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Daily Digest | School’s out forever

Written by The Uptake Published on   1 min read

China’s edtech companies that offer core curriculum lessons must transition to not-for-profit operations.

Hi. It’s Brady again.

With the flick of a pen and a few stamps, the government nearly obliterated the edtech sector in China.

Essentially, all edtech companies must now operate on a not-for-profit basis. The Ministry of Education said the process of student instruction has been “severely hijacked by capital,” which “broke the nature of education as welfare.”

My colleague Jiaxing provided a recap of what happened in the past few days. Here are some highlights: companies that offer out-of-school classes that align with public curriculum cannot seek IPOs, cannot accept foreign capital (even through VIEs), cannot teach foreign curriculums, and cannot hire foreign teachers outside of China.

Edtech companies expectedly said they will abide by the new rules, but also emphasize their operations and financial prospects will be negatively impacted. Some might transition to offer professional training for adults, but the general outlook for the sector is grim.

Education is a resource, and for-profit operations have been skewing access that was already unequal before paid courses became part of the equation. The authorities have been cracking down on big tech since late 2020, but it looks like they’re still only getting started. One wonders: who’s next?

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