A law that allows investors to profit from private schools has raised questions about the future direction of education on the mainland. After six months of discussions and revisions, the National People's Congress on Saturday approved the Law on the Promotion of Non-State Schools. The law is aimed at increasing the capacity of the education system to meet student demand, which currently exceeds what the state can provide. It will also apply to China's 56,274 schools that do not receive state subsidies. According to the China Daily, the law will give non-state schools the right to a 'reasonable profit'. Previously all schools, regardless of ownership, were allowed only to break even. No one argued with the principle of for-profit schools, since China needed more schools to help develop the country, said Tsinghua University law professor Li Zhaojie. 'But here in China the government is faced with the huge problem of building capacity,' he said. For-profit schools might also prompt curriculum improvements, which would push state-run schools to improve their teaching plans, Mr Li said. The Ministry of Education had forecast this 'reform' by reviewing all foreign-owned schools over the summer, said Toby Chu, president and chief executive officer of the Vancouver-based Capital Alliance Group, an investor in the Canadian Institute of Business & Technology School of Business (China). He added that Chinese people could now afford private education and suggested that entrepreneurs were more than ready to offer it for profit. The Canadian school's mid-2001 partnership agreement with the Beijing Polytechnic Institute was a success that had generated queries about setting up other such ventures, Mr Chu said, and he expected more announcements over the next few months. But the law also raises doubts. It is still a draft, few people outside closed government circles have copies, and there are no companion regulations, which in China are usually more specific than laws. Mr Li expects the law to create technical difficulties such as deciding who qualifies to pursue profits and who will keep track. The law is also not an open invitation to foreign investors - it was more for Chinese-owned schools, said Michael O'Sullivan, director of the British Council, the educational and cultural section of the British Embassy in Beijing. Although foreign investors can expect more liberal reforms over the next year or two, especially in foreign language and technical education, he says state schools can handle the basics and more. 'It's a sector on the whole that's not that easy to flourish in because the state schools are quite dynamic,' Mr O'Sullivan said, adding that 'brand conservative' parents would be unlikely to switch from well-known state schools. Another potential barrier is that the state wants to keep a grip on its own core education, which emphasises classes such as Mao Zedong ideology, that train people to respect the government. It is unlikely the government would share this education with foreigners, said Alexander May, an attorney with the Shuang Cheng law firm in Beijing. 'How free can it really be?' he asked. 'The place you indoctrinate kids and win their hearts and minds is in elementary schools.'