulations, and economic slowdown, dozens of international and private schools are facing closure or consolidation, causing turmoil in China's $570 billion education industry.
During the Mao Zedong era, primary and secondary education in China was mostly official education. After the reform, private and international capital gradually entered, and a large number of private schools developed in large and medium-sized cities.
However, the COVID-19 pandemic has become a turning point. On the one hand, a large number of foreigners in China have left China, and geopolitical influences have affected the entry of citizens from various countries into China, resulting in a sharp decrease in the number of students. On the other hand, China launched the "double reduction" policy in 2021, which severely hit the off campus education and training industry, and has since fallen into a predicament.
Julian Fisher, the general manager of Venture Education, a market intelligence consulting firm based in Beijing, said that the three-year isolation of the epidemic and the slowdown in China's economic growth have further exacerbated the challenges.
&Quot; Cynics would say that this industry is coming to an end, while the average Chinese investor would only think that it is going through a painful stage of growth; Fisher said.
Dewei International School has been operating in the Chinese market for 18 years, including bilingual schools for Chinese citizens, which have been most affected by regulatory changes. In addition to China, Dewei also has schools in Singapore and South Korea.
EiM International Education Group, which operates Dewei, told Reuters that they are "introducing new strategic financial partners" and allowing partners to exit. This is a planned refinancing process that is "unrelated to any regulatory changes in the market".
However, according to the 2022 annual report of Dewey International School, "due to changes in government regulations," its development plan in China has been reduced.
In addition to the challenges faced by Dewey, the long-standing top private schools in the UK, Harrow School and Westminster School, withdrew from the Chinese market in 2021.
According to data from the British Council, there were approximately 180000 private educational institutions in China in 2020, accounting for more than one-third of all educational institutions in China, with a student population of 55.6 million. However, in the past two years, many schools, from kindergarten to middle school, have closed or stagnated.
The Communist Party of China has emphasized restrictions on private education and official ideology in recent years
In addition to the dual reduction policy, China also introduced a new regulation on the management of private education in 2021 to strengthen the role of the Communist Party of China in social management in China. The first article stipulates that private schools should "adhere to the leadership of the CPC".
Observers told VOA in 2021 that this is the beginning of Beijing's efforts to rectify and strengthen control over private capital in fields such as technology and education.
Just last month, China introduced the "Patriotic Education Law of the People's Republic of China", which will be implemented from New Year's Day 2024. The purpose of this law is to provide for the inheritance and promotion of patriotic spirit to young people and children in the form of laws, and to achieve the Party's educational control "starting from children".
Frank Feng, Vice Principal of Shanghai Lexton School, said, "For private primary and secondary schools, regulation is stricter. Due to stricter controls, some schools find it difficult to obtain a school license
There are also international schools thinking about transformation. Beijing Shunyi International School believes that the number of students from the "the Belt and Road" countries will gradually increase, and the school is upgrading its facilities, including setting up multi faith prayer places.
Jimmy Chin, director of China Acquisition Fund Hengsong Capital, said that many private education companies in China, including bilingual and international school operators, have been considering selling their assets in China, and "there may be more sellers than buyers at present.
(This article references a report from Reuters)