Why China Is Cracking Down on After-School Tutoring

China’s private education companies had for years been the darlings of investors from New York to Shanghai, building a $100 billion industry on the promise of the world’s largest and arguably most-competitive schooling system. Then they got caught up in the Chinese government’s sweeping efforts to rein in the country’s technology giants, with a regulatory clampdown unveiled in July after months of rumbling that threatens to put an end to years of out-sized growth. The industry’s rise -- and future -- hinges on two of the most powerful and anxiety-inducing forces in China today: the pursuit of wealth and status, and the Communist Party’s enduring obsession with maintaining social order.

Blame it on the Gaokao: the national college admission test, administered in June, that decides which universities one can attend and thereby determining the fates of millions. It’s considered a playing-field leveler for those aspiring to move up the social ladder. Only 1.9% of nearly 11 million students who sat for the Gaokao in 2020 made it to a top-tier institution like Peking, Fudan or Tsinghua universities. Preparations begin many years before, in some cases as early as pre-school, as parents try to give their children every possible edge. Ironically, years of government entreaties to lessen the burden of homework may have driven anxious parents to private companies. After-school tutoring flourished, supplemented by online classes that in turn exploded during the Covid-19 pandemic. China’s market for private tutoring was expected to almost double to 1.17 trillion yuan ($183 billion) in 2023, from 619.1 billion yuan in 2019, according to Macquarie Research.