New non-profit policies, demographic changes in China and my new videos
Your weekly China update from Cyrus Janssen
Hello Friends,
Today's newsletter covers the following topics:
Current news: Chinese Education companies non-profit policy
General concept: Tackling demographic changes
What I am doing: Nanjing video and new Real Talk China episodes
1. Non-profit policy for Education companies
What happened? On July 24, the Chinese government released a new policy document banning for-profit tutoring in an effort to reduce financial and social pressures on families and students. The policy aims to reduce competition among parents, who increasingly live in an environment where any price is paid to ensure children receive the best education possible, increasing demand for private tutoring.
Implications The policy also requires public elementary and middle schools to reduce homework and offer more extracurricular activities, indicating a move toward a more Westernized education system. The new guidelines also call for universities such as the country's top universities, e.g., Tsinghua and Peking Universities, to offer more places and increase enrollment in high schools. This is expected to make education more affordable and accessible and increase social mobility.
Capitalism with Socialist Characteristics In a recent tweet, I raised the issue of Chinese capitalism being different from the Western system. The current example shows that the government restricts certain parts of the liberal market so that the majority of citizens can benefit. It does not follow the example of the U.S., where large technology companies are largely unregulated.
International reactions Critics pointed out that the policy would affect education in rural areas, where a large proportion of students rely on private tutoring to make up for the lack of quality instruction. Advocates tout a greater focus on students' physical and mental health as a way to ease the pressure. International investors responded by fleeing private tutoring companies such as New Oriental Education, whose stock price fell from an all-time high of $20 to $2.
2. Tackling Demographic Development
Development - following Japan? The latest census figures indicate that population growth in China is at a record low. As the population ages and fewer children are born, the burden on parents increases. In this multifaceted situation, parents often cannot afford to have more than one child because they have to save money to take care of their parents, leading to the reverse effect of fewer newborns.
Measures in many areas As Chinese authorities have recognized the problem, a variety of new regulations have been introduced: The three-child policy has been introduced, with the possibility that it will be abolished altogether in 2025. To incentivize expectant parents, there is longer parental leave, financial support for couples and maternity insurance to cushion the cost of having a child. Other areas include tax exemptions, medical care for parents or higher retirement age.
Importance of education Because Chinese society places a higher value on education than almost any other, it affects many other areas of life, such as housing costs. Since admission to a school depends on where you live, prices for apartments near the best educational institutions have skyrocketed in recent years, especially in Beijing and Shanghai. As a result, price guidelines for new housing are being introduced and education costs are being reduced to address the root of the problem.
3. Can sport improve US/China Relations?
My favourite moment of the 2020 Tokyo Olympics happened a few days ago:
To follow up on the importance of the Olympic Games and how this simple act can hopefully change the future of the US/China Relationship, I’ve decided to do a deep dive into the history of sport and how it’s impacted America’s relationship with China.
Do you remember 50 years ago we had Ping Pong Diplomacy? Stay tuned tonight at 9PM EST when our new video launches and we discuss Gymnastics Diplomacy!
I hope you enjoyed today's edition of my newsletter. Let me know if you have any feedback or comments. If you like the newsletter, please like and share. Have a great weekend ahead!
Cyrus