Development of Private Education Industry in China 2015

Article

Development of Private Education Industry in China 2015

Open & Integration

The year 2014 was a very important year for Chinese private education market. Various private education institutions went public respectively. Many commercial organizations including internet giants crossed industry boundary and entered education field. The scale of vocational education industry took a round of changes. Growing number of Chinese abroad students not only brought huge market interests for abroad education agencies but advanced the transition of abroad study service agencies mode. 

In recent years, the reform of education laws and regulations has gradually fuelled the boom of capital market. However, educational reform at national level continues to move on. Premier Li Keqiang presided, over the executive meeting of the State Council On January 7, 2015, discussed and approved a draft amendment to education laws, approved a draft amendment to package modification of education law, higher education law, and private education promotion law, and decided to submit them to Standing Committee of NPC for deliberation. It is clarified in the draft that "private schools will be subjected to classified management and profitable private schools are allowed to be established". This will greatly promote the robust development of private education market.

Under the backdrop of favourable policies towards education industry, a sunrise industry, an increasing number of commercial organizations choose to cross the boundary and enter this field. There are not only platform-oriented cross-industry cases with Internet giants as major players, but also integration-oriented cases with a purpose of strengthening industrial chain extension. The emergence of cross-industry cases means that more capital will enter into education industry, thereby objectively accelerating industry integration and development. However, considering characteristics of education industry, enterprises that cross industry boundary are required to be more cautious and gain a better understanding of education in order to carry out successful integration.

Jointly driven by national policies, employment market, industrial upgrading and development of information technology, the scale of vocational education industry will be further expanded, thereby gaining advantage of industrialization. The combination of "online + offline" mode will become the major development trend for vocational training institutions. With a shortage of senior technical talents resulted from China's industrial upgrading and continuous development of emerging industries such as information technology, finance and accounting, and bio-medicine, there will be more startups in segments of mid- and high-end customized and interactive vocational training.

Meanwhile, China's economy growth has stimulated the increase of Chinese abroad students, thereby bringing huge profits for overseas education agencies and destination countries. However, with changes in requirement on characteristics and background of abroad students as well as technological innovations, the ecological environment of abroad education industry is experiencing tremendous transformation. From the perspective of abroad study service agencies, the current mode has failed to satisfy the need brought about by rapid market changes. With the industry facing a turning point, integrated development and a combination of online and offline mode will be the general direction of future development. With regard to education agencies, in spite of robust market demand for international education, international classes of various high schools will experience transition under the context of gradually tightening policies. At the same time, while Chinese-foreign cooperative education programs and institutions in various forms have been constantly launched, those which are excessively profit-driven and of poor quality will face stricter regulation.

 

(Simplified Chinese version only)
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