China, Inspired by House Appropriations Bill, Cracks Down on For-Profit Education

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Chinese authorities have issued regulations forbidding a large swath of its education sector from using for-profit models. According to the Bloomberg coverage, “The new regulations, released over the weekend, ban companies that teach school curriculums from making profits, raising capital or going public…. Companies and institutions that teach the school curriculum must go non-profit.”

I was wondering where Chinese regulators might have gotten this idea of requiring education to be non-profit and then I remembered the House Appropriations Bill that was introduced two weeks ago. As the National Association for Public Charter Schools described the proposed legislation, “any charter school that contracts with a business to provide supplies and services to students [would be] completely ineligible to receive federal funds for anything…” The relevant language in the bill states: “SEC. 314. None of the funds made available by this Act or any other Act may be awarded to a charter school that contracts with a for-profit entity to operate, oversee or manage the activities of the school.”

When Chinese authorities seem to be imitating House Democrats in their thinking of how to run an education system, we probably have good reason to worry. Even traditional public schools in the US commonly contract with for-profit businesses for a wide-range of services, including curriculum development, textbooks, and instructional materials, as well as bus transportation and food service. Even instructional services provided by speech therapists, occupational therapists, and physical therapists are often contracted by public schools to private businesses. A lot of people are making money in an education system that spends more than $750 bill each year, most importantly teachers who take in more than $400 billion of that spending.

Neither the proposed legislation in the House nor the Chinese regulations prevent people from making profit on education. All these measures do is increase government control over those who make that money by forcing them out of for-profit structures that are less easily controlled by political authority.

One Response to China, Inspired by House Appropriations Bill, Cracks Down on For-Profit Education

  1. Greg Forster says:

    Your comparison is unfair . . . to the communists! From the quote you provide, it looks like the Beijing regime’s policy is much less strict than the US legislation. Beijing only requires the school itself (“companies and institutions that teach the school curriculum”) to be nonprofit. This implies they can purchase products and services from for-profit businesses all they like.

    The government school monopoly is so upset about for-profit companies making big bucks off education that they extract many of those big bucks from them by running a lucrative business selling exhibition space at big conferences for educators.

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