China’s private education operators eye Greater Bay Area expansion, as economic hub attracts more talent and resources

01-Dec-2020 Intellasia | South China Morning Post | 6:02 AM Print This Post

Private school operators are rushing to expand in the Greater Bay Area, riding on an increasing demand for quality education as talent flows into the 11 cities in southern China’s Pearl River Delta that have been tapped by Beijing to become an integrated economic hub.

“As the Greater Bay Area economy grows, we foresee an ever stronger and more urgent demand for high-end education,” said Li Jiuchang, the chief operating officer and executive director of Hong Kong-listed Wisdom Education International Holdings. “If the region wants to attract talent, it has to be able to make their children stay, by offering great education services during the primary to high-school period.”

Wisdom Education is already the largest operator of private elementary, middle and high schools in the southern province of Guangdong. Nine of the 11 bay area cities are in the province. The company is planning to add more schools in each of the cities, as well as a foray into tertiary education.

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From kindergartens to colleges, private institutions have in recent years gained ground in China’s education system, which has long been dominated by public schools. The number of private institutions stood at 191,500 last year, making up more than a third of all such institutions in the country.

Unlike in the United Kingdom or the United States, the best schools in China measured by students’ scores and resources are traditionally government-funded. But the emergence of high-end private schools like the ones operated by Wisdom Education is drawing more parents willing to spend big bucks.

Four of Wisdom Education’s 12 schools are located in bay area cities such as Dongguan, Huizhou and Foshan. The company has plans to build schools in Zhongshan, Jiangmen, Guangzhou and Zhaoqing in the coming years, and aims to cover all nine cities, Li said.

The demand for quality education is especially strong in bay area cities, which account for more than a tenth of China’s economy and have been attracting population inflows. Guangzhou and Shenzhen, for example, each added more than two million residents over the past five years.

There is also a shortage in the region, according to Hong Kong-listed China Education Group Holdings, which runs universities and vocational colleges in China, Australia and the UK. The gross enrolment ratio of tertiary education in Guangdong province, at 46 per cent last year, falls short of the national average of 52 per cent.

“This is a great market. The Guangdong education authorities have welcomed us setting up schools and expanding enrolment there, because they know the supply of higher education is far from enough,” Angelina Guo, investor relations director at China Education, said last week. The local governments were also supportive in selling land to the company, she added.

China Education, which already runs four institutions in the region, will more than triple student enrolments to 26,000 at its Guangdong Baiyun University after expansion in the future, according to company officials. It also plans to build a university in Zhaoqing to host 30,000 students.

The shortage of quality institutions allowed Wisdom Education to raise tuition and boarding fees by 20 per cent for new students this year. It forecasts another 20 per cent increase in two years, according to Li.

The company’s schools, on average, charged students 21,499 yuan (US$3,266) for tuition and boarding. By comparison, public schools are virtually free. Parents were willing to pay for classes and extracurricular activities that accommodate students’ diverse needs better than public schools’ standard programmes, Li said. For example, its schools have partnered with national basketball team players to train pupils, five of whom eventually ended up being selected for the 24-strong national team.


Category: China

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