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Home / World / China to register after-school tutoring institutions as non-profit organisations

China to register after-school tutoring institutions as non-profit organisations

The country’s for-profit education sector has been under scrutiny as part of Beijing’s push to ease pressure on school children
China’s State Council did not immediately respond to a request for comment.
China’s State Council did not immediately respond to a request for comment.
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Reuters   |   Shanghai   |   Published 24.07.21, 01:09 AM

China will bar for-profit after-school tutoring in core school subjects in a harsher-than-expected crackdown on its vast private education sector, according to a government document widely circulated on Friday and verified by sources.

News of the policy change, which also restricts foreign investment in the sector, threatens to decimate China’s $120 billion private tutoring industry and triggered a heavy selloff in shares of tutoring firms including New Oriental Education & Technology Group and Koolearn Technology Holding Ltd.

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All institutions offering tutoring on the school curriculum will be registered as non-profit organisations, and no new licences will be granted, according to the document, which says it was distributed by China’s State Council, or cabinet, to local governments and is dated July 19.

China’s State Council did not immediately respond to a request for comment.

Curriculum-based tutoring institutions would be barred from raising money through listings or other capital-related activities, while listed companies would be banned from investing in such institutions, according to the document.

China’s for-profit education sector has been under scrutiny as part of Beijing’s push to ease pressure on school children.

Three sources told Reuters last month that the crackdown is being driven from the top, and in June the official Xinhua news agency quoted President Xi Jinping as saying that schools, rather than tutoring firms, should be responsible for student learning. The new policy would also bar foreign investors from investing in China’s curriculum-based tutoring businesses.



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