Mainland China has the world’s biggest education system, with 275 million students. The government spends more on education than any other item – 15 per cent of its fiscal budget – but households too devote around 13 per cent of their expenditure towards educating their children. Private institutions increasingly complement the state system.

All mainland China’s schools became public in the 1950s but in the 1980s private investment in education was allowed again.

Private institutions provide international schools for the middle-class, they supplement public schools in cash-strapped provinces, and they offer places for migrant workers unable to register their children in local public schools.

Education is compulsory for 6 to 14 year-olds but attendance of high-school students, aged 15 to 17, has climbed from 40 per cent to nearly 90 per cent over two decades and enrolment for higher-education reached the government’s 50 per cent target in 2019 – a year early.

The participation of private schools in the compulsory education stage is below 10 per cent and unlikely to rise, given the government’s focus on this sector and the requirement for these schools to be ‘not-for-profit’. However, the proportion of private high schools – the 15 to 17s – has risen above 20 per cent and is close to 30 per cent for higher education.

While private schools are different to public schools, they are complementary. Private schools have greater flexibility in syllabus-setting. And schools run for profit have more control over their revenues: besides tuition fees plus charges for boarding, school camps and uniforms, some local-government bodies pay the private sector to ease pressure on public schools.

In higher education, it is difficult for private schools to compete with public institutions, especially the public universities, which are well-funded and have better reputations. But rising demand for vocational learning has benefited the private schools, which are usually more market-oriented and can tailor courses to suit blue-collar and technical workers.

However, China has a declining birth rate: 24m babies were born in 1989, only 15m last year. The number of schools is thus falling, even if a greater share is private. There may thus be scope for mergers in the private sector.

Yet despite fewer births, the number of students in higher education has risen from 4m in 1998 to 33m last year with institutions increasing from around 2,700 to nearly 4,600. And the 52 per cent going into higher education is still below the average of 70 per cent for OECD countries: we thus expect Beijing’s target to be raised.

Manufacturing industry faces a shortage of skilled labour that is estimated to rise from 19m to 30m by 2025. The uncertainty caused by the pandemic has bolstered higher vocational education admissions, not least to avoid unemployment, but the virus also presents challenges for the record 8.7m higher-education students graduating this year.

But longer-term, mainland China’s economic growth and the demand for skilled labour – especially in ‘new economy’ industries – leaves private-school operators well positioned to mitigate the current economic pressures. Private schools are more adaptive than public universities and faster at rolling out new qualifications such as on automation, mobile-game design or robotics.

First published 22 September 2020.

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