By Kang Yi (康怡)
Issue 584, Aug 27, 2012
News, page 6
Translated by Zhu Na
Original article: [Chinese]

"If the government gave you a school with the buildings built and facilities equipped, would you take it?"

Ma Zixiong (马自雄), chairman of Wuxi Golden Bridge Co. Ltd., faced this question three years ago when the Wuxi municipal government offered him a school. After working in the privately-owned education field for nearly a decade, he was a minor celebrity. The institutions his company covered included kindergartens, primary schools and training institutions.

But at that time, Ma rejected the offer. "We dare not run [the school]," he said. "I still had some concerns about privately-run education, even though our business had good development for nine years. But looking back on those nine years, we were walking on thin ice."

Since regulations on private schools had tightened, he worried the risk of starting a school would be too high; even if the facilities were given to him. He also worried that the government-donated facilities would bring along additional interference with his proven business model.

But now, three years later, the Ministry of Education is launching implementation guidelines to make it easier for private investors in the education sector.

Ma is still full of concerns though, as are many investors thinking of putting money into private education. The status of teachers working in private schools is one of these concerns; as are issues like poor financing channels and loans to private schools having higher interest rates than those to public schools.

Zeng Xiaodong (曾晓东) from the Institute of Education Economics at Beijing Normal University thinks that the investment direction for private capital will still focus on pre-school education, training classes and enterprise career training.

Currently, the average gross profit rate in pre-school education is 30 percent, and the rate in career training is 35 percent, according to Jiang Guohua (蒋国华), vice president of China Academy of Non-Government Education.

Ma reminds private investors to thoroughly assess the risks before investing in private education. "The pressure and the operation costs of private schools aren't the same as they were before," he said.

"The previous private school advantages in educational methods, teaching environment and facilities have gradually disappeared in recent years with the increased investment in public schools."