We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.

Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]

China’s crackdown on profit-making education

China appears to be doing its level best to harm itself in the long term. This story hasn’t so far stirred a lot of international commentary, but it matters, I think. It shows that the rising nationalism (and arguably, a degree of paranoia) in China is reaching the point where it is damaging the domestic economy.

According to one report in Forbes:

Chinese authorities have ramped up their crackdown on after-school tutoring companies by unveiling a new set of sweeping regulations that bans the firms from making profits and raising capital from overseas markets.

Tutoring companies that teach school subjects are now required to register as non-profits. They are also banned from raising capital from overseas investors or through public listings.

What’s more, authorities will stop approving new tutoring companies seeking to teach China’s school syllabus, and require existing ones to undergo regulatory reviews and apply for licenses. The companies found to be in violation will be rectified or eradicated, according to the rules, without further elaboration.

The moves by Chinese authorities have hammered shares of firms operating in the space.

One story I read in the Wall Street Journal said that China, while hitting private sector education, is at the same time trying to make it easier for young couples to have more kids, reversing decades of its odious “one child” policy.

Why does this matter? Because the ever-shifting moves of Chinese authorities on certain sectors must make it hard for entrepreneurs in that country to plan ahead. One moment a chap like Alibaba’s Jack Ma is a sort of business “rock star”, and the next, he’s “disappeared”. In my job in the financial services industry, I have heard a lot of comments over the years on how vibrant, dynamic and coherent Chinese policymaking is, so much better than all that messy Western “neoliberalism”.

Well, it turns out that things in China aren’t quite what they are cracked up to be.

8 comments to China’s crackdown on profit-making education

  • Mr Ed

    And yet Red China has ownership of some British private schools.

    I wonder if Sir Keir Starmer’s lot are studying Red China’s latest assault on private education for tips on how to proceed, and Mr Johnson’s lot are hoping to copy any of their plans.

  • Johnathan Pearce (London)

    Mr Ed, that’s my worry. I have pretty much written off the current government as a bunch of authortarian buffoons.

  • The companies found to be in violation will be rectified or eradicated, according to the rules, without further elaboration.

    If the Chinese Communist Party told me I was to be “rectified or eradicated”, I wouldn’t feel the need for any “elaboration” – or the desire to hang around seeking it.

  • Paul Marks

    The People’s Republic of China is beloved by Big Business.

    Its taxes are lower, it is not crippled by debt (at least not as crippled as Britain and the United States) and they-say-this-bit-very-quietly China is not “Woke” – in China business does not have to employ people who are both lazy and dumb (and often actually destructive) to fill quotas of certain groups. There are hard working and intelligent members of these groups – but they are NOT the people Big Business often has to employ, as the “activists” take great pleasure in pushing the worst, not the best, members of these groups – and making Big Business employ them.

    For example it is not enough in the West to employ a women to write a comic or a fantasy film script – she must be a woman who HATES comics and DESPISES fantasy films. “But she will produce stuff that very few people will want to buy” – yes, THAT IS THE POINT (the worse – the better). And not just in this industry – in all industries. It is not enough that, say, an engineer have a certain skin colour – the engineer must also be NO GOOD AT THE JOB – appointing a black person who likes engineering and is good at it, will not gain a corporation any points quite-the-contrary. A Corporation that insisted that the people from certain groups must be good-at-their-jobs would soon be forced into a grovelling apology “we condemn our treatment of members of disadvantaged and marginalised groups – the managers who acted in this way have been dismissed, DEATH TO THE WEST!” this might, just might, earn the Corporation a pass by the rulers of our world – the blue check marks on Twitter. Remember, as the modern professors of mathematics have made clear, 1+1=2 is “White Supremacy” – the FBI will be after you if you hold that 1+1=2 is objective truth. And having black skin will not save you – because you are not “really” black.

    All if this can be avoided by moving to Asia – especially China, where if a “Woke” (i.e. Frankfurt School) activist caused too much trouble, they might well be vivisected and their organs sold. China has had its “Cultural Revolution” (unlike Stalin, Mao was open to Frankfurt School ideas) and it does not want another such episode – and it has nothing but contempt for the Frankfurt School of Marxism dominated West. I am told that there is even a new Chinese character (in Chinese script) that means “white leftist” – for a Chinese to use this term about another Chinese is just about the worst insult possible.

    But Big Business has forgotten something….

    There is nothing, nothing at all, that the Chinese government can not do. And there is no way of voting them out of office.

    Today the Chinese government generally supports Big Business (although not always – as this example of for profit schools makes clear) – but they could change policy over night.

    “Why should they?” – why should they NOT? Who is going to stop them?

    Let us say that Winnie the Pooh got up tomorrow morning and decided that it would be nice to have the leading foreign devil Big Business types impaled – so he could watch them die over breakfast.

    Who is going to stop him?

    And would China, at this stage, really be hit by this? After all the Chinese are very intelligent – and have no great need of white Big Business types (at least not any more), they are quite capable of running their own Big Business enterprises.

    And that has happened before in Chinese history – several times many vast private business enterprises grow up.

    And then the “wind of Heaven changed” – and the private business enterprises (remember these were Chinese owned business enterprises) were nationalised (because some court official felt like it) and the owners had their heads sawn off.


    Why not?

    Remember that bit about “Woke” activists being vivisected if they tried their absurd antics in China – anyone who thought that was amusing should think about the following…..

    “A government that has the power to do that to people you dislike – also has the power to that to YOU”.

  • Paul Marks

    Both Gramsci in Italy and the Frankfurt School in Germany (and later in New York and California) got something right – something that Karl Marx and Frederick Engels got wrong.

    In the end it is not the “economic base” that determines the “cultural superstructure” – it is the culture that, in the end, creates the economy.

    When, for example, Charles the Bald agreed in 877 that there were certain things that a King of France could NOT legally do (such as change the doctrines of religion, or take land from one family and give it to another family) he was NOT responding to some change in the “forces of production” (some new invention of technology).

    And when Louis X decreed that no one could be a slave in France he was NOT “adopting a Feudal mode of production” – on the contrary he ended most of serfdom as well.

    These men, and many others, were responding to the cultural ideas around them – cultural ideas NOT produced by the technology (the “forces of production”).

    In the end Big Business depends on the cultural principle that there are certain things government may NOT do.

    To this cultural tradition both Dr Fauci (with his doctrine that the magic words “Public Health” justify any action by the state) and Winnie the Pooh rule of China, are equally alien.

    Yes Big Business types – your own long term existence depends on the “primitive” limited government ideas of the “Red Necks” you despise so much.

    Such as the idea that the will of the bureaucracy is NOT the law.

    The ideas of limited government, and of individual rights AGAINST the state – rights based on the value of the individual human soul.

  • The Wobbly Guy

    China thinks it can impose such a change to a fundamental trait prevalent in East Asian societies. Good luck to them.

    Especially when the scions of the rich and famous are found to either:

    1. Receive preferential treatment for school admissions
    2. Receive private tutoring that’s ostensibly non-profit, but obviously rigged to ensure they are tutored by the best and brightest

    This reminds me of South Korea’s own war on hagwons.

    I wish I had time and energy to do private tutoring myself, the money’s really good and my subject matter is amongst the toughest. But my two rascals are just too much to handle…

  • Dee Bee

    Interestingly, AEP in today’s Telegraph (£) writes on the same theme:
    (I have saved a pdf of that article. Is there a way to attach it for those without a Telegraph subscription?)

  • Johnathan Pearce

    Paul Marks: what appears to be the case – as referenced in the Daily Telegraph article by AEP (thanks Dee Bee) is that President Xi wants to crush any sign of independent thought and action in the leading corporations of China, including those that have been at the cutting edge -relatively speaking – of innovation, such as Alibaba, Tencent, etc. Chinese firms listed on Western exchanges have seen their share prices crushed, and Western investors have been bloodied. They will not forget. China is trying to force firms to list in Hong Kong instead, and that makes sense as the jurisdiction is crushed and brought fully under mainland control. China is pursuing, as the Daily Telegraph notes, a policy of autarky. This is not so much communism as a fascistic type of state capitalism, with the capitalism bit increasingly weakened and subject to state direction in all essentials. Capital flows from non-Chinese investors could dry up if people wise up to the brutal treatment by Beijing of investors. The cavalier crackdown on education businesses is a case in point.

    There is nothing particularly cunning or smart about what Xi is doing, although that bastard has concluded, probably correctly, that the US is led by a weak man (possibly with early-stage dememtia) and surrounded by people who applaud the authortarian, collectivistic forms of Chinese society. Much of the world appears too weak, or resigned to events, to do much about China. Maybe there is not much that can be done, other than for the West to continue changing its supply chains, and building alliances with Asian nations to resist further bullying from Beijing. One must hope that sooner or later, Xi fucks up so badly that he is removed. It cannot happen soon enough.