China two sessions: tightened regulation of ‘chaotic’ K-12 off-campus education market may spoil Big Tech’s expansion plans

President Xi Jinping has described the domestic market for K-12 after-school education services as a ‘social problem’

China’s top legislature has indicated that off-campus training services create problems for the country’s education sector

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Tightened regulation of China’s K-12 off-campus education providers may spoil efforts by Big Tech companies to expand in the market. Photo: Shutterstock

Published: 9:00pm, 11 Mar 2021Updated: 12:16am, 12 Mar 2021

China’s US$110 billion K-12 off-campus education market, which has struggled during the coronavirus pandemic, is now bracing for a regulatory storm amid comments expressed by the country’s leaders, lawmakers and advisers in the “two sessions”, the country’s biggest annual political gathering.

President Xi Jinping described the domestic market for K-12 – referring to kindergarten to 12th grade – after-school training services as a “social problem” in a meeting last week of the Chinese People’s Political Consultative Conference (CPPCC).

“It can’t be solved by the education authority alone, and all social aspects and related departments should make joint efforts to study and solve it,” Xi said in comments published by official media.

While it remains unclear exactly how regulations are going to be rolled out, the message from the National People’s Congress (NPC), China’s top legislature, indicated that off-campus training services are “chaotic” and create problems for the country’s education sector. Typically, primary school pupils take extracurricular tutoring on top of their studies on campus to perform well in examinations.

The prospects of tightened regulation could bring uncertainty to the market and the plans of Chinese Big Tech companies to expand operations in the education sector. Tech unicorn ByteDance, owner of short video-sharing apps TikTok and Douyin, recently announced its intention to recruit some 13,000 new employees for its growing Dali education business.

Typically, Chinese primary school pupils take extracurricular tutoring on top of their studies on campus. Photo: Xinhua

Big Tech’s vast resources are expected to help them continue their expansion into education. “The internet giants won’t give up their education initiatives,” said Claudia Wang, a partner at management consulting firm Oliver Wyman, said on Thursday.

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