China’s new private tutoring regulatory watchdog is another blow to the industry amid ongoing crackdown

The Off-Campus Education and Training Department will oversee teachers and curricula for private education companies, a once-booming market in China

The crackdown threatens investments made by Big Tech companies like ByteDance, Tencent and Alibaba, which have all poured money into private tutoring apps

Reading Time:3 minutes

Remote learning and private tutoring has exploded in popularity in China, but the government is giving the industry more oversight with a new department dedicated to to task. Photo: Shutterstock

Published: 7:00pm, 16 Jun 2021Updated: 7:12pm, 16 Jun 2021

China’s Ministry of Education has created a new department to oversee the country’s booming off-campus tutoring market and bring regulatory oversight to private teachers and curricula, spelling trouble for an industry that has proven attractive to venture capital.

The Off-Campus Education and Training Department will supervise institutions that provide training and tutoring to Chinese students from kindergarten through high school, according to the ministry. It will work with other regulatory bodies to help private educational institutions set up Communist Party cells and establish rules for incorporation, fees, and the content, scheduling and qualifications of training.

Harsher regulations could cloud the future of China’s vibrant private education market. News of the added oversight sent industry stocks tumbling in New York and Hong Kong. TAL Education and Gaotu Group, formerly GSX Techedu, dropped by about 3 per cent each on the New York Stock Exchange (NYSE) on Tuesday, falling to US$28.90 and US$15.70, respectively. New Oriental Education, also listed on the NYSE, fell 2 per cent to US$9.50.

Students need help to prevent burn-out by additional education after normal school hours, the ministry said. In March, President Xi Jinping called after-school training services a “social problem”, spurring a series of crackdowns.

Xiong Bingqi, director of the 21st Century Education Research Institute in Beijing, said after-school tutoring was difficult to regulate without a specific body dedicated to it.

“The new department has two key missions,” Xiong said. “First, to determine requirements for the industry; second, to set up a system to ensure that all off-campus tutoring institutions are qualified.”

These services have been extremely popular in China, as many parents look for ways to give their children a leg up. A report published last July by the National Institute of Education Sciences, TAL Group, and Oliver Wyman estimated that China’s after-school training market for kindergarten through 12th grade would reach 730 billion yuan (US$114 billion) in 2021, up from 400 billion yuan in 2020.