Reforming the Current Model of Private Investment in Chinese Education
20 Pages Posted: 11 Nov 2011 Last revised: 20 Dec 2011
Date Written: November 10, 2011
In this Article, the author proposes legal and regulatory changes to improve private investment in the Chinese education sector. State spending on education in China lags far behind the expenditures of developed economies, but the government has signaled its openness to private, non-governmental education and private capital investment in this sector. The current investment model for private education, however, suffers from laws and policies that are either non-existent or contradictory. The author discusses current policies that discourage and thwart private investment, including: the “not-for-profit” principle, the difficulty school sponsors have in realizing returns from their investments, and the ways that the current regulatory system forces investors to seek profits through investment structures that are illegal under current Chinese law. Finally, the author proposes changes to the current system that will encourage private investment and smooth the flow of capital from investors to the Chinese private education sector.
Keywords: China, Law, Education, Finance, Policy
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