New guideline aligns education with national goals, gives edtech startups fresh way

Until China firmly cracked the whip on haphazard private-sector education in late July, not many among the business and investment communities engaged in the multibillion-dollar sector realized the joy ride on the gravy train, characterized by a cart-before-the-horse approach to market shares and bottom lines, cannot be an endless one, insiders said.

Jiang Ya and Feng Chongguang, analysts at CITIC Securities, said: "The new guideline (issued in July) is just the starting point. We expect the K9 (kindergarten to 9th grade) after-school tutoring segment will embrace a long period of supervision in both business development and fundraising."

For one, education, from society's perspective, has sanctity and cannot be allowed to be trifled with by runaway market forces.

For another, if, in the name of competitive education, both students and their parents are driven to untold stress and desperation, then the hoped-for payoffs of pursuing such curriculum-intensive, expensive education－better grades and, ultimately, a solid foundation for a better life that can add value to society and economy－would be in jeopardy.

So, the 4.12 million businesses－startups, partnerships, listed companies, what have you－that constitute China's private education sector have put themselves on the path of a quick course correction, in order to sustain their pursuit of billions of yuan in annual profit and double-digit annual growth, and, more importantly, to align themselves with national goals, experts said.

Nowhere is this change of mindset more apparent than in the nation's online education segment that, in the estimates of iiMedia Research, grew by about 10 percent to 454 billion yuan ($70.1 billion) in 2020.