China Q1 Education Update

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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.


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Quotes
  • "Chinese President Xi Jinping on Monday called for a tighter ideological grip on university campuses and in schools, demanding teachers step in to fend off what the ruling Communist Party sees as the “wrong ideas”. Speaking at a seminar in Beijing attended by teachers from across the country, Xi also called for courses on ideological and political theory to be strengthened at all levels, from primary schools to universities. Starting with toddlers, Xi said China must “nurture generation after generation [of young people] who support Chinese Communist Party rule and China’s socialist system”."
  • "His speech comes after a nationwide crackdown on a small but burgeoning student movement led by young Marxist activists at universities in major cities, protesting over growing inequality and corruption in Chinese society."
Quotes
  • "The Ministry of Education, General Office of the State Council and Central Party Committee announced some major plans to modernise education. Venture Education has put together some graphics to help people understand the new policies and learn what they’re all about. The first graphic looks at short-term plans for the first four years, while the second graphic lays out a longer-term vision to be reached by 2035."
Quotes
  • "Acquisition of existing schools has been a major way for school operators to scale up rapidly. The introduction of Article 12 – part of a broader law covering all aspects of private schools’ business, from registering to operation standards and finance – would effectively bar the companies from fast expansion and dim their investment outlook."
Quotes
  • "China will open around 400 majors related to big data, artificial intelligence (AI) and robotics in universities in 2019, China's Ministry of Education (MOE) announced on Tuesday. Another 612 new engineering research projects will also be implemented in universities"
Quotes
  • "Xi said education exchanges and cooperation are an important part of Sino-U.S. relations and help enhance the public opinion of the bilateral friendship. China advocates mutual learning, encourages Chinese students to study abroad and supports education exchanges and cooperation with other countries."
  • "Bacow said he is visiting not only as the president of Harvard University but also as a representative of U.S. universities to promote education exchanges with China. He said maintaining and deepening exchanges and cooperation between the two countries' education and cultural institutions is crucial to promoting U.S.-China relations in the long run. Hailing the popularity of the Chinese language at Harvard, Bacow boasted that Harvard has a large number of Chinese students"
Quotes
  • "Amid China’s economic downturn, its booming education industry has become a bright spark in the gloom thanks to surging demand for after-school learning, resulting in an influx of investment capital. Within the rapidly expanding private education sector, the fastest growth comes from after-school tutoring, such as private tutoring and English instruction classes as Chinese parents have no qualms about spending on such programmes to help their children."
Quotes
  • "Chinese Education Technology Start-Up Xiaoyang Edu Raises $22M Series B Round"
  • "Northern Light Co-leads $40M Series C Round In Chinese Online Education Platform"
  • "Chinese Tuition Payment Platform Easy Transfer Raises Nearly $15M Series B Round"
  • "Chinese AI Education Start-Up Polestar Ai Completes Series Pre-A Round"
  • "Hillhouse Hikes Stake In Chinese K-12 Tutoring Firm After $500M Deal"
  • "IDG Co-Leads Series C1 Round In Chinese Online English Learning Platform Acadsoc"
Quotes
  • "A high school in central China has segregated boys from girls during cafeteria breaks as part of its efforts to prevent romances. The school has also banned students from hand-holding and time alone with each other, pupils from Suiping County No 1 High School in Henan province said on the news-clip platform Pear Video this week. A member of staff from the county’s education bureau confirmed that the school put rules in place to prevent romantic relationships."
  • "The news prompted criticism on Chinese social media, as many people doubted such measures were either necessary or effective. “Is it wrong to have budding romances?” said one user on Weibo, China’s Twitter-like platform. “Shouldn’t a normal kid have emotions during his growth? You should give advice and communicate with them, not damage human nature by such extreme ways.”"
Quotes
  • "The hashtags “Proposal to Launch Nationwide Death Education” (#建议全民开展死亡教育#) and “Proposal to Launch Death Education” (#建议开展死亡教育#) were already viewed over 340 million times on Thursday, just 24 hours after it came out. In a video produced by Beijing News from this year’s annual ‘Two Sessions’ meeting, Dr. Gu Jin proposed that China should start “educating the nation on the topic of death.” Dr. Gu’s comments underline growing concerns over China’s death taboo."