Government memo hints at the kind of tutoring Beijing wants

Business & Technology

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A notice (in Chinese) issued by the Central Committee and State Council on Tuesday prompted a stock rally among Chinese education companies — not for how they’re run now, but how they could be run in the future.

  • The vocational education system should be improved, standardized, and aligned with the country’s economic needs by 2025, according to Beijing’s plans.
  • At least 10% of all higher education admissions should be to vocational schools, the document also says.
  • Publicly traded education firms jumped as much as 20% after the guidance was published, seemingly offering a way to pivot from for-profit tutoring as companies like OneSmart begin to fall.

The context: China’s desire to strengthen vocational education is nothing new. For years it has laid out multi-year plans, including as recently as last year — though the effort is increasingly urgent as the country seeks to move up the value chain in manufacturing, better utilize its shrinking workforce, and reduce dependence on foreign technology.