China’s latest campaign to rein in its out-of-school education sector was meant to level the playing field for all. Instead, the crackdown is forcing tutors under the radar, making their services even more expensive — and exclusive.
A sweeping overhaul announced last month bans private companies from teaching the school syllabus during weekends and vacations and from making a profit, along with a laundry list of other restrictions. The $100 billion (¥10.9 trillion) education technology industry has been left reeling, with about $1.5 billion wiped off the combined market value of TAL Education Group, Gaotu Techedu Inc. and New Oriental Education & Technology Group Inc.
But the new rules also created a loophole, for now at least: private tutors and one-on-one lessons that the wealthiest families were already using to give their kids a head start. With the companies that provided group classes to middle-class families now decimated, regulations intended to redress the balance for students could end up skewing it further, as extra assistance becomes available only to the richest.