The Chinese government believes that private institutions, vocational schools, and online education providers have a major part to play in its bid to expand China’s education system over the next five years.
According to the South China Morning Post (SCMP), analysts have tipped the private education sector to be “one of the biggest winners” in China’s 13th Five-Year Plan on Education.
The plan aims to provide better quality education in the central and western provinces and impoverished regions, ensuring “modern vocational education” opportunities to the vast rural population.
In a circular released last month, the State Council said education reforms would focus on “student quality”, “creating a favourable campus and social environment”, and “international cooperation”.
Its goal is to raise the percentage of school children moving onto higher education from 40 to 50 percent by the year 2020, bringing the total to around 350 million.
— Di Hu (@CoachDiHu) February 12, 2017
Li Wei, an equity analyst for Sinolink Securities, says that privately-run learning institutions will provide most of these additional places.
“Educational reform is right on track, and the most important theme this year is investment in the development of private higher education institutions,” he said.
Johnny Kin Man Wong, an equity analyst for Jefferies, also told the SCMP that he expects the Chinese government to support companies offering education services – such as Tarena, the country’s largest professional IT education services provider – with business-friendly policies aimed at helping them grow.
However, he added that even without government help, he predicts that Tarena’s growth will remain strong, as demand for quality IT-related jobs continues to rise.
“Education for farmers, workers, and retired veterans has been emphasised within the 13th plan, and that should prove really positive for Tarena, given the bulk of its business is in vocational and further education,” said Wong.