China’s $110 billion off-campus education market is bracing for a “regulatory storm” following comments expressed by leaders during the ‘two sessions’, the country’s largest political gathering, according to a report.

The South China Morning Post, the English-language newspaper, reported that President Xi Jinping described the domestic market for K12 after-school tutoring services as a “social problem” in a meeting last week of the Chinese People’s Political Consultative Conference (CPPCC).

“It can’t be solved by the education authority alone, and all social aspects and related departments should make joint efforts to study and solve it,” Xi said in comments published by official media.

Although the ways in which regulations might be enhanced are unclear, Xi’s comments have spooked after-school tuition providers and their investors, prompting concerns that more red tape will be rolled out across a sector dominated by private institutions.

The share prices of TAL Education Group and New Oriental Education & Tech Group, China’s largest after-school tuition providers, have trended downwards since Xi’s comments were made public on 12 March.

The message from the National People’s Congress (NPC), China’s top legislature, indicated that off-campus training services are “chaotic” and create problems for the country’s education sector, the South China Morning Post reported.

A move by Beijing to tighten its grip on the after-school tuition market could jam a stick in the spokes of plans by big Chinese tech companies to expand their presence in the education sector. Tech unicorn ByteDance, which owns social media giant TikTok, recently announced plans to recruit 13,000 new employees for its burgeoning Dali education unit.

Date published: 24 March 2021

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