Beijing Mandates Tutoring Schools to Go Non-Profit By Year-End

Beijing Mandates Tutoring Schools to Go Non-Profit By Year-End

BEIJING, September 15 (TMTPOST) — Beijing Municipal Education Commission and several other local authorities have mandated tutoring organizations in Beijing to register as non-profit organizations by the year-end of 2021. For-profit tutoring organizations will then no longer be permitted to organize and profit from courses on school subjects, according to the official notice released by the authorities.

According to the notice, both online and offline tutoring organizations that focus on basic education subjects can apply to transition to non-profit organizations if they are qualified and are legally registered.

Only organizations with required licenses and permits and are in compliance with the authority’s policy to reduce student pressure will be considered qualified organizations. It is worth noting that whether the pre-paid tuition fee has been monitored by the authority is also a major compliance factor.

The non-profit organization transition shall be completed by the year-end of 2021, the notice said. Failure to comply with the new regulation will result in the termination of business qualification for providing school subject tutoring service.

China has been rolling out new regulations to clamp down on a booming private tutoring industry in the country since 2021, aiming to reduce pressure on school children and boost the country's birth rate by lowering family living costs, Reuters reported, quoting sources.

The crackdown on the private tutoring sector had sent the share price of Chinese tutoring companies falling sharply. For instance, Chinese education giant New Oriental Group experienced a record-breaking share price slump on the stock market when the crackdown started. Thousands of tutors and instructors had lost their jobs, while many companies that focus on school subjects have gone out of business under the crackdown.

Tutoring companies such as New Oriental and NetEase Youdao are now working to diversify their business and expand their continuing education business to mitigate the impact of the regulatory moves.