Business China Youth Series: Evolution of the Technology and Education Industries – New paradigm or disruption?

Singapore, 27 August 2021 – With much speculation surrounding the technology and education industries in China recently, it was timely that Business China Youth Series had Mr Jesse Li Shu, Founder and Chairman of Kewo Education, and Dr Tan Eng Han, Regional Director (Asia) of ACT Inc (USA), to share with us on the new challenges and opportunities present in the Chinese private education market. We were also honoured that Mr Sun Jingcan, Partner at Grandall Law Firm (Nanjing) could join us at this bilingual zoom webinar to provide advice on this topic from the legal perspective.

When one door closes, another opens

In the face of the “Double Reduction” policy, which refers to a reduction in time commitment required by school homework and a reduction in after-school private tuition, the survival of many private education companies in China seems to be at stake. However, as the saying goes, “when one door closes, another opens”. Dr Tan is optimistic that vocational training is going to be the next big market in China’s education industry. He shared that private education organisations in the past have focused their expertise on core subjects such as English and Math, etc. However, with the intervention of the government’s new policy, it is foreseeable that close to 50% of middle school graduates will take on the vocational route. Going forward, the market will see a shift towards private training in music, the arts, robotics, programming and other interest development classes. Mr Li Shu concurred on this point, adding that there would be more diversification in the types of training being offered in the industry. As more parents pay attention to quality-oriented and personalised education for their children, the demand for holistic development and individualistic trainings will also rise in time to come.    

Development prospects for international training platforms and the private education industry

Are we going to see a withdrawal of international training platforms from China though? Quite unlikely. Dr Tan elaborated that the successful international training schools all this time have been those that collaborated with local schools and brands. He commented that because the new policy prohibits private tutoring of core-subjects during the school holidays, public holidays and weekend, new market opportunities may arise as parents send their children for overseas summer camps. So long as the organisation has an edge and can offer high quality education, the yearning for private education has always been in demand and will continue to be the case even with the implementation of the Double Reduction policy, according to Mr Li Shu. He also mentioned that there will be more opportunities for youths to take on technology-related courses and more potential for Edtech companies to grow.

A new chapter: Data and internet security

Just as how investors should keep an open mind with regards to the private education market in China, the same mindset should be applied to the technology sector albeit the recent scrutiny by the Chinese government, keeping in mind that any internet industry practitioner would need to observe the Chinese law more closely than ever. Mr Sun Jingcan gave a brief overview of Didi Chuxing’s (a ride-hailing company) recent IPO fiasco, explaining that the technology sector is undergoing transformation in the areas of data and internet security. Many factors contributed to Didi Chuxing’s downfall – a lack of privacy issues for its passengers and security loopholes exposed by several criminal incidents, but most importantly, the risk of potential data leakages that could undermine China’s national security should the company go public in a foreign country without first undergoing a data security assessment by Cyberspace Administration of China, he added. Mr Sun advised that there are vast and plenty opportunities in the expanding technology sector, but one would have to abide by the governing legislations or face severe consequences otherwise. 

Business China would like to extend our sincere appreciation to our moderator Mr Cheng Wan Li, current student at Peking University and simultaneous interpreter Mr Li Muhan, current student at Columbia University. Both are our Business China Youth Chapter (BCYC) members. 

Please stay tuned and follow Business China’s social media channels for more details on the next Youth Series!