Fri. Dec 3rd, 2021

“I just dropped my son off at the debate class,” says Colin, a Shanghai-based entrepreneur. He calls from his car on a Sunday afternoon, the sound of the city’s busy streets being transported across the crackling telephone line. Colin, who asked not to be identified by his real name, is stuck in traffic, one of the millions of parents in China transporting children between a march of mind-boggling and physically challenging weekend activities.

After completing class at a prestigious Shanghai private international day school, his 14-year-old son is thrown into a weekly routine of online Spanish tuition, debate training and soccer competitions. Colin wants to give his son a chance to gain access to a top-level Ivy League university in the USA.

The annual prize label for all this schooling? $ 100,000 a rise.

But in July, Beijing sent a scrap ball through the $ 100 billion-a-year tutoring industry when it banned lucrative tutoring services for core curriculum subjects, part of a policy aimed at reducing childcare costs to help promote China’s low birth rate. “The sudden change brought anxiety to parents, who were used to arranging a lot of extracurricular activities because of the competitive school system,” says Yu Yali, a Shanghai-based career consultant and mother.

Since the move, parents have been looking for new ways to give their children a head start in the murderous university entrance exams. Instead of signing up for foreign language classes, which are banned by the regulations, parents prefer non-core curriculum subjects such as art, which are taught in English, says Ekaterina Kologrivaya, co-founder of Edtech Expand, a Beijing-based consulting start-up.

Many of the major education companies have closed their physical classrooms and transferred online to save costs. But Beijing has banned local firms from hiring overseas tutors, which has increased demand for the exhausted number of foreign teachers in China, who have been unable to enter the country due to strict border controls. This has pushed up the prices of classes offered by foreigners, including debate classes, another smart way for students to master valued English skills while sticking to the new rules.

Parents at the debate school attended by Colin’s son pay up to RMB17 800 ($ 2,784) for one semester’s weekend debate sessions. “The price has gone up by 50 percent from last year,” says Colin. “Even for me, the price was surprising, and I am richer than most. Fortunately, I can afford it. ”

New Oriental offers after-school and summer camp classes for Chinese schoolchildren © Bloomberg

Meanwhile, tutoring companies and cram schools either crashed or went through a quick recovery. New Oriental, listed in New York, which, before the regulations went into effect, enrolled more than 5 million children for after-school courses, is finding new profitability lines. These include “new concept camping” holiday courses where children stay on university campuses with classes during the day. The company’s share is 90 percent below its peak in February.

“Chinese parents still want the best education for their children,” says one foreign investor with a Shanghai-based investment fund focused on consumer companies. “The market will find a way around constraints when there is a strong demand and willing supply for a certain product or service,” he says.

There are some parents who agree with the government’s goal of reducing the students’ burden. “Kids, like my five-year-old son, have less homework and tests, so have time to cultivate hobbies and become independent,” says Yu. But others are turning to the burgeoning underground market for ex-tutors posing as “high-end housekeepers” to ensure personalized education for their children.

Zhipin and Liepin, two local recruitment sites, are littered with advertisements placed by parents looking for domestic staff with bachelor’s degrees and foreign language skills that will help “look after their children” – without the need for homework skills. One post on Zhipin says: “A family with two children, aged six and 13, is looking for a caregiver who graduated from a well-known university, who is not too old but also has experience as a resident tutor to work. Monthly salary RMB24,000-25,000 ($ 3,758 to $ 3,915).

However, parents should tread carefully when arranging extracurricular activities. The Ministry of Education has promised to crack down on families who circumvent the rules and encourages the public to report neighbors who are seen inviting tutors into their homes. Now, as the tutor industry comes out of Beijing’s ban with watered-down curricula and weaker cash flow projections, money-laden Chinese parents are worried that private schools will face a regulatory attack in the government’s campaign to promote “common prosperity” effected.

In May, the central government stopped approving licenses for new private schools for the compulsory years of education after announcing a target to reduce the percentage of children attending such schools from more than 10 percent to less than 5 percent by the end of to reduce next year. year. Some provincial authorities have since moved to bring bilingual private schools – which adhere to foreign curricula but still cater for local students – closer to the strictly regulated public school system.

“Chinese applications at British and American residences are taking off,” says Colin, driven in part by uncertainty about the direction of the regulations on private private schools.

These schools worked largely outside the competence of local education authorities, appointed foreign teachers and complied with curricula drawn up by overseas examination boards. But authorities are putting pressure on schools, including in Shanghai, where they have been forced to use the same textbooks as public schools when teaching Chinese literature, politics, history and geography.

Emma Vanbergen, co-founder and president of BE Education, an educational consulting firm that advises Chinese families on overseas studies, says interest in British boarding schools is growing after declining during the pandemic. “It is difficult for the students who went this September. Most will spend an entire academic year without seeing their parents when they leave due to the two-week hotel guarantee entering China, ”says Vanbergen, referring to the personal disruption involved.

Colin reflects on the next step for his son’s education. He says he donated “a ton of money to a high school in the US” as a backup option if his son decides to leave the Chinese system before going to university. “But who knows when we will be able to see him when he leaves? The regulations make it very difficult to plan for our child’s future. ”

This article is part of FT Wealth, a division that provides in-depth coverage of philanthropy, entrepreneurs, family offices, as well as alternatives and impact investing

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