China Q1 Education Update
This research provides an overview of eight key developments in the Chinese education system during the first quarter of 2019. These developments include China’s Education Modernization 2035 blueprint, plans by the ministry of education to open big data, AI and robotics majors in universities, Sino-US education exchange programs and cooperation, and several mergers, acquisitions and venture capital investments in the education sector. The Chinese president has also urged teachers to instill and support patriotism of the ruling communist party. Schools have also taken steps to curb romantic relationships by segregating boys and girls. Details of all these findings are outlined below.
Key developments in China's education system
#1: President urges teachers to instill patriotism and support for the ruling Communist Party
The Chinese President Xi Jinping, has urged teachers to instill and support patriotism for the ruling Communist Party in primary, secondary and tertiary schools. He also called "courses on the ideological and political theory" and to reject the ideology that does not support the Party. His remarks are part of the measures being implemented to curb Marxist student movement and protests over inequality and corruption at universities and major cities.
#2: China's Education Modernization
China's Education Modernization 2035 blueprint by the Communist Party of China Central Committee and the State Council aims to set the direction for the education sector's future. The plans entail "establishment of a modern education system, universal quality pre-schooling, balanced compulsory education, vocational education, competitive higher education, and education plans for those with disabilities." The ten strategic tasks in the plan include; equal access to basic public education services, building world-class universities, and opening education further to the world.
#3: Article 12 limits mergers and acquisitions in the education sector
Article 12 prevents private schools from rapidly expanding by acquiring non-profit schools. This article has a clause that the chairman of Yuhua Education, Li Guangyu, appealed during the annual National People’s Congress. The law has had a negative impact on education stock prices because it limits mergers and acquisitions.
#4: Plans to open majors on big data, artificial intelligence (AI) and robotics
China's Ministry of Education recently announced that in 2019, they plan to open 400 majors on big data, artificial intelligence (AI) and robotics. This is part of the country’s strategy to remain globally competitive in AI technology innovations and applications. This will also entail the promotion of online courses (MOOC) and vocational schools.
#5: Promoting US-China relations with cooperation and exchange programs
The Chinese President Xi Jinping is keen to enhance the Sino-US education exchanges and cooperation including "bilateral cultural and people-to-people exchanges and cooperation" aimed at promoting US-China relations. The president of Harvard University, Lawrence Bacow, had made remarks during his visit to promote exchange programs with China.
#6: Boom of the private education sector
Despite the economic downturn, the private education sector is booming. This sector is growing at a 10.8% CAGR and projected to reach US$744 billion by 2025. This shows an increase in international and private schools, including online education platforms. Key drivers of the growth of the private education sector are economic growth and affluence reinforced by a commitment to children’s education. Venture capital and private equity investments in the sector have also increased including improved valuation of education companies.
#7: Key developments in mergers, acquisitions and venture capital investments
The following is a list of the most recent mergers, acquisitions, and venture capital investments:
- Xiaoyang Edu, an intelligent education Start-Up company raised $22M Series B Round funding to support technological development.
- Huohua Siwei is a Chinese online mathematics and science education platform secured $40M Series C Round from Northern Lights venture capital.
- Polestar AI is a Chinese artificial intelligence (AI) start-up which specializes in education raises funds in series pre-A round of financing led by Xidian Tianlang Venture Capital.
- Easy Transfer is a Chinese student financial services platform raised $15 million in a series B round of led by Chinese investment firm ChinaEquity Investment.
- TAL Education Group is a Chinese after-school tutoring services provider sold about $500 million of newly-issued Class A common shares to Hillhouse Capital Group.
- Acadsoc is a Chinese online English learning platform raised $15 million series C1 financing round led by IDG Capital and government investment firm Shenzhen Capital Group.
- Zhangmen is a Chinese online tutoring platform for primary and middle school students raised $350 million in series E1 Round of financing.
- DaDa is a Chinese online English tutoring platform raised $255 million series D financing round.
- Minsheng Education Group strategic cooperation with China International Capital Corporation (CICC) to launch a $1.45 billion merger and acquisition fund.
#8: Debates in the media
A key debate sparked on social media after a high school segregated boys from girls during cafeteria breaks to prevent flirting and romantic relationships. The ban also stopped hand-holding, pupils spending time alone, and development of a point system. This led to media exposure with debates centered on the need for and effectiveness of such behavioral strategies.
A proposal by Gu Jin, the National People's Congress deputy and chief physician at Peking University Cancer Hospital, for death education to start from primary and secondary schools has generated debate in social media. Some proponents suggest that they may implement the policy along with education on China’s death taboo. The proposal has also sparked a debate on terminal illnesses, assisted suicide and euthanasia.