With the fast growth of the domestic economy and improvement of people's living standards, China has witnessed a rapid expansion of the private education sector over the past few years.

By the end of 2002, China altogether had 61,2000 private schools, with 11.2 million registered students, up 9 per cent and 23 per cent respectively from figures for a year ago, according to official statistics.

Supplementary to the public education system, these private schools offer residents in this world's most populous country more opportunities to receive education and meet the diversified demands of various student groups.

Education has also become a new fashion in consumption among the Chinese. As much as 33.5 per cent of the respondents in a recent survey by the National Bureau of Statistics expressed their willingness to put education of children on top of the consumption list of the household.

It is estimated that the potential consumption power of Chinese people in cultural activities and education now stands at 300 billion yuan (US$36 billion), which is expected to double by 2005.

Market potential

All these figures point to a huge market potential for private education in China. But compared to traditional public education, which still dominates the Chinese education system, private education still needs more efforts from both the government and the public to grow steadily.

The regulators have a lot of work to do in policy designing and legislation. And more improvements within the system are also needed for better marketing and the attraction of better trained people.

Fuzzy policies are one of the biggest obstacles private education has been facing.

In countries where private education flourishes, such as the United Kingdom and Japan, normally special laws governing private schools are in place to ensure efficient management of the private education sector, and set entry standards, regulations, staff recruitment, diploma management, financial matters and the whole procedure for opening and closing private schools.

China does not have such laws, but certainly needs them to build a sound legislative framework for private education and offer it equal treatment with public education, which, as the big brother, is still privileged in many aspects.

Legislation will also give private education a clearer position. What role it should play in the education industry and who it should be serving are all issues left to be covered.

In practice, related government departments should improve services and provide a helpful environment for private educators.

For example, now many privately run higher education institutions are not allowed to issue officially recognized diplomas. That has cut the competitive edge of these schools and made them much less attractive than public schools.

And in many cases, the graduates of private schools do not receive the same treatment as those from public schools in residential permit quotas and employment.

The staff of private schools are not covered by the salary system, insurance and social security benefits of the public educators.

This unfair treatment should be removed by regulators and new policies should be designed to give private schools and educators a fair chance of development and competition.

To ensure the quality of education, these private schools also need good teachers and more financial income to build good facilities.

However, lack of properly trained teaching staff as well as insufficient financial income have forced some schools to fold.

So far, most of the private schools still have to raise funds by themselves. But fund shortages often emerges, and some schools do not have the money to build enough dormitories, while some try to increase tuition and other charges students must pay.

The operation and management of private schools concerns more than just educational skills. To get a good reputation, a school must offer comprehensive studies in the first place, then qualified managers and marketing staff and finally, an efficient regulatory scheme.

Challenges

In the next few years, private educational institutions will meet more challenges as the demand for educational services is expected to be more diversified and more investors will participate in the industry.

With China's entry into the World Trade Organization, many restrictions on overseas studies will be gradually lifted, which will bolster educational exchanges and communications between member countries and regions.

Therefore, it will be easier for Chinese students to study overseas and foreign educational institutions and intermediaries to enter the domestic education market, which will mean intensified competition for domestic private educational institutions.

To tackle these challenges, Chinese private education operators will have to build up their fundamentals and improve services as soon as possible and get a sound footing in the market.

After all, the education market in China is still underdeveloped. With only 1.5 per cent of the world's educational expenses, China has been trying to educate 25 per cent of the world's population. And compared to many foreign countries, where private schools and universities have made their names, China still has a very low ratio of private schools in its education system.

The growth potential for private education in China is obvious. The point is how to grasp the chances and build up China's own Harvards and Yales.

The author is a senior expert with the National Bureau of Statistics.

(Business Weekly 09/23/2003 page1)