Two Sessions 全国两会

Here is an explainer of the Two Sessions.

With 2,987 representatives of the popular masses, The Two Sessions is the largest parliamentary body on Earth. It meets for two weeks in March and, essentially, turns the party’s wishes into law.

Yes, it’s a rubber-stamp.

But

how, if it elects the state leadership? The president, chair of the Central Military Commission, chief justice, etc. are all elected by the NPC’s delegates, and even the premier, appointed by the president, has to be confirmed by them. The truth is, though, by the time they vote the party has already decided all of these outcomes.

Xi, for example, was elected in 2013 with 2,952 votes for, one against and three abstentions.

Yet, to be fair, in recent years there has been increasingly more room for policy debate and some form of vitality in this body, but it still exerts little real influence on legislation. Factionalism does exist, but it is confined to the party, in what is called “intra-party democracy.”

Yesterday Li Guangyu, the founder of a 29-school chain called Yuhua Education – from kindergartens to colleges — addressed the Two Sessions to argue against Article 12. It limits private schools in various ways.

In China are almost all private schools are for-profit, whereas in USA it’s the opposite, with private schools operating as non-profits. (Though as I’ve explained to some Chinese friends, leaders of the fanciest New York City private schools sometimes earn close to $1 million per year salaries, perhaps blurring the line a bit). Grades 10-12 are less regulated, but in Grades 1-9, lots of for-profit activity is now forbidden.

(That draft law), along with a ban on kindergartens raising funds in capital markets announced a few months later, has pushed Chinese education stocks off a cliff, as investors panicked over the prospect of stunted growth under the tightened regulation.

Beijing has not explained the reasoning behind the clause but it may stem from concerns that fast-expanding schools are putting profit before teaching, according to a report by Guosen Securities released in August. Companies could also take on too much debt to acquire schools and compromise the teaching quality, which would lead to social unrest.

In the USA, most for-profit operators focus on university level, and nursery school. Sounds like similar path for Li…

Yuhua Education, which operates all types of school from kindergartens to colleges, will focus more on tertiary education in the future, according to Li.

“We did start out by doing middle and high school education, but now over two-thirds of our student population, revenue and profit come from the higher education segment,” he said.

“We will continue to perfect our kindergarten, primary and middle school segments, but our priority in development and acquisition is higher education.”

On one hand, Chinese officials want major change in the day-to-day student experience in primary and secondary education. But so far it’s been very hard to “Decree” these sorts of changes.

On the other hand, they are limiting private schools, perhaps concluding whatever upside lies in innovation there is not worth the downside.

Hmmmm…could charter schools in China be a way forward? Innovation that’s halfway between…new schools by educators rather than investors, with government subsidy but freedom from traditional rules around teacher licensing, curriculum, etc.