The bad news continues for China’s private education sector as more and more companies announce closure.
The spate of closures has come following a new law, which effectively bans for-profit out-of-school-hours tutoring for core subjects to kindergarten, primary and middle school students. The laws are a hammer blow to a sector still trying to recover from the COVID-19 pandemic.
The government says the new laws are to reduce the academic burden on students and to curtail the control of capital over the education sector.
Private education is a multi-billion dollar industry in China. After news of the new rules was leaked in June, stocks of many of the biggest companies fell drastically.
The latest institution to announce closure is Juren Education, a private tutoring company for young people aged 5-18 years old, which was first established in 1994.
The announcement was made on August 31 via the company’s WeChat account, citing “operational difficulties.”
The closure will affect around 13,000 families who have paid for courses, as well as hundreds of staff, according to Sixth Tone.
That’s learned that Best Learning English also recently announced closure. The company operated English training schools in Beijing, Shanghai and Shenzhen, as well as a number of franchise schools in other cities.
One of Best Learning’s employees, who asked to remain anonymous, spoke to That’s about the closure.
The employee said that the company had already struggled, having been unable to open at the height of the COVID-19 pandemic.
When the new rules were introduced, the company attempted to adapt by rebranding the training centers as ‘Thinking Labs.’
An article published on Sina Education explained that the curriculum of these schools included culture, art and science, among other things, in an attempt to sell classes that would make students into well-rounded individuals.
One of Best Learning Education's Thinking Labs. Image via Alistair Baker-Brian/That's
However, the experiment (no pun intended) was short-lived. When we visited one of the Thinking Lab locations in Beijing’s Wangjing area, the front door to the school was already locked and had a notice informing customers of refunds.
In another more dramatic case, the chief executive of British private tutoring and educational consulting company Holland Park reportedly left Shanghai for the UK with RMB10 million (USD1.5 million). Yicai.com reported that Jake Hall fled having announced the company had gone bust.
A letter to employees from Hall stated that investors withdrew commitment to Holland Park following the new regulations in China.
Holland Park’s website still features the address of their Shanghai office. However, under the locations tab, only London and Dubai are displayed.
Adult training centers have not been immune from the latest wave of closures. On August 12, it was reported that Wall Street English, a long-term stalwart of the adult English education market in China, would file for bankruptcy.
The company was not affected directly by the new rules. However, yicai.com suggested that the collapse was partly to do with a lack of confidence in the industry from investors.
In order to survive, training centers for younger students will have to change their curriculum to avoid any teaching of core subject material. How this plan will be implemented remains to be seen.
[Cover image via Pixabay]