In 1993, Zhang Jieting invested more than 100 million yuan ($15.87 million) to establish the Beijing 21st Century Experimental School, when private schools were still a rarity in China. Over the past two decades, he has expanded his business into a group of 30 schools, including one primary school, one middle school, one college and 27 kindergartens.
　　Despite this growth, Zhang said that he had to continuously overcome hurdles placed in his way by suspicious officials. In fact, Zhang feels the scope for further development of private education has recently become diminished.
　　For example, Zhang said that there is a gap in government subsidies between public schools and private ones, which makes fair competition impossible. “Current educational policies are limiting, not encouraging, the development of private education,” he said.
　　Zhang, a member of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC), China’s top advisory body, suggests the government should revamp its policy in a way that allows better support for private schools.
　　At this year’s full sessions of the CPPCC National Committee and the National People’s Congress (NPC), China’s top legislature, in March, Zhang’s call was echoed by many CPPCC National Committee members and NPC deputies.
　　“The overall importance of and role played by private education are frequently misunderstood. Many people believe private schools are solely for-profit institutions, said Gu Yeli, Vice President of Guangdong University of Foreign Studies. “Such misconceptions have led to more controls and less support for private schools in policy-making.”
　　According to Gu, the priority in terms of reviving private schools should be placed on freeing them from public institutions and allowing them more flexible policies concerning financing.
　　


　　 Making policies clear
　　 Since 2003, when the Law on the Promotion of Private Education, which granted equal legal status to privately funded and public education institutions in China, came into effect, private education has become the fastestgrowing and most dynamic segment of the country’s education system.
　　According to figures released by the Ministry of Education, more than 120,000 private educa- tion institutions had been set up in China by the end of 2010, with 33.9 million registered students. The courses provided by these private education institutions included pre-school, primary, secondary and higher education plus vocational and technical training.
　　More encouragingly, the overall education and training spending in China has grown at an estimated compound annual growth rate of at least 20 percent since 2008. By 2013, total annual educational spending is projected to increase to 4.1 trillion yuan ($650 billion), of which more than 78 percent, or 3.2 trillion yuan ($507 billion), is expected to be spent on private education, as opposed to public education.
　　In 2010, the Chinese Government published the National Outline for Medium- and Long-term Education Reform and Development (2010-20), pledging to explore the category management of for-profit and non-profit private schools.
　　However, the Education Law, which was enacted 16 years ago, and the Law on the Promotion of Private Education, which went into force eight years ago, do not recognize the category of “for profit” in private education. Article 25 of the Education Law states,“Any organization or individual may not establish schools or other educational institutions for the purpose of making profit.”
　　The extent to which investors are able to profit from private schools has also not been clearly defined by law. The Law on Promotion of Private Education, for example, states that after deducting costs, reserving development funds and drawing other necessary expenses in accordance with relevant state regulations, the financers of a private school may obtain a “reasonable” amount of requital from the cash surplus of the school.
　　“It’s time to amend those outdated stipulations,” Zhang said.
　　In order to solve these conflicts, the Ministry of Education is mulling a support policy for private education, according to people with knowledge of the matter.
　　Current educational policies have been blamed for preventing top teachers from joining private schools. For example, those who work in private education institutions are not eligible for the same benefits, such as insurance, as teachers who work in public schools.
　　In 2009, teachers at two private foreignlanguage schools in Chengdu in southwest China’s Sichuan Province went on strike, in protest of their low pay and welfare.
　　Wang Yufen, an NPC deputy and President of Shanghai-based Xiangyu Education Group, said that discriminatory policies against private education should be eliminated as soon as possible. “Teachers at private schools should enjoy the same social protection and rights as those at public schools,” she said.
　　According to Zhong Binglin, a CPPCC National Committee member and President of Beijing Normal University, making clear the distinction between for-profit and non-profit private schools and formulating legislation governing registration, taxes and accounting, will lay a basis that allows the government to begin providing financial support to these institutions.
　　Currently, private education institutions in China are divided into four categories—schools founded with donations, non-profit schools, for-profit schools and commercial training institutions. The Ministry of Education allegedly is devising different support policies for different categories of private school.
　　According to the China Economic Weekly, a Beijing-based journal, the former two categories of private education institutions will be registered as public schools and will then enjoy a series of favorable policies in taxation, land use and certification of teaching staff; the third category of institutions will be required to register as private nonenterprise institutions, and the last category of institutions will be registered as enterprises.
　　However, Zhang opposes this sort of category management. “If I had foreseen these policies, I would have avoided investing in private education,” Zhang said, calling for a transition policy to guarantee the fairness of categories and protect the rights of students, teachers and investors.
　　Citing anonymous people who are said to have participated in the deliberation of the Ministry of Education’s new support policy on private education, the China Economic Weekly said that the ministry proposed “the amount of reasonable return of investors of a private higher education institution should not exceed 30 percent of its cash surplus and should not exceed 5 percent of the year’s tuition fees.”
　　“The standard of 5 percent is too low when compared to public universities,” Zhang said. According to him, public universities can get at least 25 percent of annual tuition fees of their independent colleges on average.
　　“This standard will further reduce private investors’ interest in the education sector,”Zhang said.
　　 Looking to the future
　　 Given the inherent difficulty in formulating a comprehensive private education policy that is acceptable to all the industries’ stakeholders and also carries forward the government’s broader education objectives, Vice Minister of Education Liu Limin said in March that the ministry would actively study ways to tackle problems facing the development of China’s private education.
　　In his government work report to this year’s NPC full session, Premier Wen Jiabao pledged that the Chinese Government will encourage non-governmental investment in areas such as railways, public utilities, finance, energy, telecommunications, education, and medical care. “We will vigorously develop privately run schools and encourage and guide non-governmental investment in all types of schools at all levels,” he said.
　　“The pledge made by the government re-injected a confidence into private education investors,” said President Wang of the Xiangyu Education Group.
　　Also in the work report, Premier Wen said government spending on education would reach an all-time high proportion of 4 percent of the country’s GDP.
　　Meanwhile, according to Vice Minister Liu, a work conference on private education will be held in May. Till then, a series of policy documents will be established to further clarify the policies for the development of China’s private education.