Education

Managed under the Ministry of Education, all Chinese citizens are required to attend a minimum of nine years of compulsory education.  Middle school students compete for positions in top high schools, and high schoolers in turn vie for entry to China’s best universities. College admissions are largely determined by performance on a single exam, the notoriously difficult gaokao. Over the past few decades, the critical importance of this test led to the proliferation of private after-school tutoring firms that catered directly to the exam. But the landscape of the entire education industry changed drastically after reforms in late 2021 severely restricted the role of private firms in K-12 education.

As part of these reforms, China has moved to lower the number of privately run K-9 schools, in many cases nationalizing them and making them tuition-free. The new regulations also severely restrict the role of after-school tutoring and online education companies, which have shifted their business models away from K-12 education since the reforms were promulgated. Such firms now focus on career training, smart education hardware, and an amorphous concept referred to as “holistic youth education” (素质教育) — a curriculum designed to avoid regulated subjects, often including art classes or computer programming. The COVID-19 pandemic accelerated the demand for and adoption of new kinds of education tech, including the use of AI in content delivery, virtual and augmented reality, and improved online infrastructure to facilitate communication between teachers, students and parents.

Chinese policymakers see the country’s educational system as a key part of their efforts to boost China’s human capital and transition from a middle- to an upper-income country. The 14th Five-Year Plan includes a section on constructing a high-quality education system, with directives to improve vocational and technical education, bring university enrollment rates up to 60%, revitalize the educational institutions in China’s less-developed central and western regions, and construct training bases to integrate production and education in the semiconductor, AI, and energy storage spaces. While these policies demonstrate a commitment to developing the educational system, the government has also clearly signaled an overall tendency to restrict private activity and foreign influence in the sector, creating uncertainties for foreign actors hoping to invest in China’s educational institutions.