The Chinese government’s sudden crackdown on after-school education companies is raising costs for many parents and throwing millions of jobs into uncertainty, APA reports citing CNBC.
In a country where parents prize a good education — and good grades play an outsized role in determining career opportunities — tens of millions of students across China drown in after-school tutoring courses every year.
But this summer will be the last one for educational institutions to legally sell such tutoring programs.
Since the central government officially released the so-called double reduction policy last month, local authorities in several provinces, such as Shanxi and Hunan, have ordered private businesses to suspend online and offline tutoring classes for children from kindergarten to 9th grade.
The policy states that one of its major goals is to ease the burden and anxiety for Chinese parents wanting to give their children a good education.
The guidelines focus on the nine years of compulsory education before high school — from elementary to middle school, and call for academic tutoring businesses to restructure as non-profits.
The policy also prohibits those businesses from offering classes on weekends, holidays, summer and winter breaks — effectively only allowing tutoring on weekdays with a limited number of hours.
The scale of the crackdown is “far beyond expectations,” said Alan Wang, an analyst covering education at Beijing-based asset manager Harvest Fund Management.
The industry was preparing for some regulations, but it didn’t expect an order for restructuring that included a ban on public listings, making the sector basically “not investable,” he said in Mandarin, according to a CNBC translation.
Some parents will still pay up for tutoring courses they can find, sending costs higher, he added.
CNBC interviews across the education industry reveal that the new regulations shocked parents and left businesses struggling, as millions of employees braced for job losses.