The Crackdown

From Bloomberg:

China unveiled a sweeping overhaul of its $100 billion education tech sector, banning companies that teach the school curriculum from making profits, raising capital or going public.

Stock prices plunged yesterday in anticipation. TAL went from market cap of $20 billion to $6 billion.

Beijing on Saturday published a plethora of regulations that together threaten to up-end the sector and jeopardize billions of dollars in foreign investment. Companies that teach school subjects can no longer accept overseas investment, which could include capital from the offshore registered entities of Chinese firms, according to a notice released by the State Council. Those now in violation of that rule must take steps to rectify the situation, the country’s most powerful administrative authority said, without elaborating.

In addition, listed firms will no longer be allowed to raise capital via stock markets to invest in businesses that teach classroom subjects. Outright acquisitions are forbidden. And all vacation and weekend tutoring related to the school syllabus is now off-limits.

The regulations threaten to obliterate the outsized growth that made stock market darlings of TAL Education Group, New Oriental Education & Technology Group and Gaotu Techedu Inc. They could also put the market largely out of reach of global investors.

It’s part of a larger story. Two actually.

The regulatory assault mirrors Beijing’s broader campaign against the growing heft of Chinese internet companies from Didi Global Inc. to Alibaba Group Holding Ltd. It stems from a deeper backlash against the industry, as excessive tutoring torments youths, burdens parents with excessive fees and exacerbates inequalities in society.

The out-of-school education industry has been “severely hijacked by capital,” according to a separate article posted on the site of the Ministry of Education. “That broke the nature of education as welfare.”

Among other things, they also ban the teaching of foreign curriculums, tighten scrutiny over the import of textbooks and forbid the hiring of foreign teachers outside of China — a curb that could have severe consequences for startups like VIPKid that specialize in overseas tutors. The government also ordered local authorities to tighten approvals for companies providing training on extra-curriculum subjects.

It’s ultimately unclear how the government clampdown will turn out — many believe Beijing won’t seek to annihilate an industry that still plays an essential role in grooming its future workforce.

For now, many investors may choose to err on the side of caution. The government’s desire to assert control over the economy and one of its most valuable resources lies at the heart of recent regulatory clampdowns on online industries. Companies that operate as internet platforms have come increasingly under scrutiny because of the reams of data they collect, stirring government concern over issues of privacy and security.

Online tutoring agencies will also be forbidden from accepting pupils under the age of six. To make up for the shortfall, China will improve the quality of state-run online education services and make them free of charge, the State Council said.

I am skeptical that state-run tutoring will work well.

If general crackdown (on Ant, on Didi, etc) is one reason, what is the other?

Birth rate.

From the WSJ

China is planning new policies to rein in rising education costs seen as deterring couples from having more children, according to people familiar with the matter, as Beijing confronts a worsening demographic outlook.

Among the measures are new laws and tighter regulations aimed at private education companies that offer tutoring services, which have been blamed for fueling competition and increasing education costs for urban families. New restrictions would, for example, curb private lessons during school holidays, the people said.

Separately, Beijing policy makers are discussing measures to tamp down real estate frenzies that have sprung up in desirable school districts in China’s wealthy cities, adding educational anxieties to a housing market that many officials fear is overheated, according to two of the people.

Taken together, the policies are intended to blunt two trends seen as driving up the perceived cost of education for many Chinese families, which is in turn regarded as an obstacle discouraging couples from having more children.

I am skeptical that reduction in tutoring will increase birth rate.

Without cultural changes, I think lots of kids will just play more video games and watch tik tok.

That may be cheaper for parents, but I’m not sure it makes the act of parenting more enjoyable. Nobody likes to watch their kid just be on a screen all the time. That’s what Xie thinks too.

Xie Weina, a 41-year-old Beijing mother, spends roughly $1,500 each month for her 10-year-old son to attend two essay writing classes, three online and one offline English classes and one math class each week after school, as well as basketball and soccer on the weekends.

Ms. Xie said her son’s schedule can hardly compare with those of his classmates, whose parents are driven, she said, by “a herd mentality of fear and anxiety.”

She added that “parents in big Chinese cities are working for the educational centers.”

Though she thinks competition has gotten out of hand, Ms. Xie is wary of governmental efforts to ban private classes during school vacations, fearing that working parents like herself will instead wind up with unchaperoned children playing videogames all day.

A Smart Lamp That Monitors Kids’ Studying

From the Wall Street Journal:

What looks like a children’s desk lamp, behaves like Amazon.com Inc.’s Alexa and comes with two surveillance cameras? The latest educational fad in China.

“Smart homework lamps” have skyrocketed in popularity since ByteDance Inc., the creator of short video app TikTok, first introduced the $120 lamps in October. Chinese parents snapped up 10,000 units within the first month. The product’s popularity spurred ByteDance to ramp up marketing and its rivals to roll out their own versions, all while testing the Chinese public’s tolerance for more cameras.

The lamps come equipped with two built-in cameras—one facing the child and another offering a bird’s-eye view from above—letting parents remotely monitor their children when they study. There is a smartphone-sized screen attached to each lamp, which applies artificial intelligence to offer guidance on math problems and difficult words. And parents can hire a human proctor to digitally monitor their children as they study.

In addition to the basic version of the lamp, a $170 upgraded model sends alerts and photos to parents when their children slouch. That version of the lamp sold out on China’s largest e-commerce platforms earlier this month.

Ni Ying, a 36-year-old in Shanghai who bought the basic version of the lamp in March, paid an extra $350 for three teachers to remotely watch her daughter do homework each afternoon for two hours over the course of three months.

“It’s much more efficient: My daughter gets her work done and if she needs help, the teachers are there to assist,” said Ms. Ni, who said it was liberating not to have to constantly keep an eye on her 10-year-old daughter. “I’ve felt less agitated about her homework and the lamp has improved our relationship.”


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ByteDance’s success with its smart lamps offers insight into the Chinese public’s openness to technologies that promise a leg up in an increasingly competitive society. Surveillance, in particular, is reaching deeper into the daily lives of Chinese people than many in the West are comfortable with.

In recent years, Chinese schools have experimented with headbands that monitor children’s brain-wave activity and concentration levels, student uniforms with location-tracking capabilities and kindergarten robots that take attendance, teach and analyze student behavior.

Still, the ByteDance smart lamps and remote tutoring service “is the first time we’re seeing a mass market, education-related surveillance product making it into the homes and bedrooms of Chinese children,” said Ted Chen, a Beijing-based entrepreneur in education technology.

ByteDance said there had been many public misunderstandings about the lamp. For example, the remote monitoring can only be activated when both the parent and the child give permission.

In March, Chinese internet titan Tencent Holdings Ltd. said it would introduce a similar AI-powered homework lamp offering the same features as ByteDance’s product.

The arms race in China’s educational technology industry comes as the country’s tech giants, seeking new areas of growth amid a regulatory crackdown, eye opportunities to sell to increasingly affluent—and anxious—parents.

Wu Tong, a mother in the eastern city of Nanjing who bought the lamp for her 3-year-old daughter, said Chinese parents have always felt immense societal pressure over their children’s education. Now that they are wealthier, they are more able to spend on their children.

Ms. Wu, 30, said she never thought of surveillance when she purchased the lamp. Instead, she said she was drawn by its promise of a warm light that doesn’t cast shadows—good for her book-loving daughter’s eyes, she said.

On Chinese social media, where the device is touted as a relief for busy working parents, reviews are overwhelmingly positive—so much so that it is hard to distinguish between paid promoters and real customers.

ByteDance, whose popular short video app thrust it into the center of the U.S.-China geopolitical frictions last year, has also launched a major marketing push. In one ByteDance advertisement, a popular Chinese actress is shown happily monitoring her son’s studies while far away on a film shoot. Another marketing video depicts a Chinese migrant worker toiling at a construction site far from his family. In the advertisement, the worker’s daughter uses the surveillance lamp to teach her father the English word for family.

The company has said it developed its smart lamp over months of consultation with about 2,000 Chinese parents and children.

“In Asia, parents are less obsessed about the idea of surveillance and parents often see parental oversight as a good thing,” said Sunsun Lim, a professor at the Singapore University of Technology and Design whose work focuses on technology and families.

A challenge for ByteDance, Tencent and other newer entrants is that Beijing’s regulatory attention is turning to education. In China’s wealthiest cities, authorities have begun clamping down on extracurricular programs, concerned about unequal opportunities for less affluent households. In late 2019, China’s Ministry of Education reprimanded schools’ use of third-party apps to collect students’ personal data.

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In March, some features on ByteDance’s lamp sparked a furor on Chinese social media. One user said the app allowed children to post videos of themselves on the internet. Another user complained that the lamp offered user profiles and videos of other children, often of the opposite gender, as online study buddies.

ByteDance said at the time that any uploading of videos required parental consent and would be limited to videos of homework. The company told the Journal that the lamp doesn’t recommend other users to children and its camera doesn’t have a “real-time supervision” feature.

Some Chinese media outlets and parents have also criticized the idea of placing an interactive touch screen in front of children as they study, warning that the lamp would make children accustomed to seeking easy answers from technology.

Sun Chang, a 41-year-old civil servant in Shanghai, has heard other parents discuss buying the ByteDance lamp. But Ms. Sun, whose son is in fifth grade, said she doesn’t like the idea of compromising her son’s privacy or encouraging her son to rely more on technology.

“Children have the right to privacy too, and it’s not something parents can just take away,” she said.

—Qianwei Zhang and Zhao Yueling contributed to this article.

Quick thoughts:

  1. Not sure “child is giving permission” in this context – more like parent gives permission twice.

2. Quite expensive as a reading lamp, so I’m skeptical of “I didn’t even know about the surveillance part” parent claim.

3. There is an interesting potential benefit, which for a diligent kid would be that instead of parent constantly checking on you, you are left alone.

4. Chinese gov’t continues to worry about kids studying too much. Very different from USA context.

RoundUp!

  1. Three young Chinese teachers tell their stories.
  2. Reddit thread on best schools in Shanghai.
  3. Sociological study of education access in Shanghai.
  4. Ministry of Ed still struggling to make Chinese schools less obsessed with academic outcomes, will try new round of inspections.
  5. Also regs to ban homework in elementary school.
  6. Also kids’ phones banned during school.
  7. Also corporal punishment banned.
  8. Also crackdown on private tutoring companies.

I think #6 and #7 may get traction. I’m skeptical about #4 and #5.

9. Uighur secretary of education gets suspended death sentence from Chinese officials for textbooks authorities didn’t like. Background here.

10. Expose of expensive alternative private schools in China.

Yet, for as promising as this sounds, nearly a year of research has shattered my original impression of alternative education as a potentially superior way to improve children’s lives.

Many of the parents and children I spoke with were not actively choosing alternative education. Rather, their kids had dropped out or were expelled from their original schools. And because alternative schools like the one mentioned above charge 100,000 yuan ($15,200) in yearly tuition, they are not affordable for the average income parent.Nearly a year of research has shattered my original impression of alternative education as a potentially superior way to improve children’s lives.

When I first visited the learning community I mentioned at the beginning of this piece, I was surprised to find that its students spent a significant amount of time playing video games. I never saw the principal or the tutors tell them to stop; sometimes they even joined in.

Harvard, Princeton Profs Fear Class Discussions About China

From Lucy Craymer at WSJ:

The effect of the new national-security law that China imposed on Hong Kong is extending far beyond the territory to American college campuses.

From Princeton:

“We cannot self-censor,” said Rory Truex, an assistant professor who teaches Chinese politics at Princeton. “If we, as a Chinese teaching community, out of fear stop teaching things like Tiananmen or Xinjiang or whatever sensitive topic the Chinese government doesn’t want us talking about, if we cave, then we’ve lost.”

His course will now come with a warning that some of the material might be sensitive and of concern to China’s government, and he said he was introducing blind grading. Students will hand in work bearing a code rather than their name, to prevent any student from being linked to particular views or arguments.

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