China's economy has been sluggish for several years, leading to a wave of brick-and-mortar store closures in many cities. People now realize that the pandemic was only the beginning of difficult times. (Video screenshot)
People News — Under the immense pressure of a slowing economy and high unemployment, China’s three-year implementation of the “Double Reduction” policy has stalled. Signs indicate that, as authorities are forced to ease restrictions, the heavily impacted private education and training industry is quietly recovering. However, industry insiders believe it’s unlikely the industry will ever truly regain its former vitality.
According to a recent report by Reuters citing industry insiders, analysts, and review data, China’s private tutoring industry is quietly recovering as the government subtly relaxes regulatory pressure amid a slowing economy. This sector, previously devastated by the “Double Reduction” policy crackdown, is seeing signs of revival.
The report notes that while authorities have not officially acknowledged any policy shift, they have tacitly allowed the private education and training industry to expand in an effort to create jobs. This shift is evident from the growth of tutoring institutions and steps authorities have taken to clarify policy stances.
Wang Jian, a U.S.-based financial commentator, told Radio Free Asia that the main reason for this shift is weak consumer spending and rising unemployment: “The tutoring industry used to be a huge reservoir of jobs for college graduates, employing over 23 million people. If you destroy this industry, where are people supposed to go? The education sector provided a solid career path, with many teachers earning a good income.”
In recent years, China’s number of college graduates has reached new highs, hitting 11.79 million in 2024, according to official data. At the same time, youth unemployment continues to climb amid an economic slowdown. In September, the unemployment rate among the 16-24 labor force, excluding students, reached 17.6%. This rate would be even higher if students were included.
Wang Jian analyzed that, to save this “job reservoir” and reduce the unemployment rate, authorities had little choice but to discreetly ease control, though they remain silent on the issue: “The CCP never admits to mistakes. Even if it shifts direction, it won’t acknowledge it. Instead, it lets things gradually open up and expects people to figure things out themselves, carrying the risk on their own. This is how the CCP operates.”
From “Double Reduction” to “Promoting Consumption in Education and Training”: A Shift in Policy
In July 2021, Chinese authorities launched the so-called “Double Reduction” policy, banning for-profit tutoring in academic subjects. The policy aimed to alleviate the educational and financial burdens on parents and students, but it directly led to the collapse of China’s private tutoring industry.
According to China Central Television’s financial channel, before the “Double Reduction” policy, the education industry was valued at 2.4 trillion yuan and employed tens of millions, making it the second-largest employment sector in China and a popular field for top talent in 2021. However, after “Double Reduction,” Reuters reports that major education companies like New Oriental and TAL saw their market values plummet by billions of dollars, leading to tens of thousands of layoffs. Chinese media estimates that layoffs in the entire education industry exceeded 50%. A report by the National People’s Congress in October 2022 stated that, a year after implementation, the number of offline academic tutoring institutions at the compulsory education level had decreased from 124,000 to fewer than 5,000—a reduction of 96%—while online academic tutoring institutions dropped from 263 to 34, an 87% decrease.
However, this policy has been quietly shifting. Two years after implementing “Double Reduction,” the Ministry of Education introduced an online “whitelist” of approved companies providing non-academic tutoring. In February of this year, authorities released a draft document specifying types of permissible tutoring. In August, the State Council explicitly included “educational and training consumption” in a list of 20 measures aimed at “promoting service consumption.” This initiative is part of the current efforts to stimulate the economy, which has also boosted the stock prices of publicly traded education companies. Meanwhile, local authorities have significantly reduced the frequency of inspections of tutoring institutions compared to the peak of “Double Reduction” implementation.
Hu Zhifu, who previously ran a private education business in Wuhu, Anhui, and now resides in the United States, told Radio Free Asia: “For example, in the past, they would constantly inspect and call you, telling you to stop your business. Now, the education department is just observing; if no action comes from above, they won’t interfere.”
Commenting on these policy changes, Mr. Hou, a Beijing resident, told Radio Free Asia that parents’ WeChat groups were buzzing with heated discussions: “We were discussing, saying, look, the policy changed in just a few months! The government in China always works like this: it restricts things to the extreme, and then finds ways to save them—just like with the one-child policy. Now that they’re aware of aging issues, they’re trying to encourage childbirth. Why didn’t they act sooner?” For safety reasons, Mr. Hou did not disclose his full name.
Is the Education and Training Market Really Recovering?
With relaxed regulations from authorities, various data also indicate that the industry is gradually expanding. According to data from research firm Plenum China, cited by Reuters, the number of valid licenses for for-profit tutoring centers grew by 11.4% between January and June 2023. This year, both New Oriental and TAL Education have hired thousands of new positions. Additionally, statistics from company annual reports and Reuters’ data from major Chinese employment platforms indicate an increase in the number of schools and learning centers operated by New Oriental and TAL. Parents have also noticed that tutoring schools have been operating more openly in recent months.
Regarding the expansion of the education and training industry, Xiong Bingqi, director of the 21st Century Education Research Institute, told Singapore’s *Lianhe Zaobao* that some local education departments have currently adopted a tacitly permissive attitude. This is partly because parents have a real demand for academic tutoring and partly due to various considerations such as the economic environment, leading them to “turn a blind eye.”
Zhai Deyun, who once founded a tutoring institution in Nanchang, Jiangxi, and is now living in the U.S., told Radio Free Asia that academic tutoring has always existed regardless of official policy: “In the education industry, it’s a matter of whether it’s open or underground. As long as the college entrance examination system remains, there will always be this demand.”
As for the hiring and expansion of companies like New Oriental and TAL, Zhai takes a cautious stance: “When the Communist Party wants to build something up, they will always promote a few typical cases. The question is, can these examples really represent the situation? It’s not as optimistic as it seems.”
Hu Zhifu told Radio Free Asia that information from his former colleagues reveals a “polarization”: institutions focused on core academic subjects (such as math, science, and English) have indeed seen a rebound in enrollment. Although the number of students is still lower than before, prices have increased. Meanwhile, non-essential interest-based tutoring institutions continue to struggle. Many small and medium-sized business owners are also hesitant or reluctant to reinvest in the industry.
Business Owners Reluctant to Reinvest in Education and Training?
Hu said, “From what I’ve learned through friends, they are also unwilling to re-enter this industry. Establishing an education business requires physical facilities and teaching staff, which involves a massive system. Asking them to reopen and invest in an uncertain future is something many people don’t want to do.”
Hu still vividly remembers how the government abruptly “cut down” on all off-campus tutoring institutions after “Double Reduction.” At that time, local authorities’ approach involved community leaders monitoring education institutions: “For example, if there were ten tutoring institutions in your area, leaders would keep watch, checking in on weekends and obstructing operations, essentially killing the institutions by preventing them from opening.”
Zhai Deyun also pointed out that this back-and-forth from authorities has made most people “wake up” and think twice before investing in education and training again: “During the pandemic, and later when the entire education industry was banned, many people lost everything. I also transferred my business to others, and those who took over suffered heavy losses.”
From a market perspective, Wang Jian also believes the industry will never return to its pre-pandemic state: “Firstly, people don’t have the same purchasing power as before; incomes are down, so there’s less money to spend on tutoring or interest classes for their children. Another key factor is that many college graduates can’t find jobs now, which has dampened parents’ motivation.”
Parents: No Obvious Signs of Recovery
Beijing parent Mr. Hou observed that although the tutoring industry has picked up slightly, it hasn’t reached the level of previous popularity: “For instance, several ‘Xue’ersi’ (a tutoring brand) centers around my area remain closed.”
Mr. Liu, a parent from Shenzhen who uses a pseudonym for safety reasons, said there’s a large education complex below his building, which used to be very lively. However, after the “Double Reduction” policy, many of these institutions closed down almost instantly. He added, “For the past few years, it’s basically been deserted, with only two or three places still open. I haven’t noticed any signs of recovery recently—no change in the situation!”
Mr. Liu told Radio Free Asia that, in the past, tutoring costs were high, and with the economic downturn, people are no longer blindly enrolling in classes. Parents’ views on the college entrance exam have also shifted: “Even if your child gets into a good university, they may still struggle to find a job after graduation. Now, people are thinking about how to bypass—finding alternative paths rather than just preparing for exams.” For example, he mentioned friends who obtained Hong Kong or Macau residency for their children to apply to domestic universities, where entrance requirements are significantly lower.
Former Education Company Owner: Don’t Take Official Policies Too Seriously
Regarding the shifting policies in the education and training sector, Mr. Liu believes the root issue lies in the government’s “letting go leads to chaos, controlling leads to ruin” approach: “The government intervenes in too many things; their reach is too extensive, yet their management skills are subpar, so they end up stifling the industry when they try to control it.”
Mr. Hou also questioned the government’s inconsistent policies that undermine entrepreneurs’ confidence: “You could be doing well, and then a policy comes along that shuts you down. Now they say they want to save you—do you still have the confidence to start over?”
Zhai Deyun, a former education business owner, advised caution regarding policies in education or other areas, as the CCP’s approach is often impulsive and temporary: “Just don’t take it too seriously.”
(Reprinted from Radio Free Asia)
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