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The Marketization of China’s Education

China has a long history of valuing education. During imperial times, examinations were a meritorious path to civil service. These examinations favored rote learning of Confucian classics and produced an intellectual elite. In Maoist China, great strides were made in literacy and basic education. The emphasis was on political education over academic as it was better to be “red” than “expert.” Higher education followed a Soviet model that focused on technical studies over liberal arts. Later, the Cultural Revolution lead to the closing of many schools, persecution of teachers, and students being sent to the countryside to learn from the peasants.

In the 1980s, Deng Xiaoping’s policy of modernization and opening China to the world lead to dramatic reforms in education. The goal of education became serving China’s national modernization and an economy undergoing market reforms. Nine-year compulsory education was instituted in the 1986 Compulsory Education Act. By mid-90s, adult literacy stood at 74 percent. National college entrance exams once again opened the door to the nation’s universities. Students who passed the test were assigned to universities, guaranteed a free education and, following graduation, assigned jobs.

At the turn of the century, the buzzword for education is sushi jiaoyu or quality education. This means education that focuses on producing people with high morals, creativity, and critical thinking skills. However, a national debate about the efficacy of the Chinese educational system continues. Recent reforms have lead to the marketization of education in China making more educational options available at all levels, at least in the urban areas, but at a steep cost. This educational system continues to make lurching advances toward meeting the social and economic needs of an emerging global power.

Disparity and Under Funding

The Chinese educational system faces great challenges. Educational attainment and funding show widespread disparity with the average educational attainment in China today being 5.6 years. The rate of enrollment in higher education is below the average for Asian nations and low-income countries worldwide.

Per-pupil expenditures are disproportionately higher in rich provinces compared to those in poorer provinces. Urban children and those from wealthy provinces are much more likely to attend secondary school (about 2.2 times) compared to children from rural areas and low-income provinces.[1]

While differentiations in dropout rates between boys and girls are modest in primary school, they differ sharply in secondary schools. In rural areas more females drop out of secondary school than males. Excessive school fees have driven out many poorer students.[2]

Higher educational institutions capture only one fifth of secondary school graduates indicating that alternative methods of financing higher education, such as scholarships, student loans, and work-study programs, need to be further developed.

The condition of Chinese education in many remote regions and rural areas is deplorable and deteriorating further. According to the United Nations Educational Scientific and Cultural Organization (UNESCO), China ranks 145th out of 153 nations in per capita educational spending. Educational expenditures in China have remained at less than 2.4 percent of the GDP throughout the 1990s, one of the lowest rates in the world—lower than that of most developing nations and China’s neighboring Asian nations.[3] (By contrast, China’s military spending is 14 percent of its GDP.) In many areas, up to one third of educational funding comes from local or provincial sources while in numerous rural areas a smaller portion of the budget is allocated to education than mandated by the central government.

Universal nine-year education remains an elusive goal and up to one quarter of the Chinese population remains illiterate. The official primary school enrollment figures often do not take into account children of illegal migrant workers and additional children born to families in violation of the one-child policy. There is over funding of the higher grades while only two-fifths of expenditures goes to elementary and junior high levels. In some rural areas the actual per pupil expenditure is less than 10 yuan (US$1.20) per year.[4]

Rural parents are beginning to question whether schooling is a way out of poverty in modern China.[5] Even hard working students often have little hope of continuing past sixth grade as middle school fees skyrocket. In addition, there is inequality in Chinese education between the majority Han people and China’s ethnic minorities. The minority illiteracy rate is almost double that of the Han majority.[6]

To counter the continued erosion in public education, new initiatives, such as the China Youth Development Foundation’s Project Hope, have been established to raise much-needed funds for the improvement of educational conditions in China’s poorer areas. Project Hope has provided drop outs the opportunity to return to school, built 5,256 Hope elementary schools and conferred scholarships. Similar projects include New York based Support Education in Rural China (SERC) and Rural Education Assistance and Development (READ) both of which seek to improve school conditions in rural China.[7]

The Marketization of Education

China has been aggressively encouraging a diversity of educational options. The government is allowing the establishment of minban or people-run institutions and shehui liliang or institutions run by social forces that are adopting funding strategies that rely on multiple channels. Universities are setting up their own businesses including commissioned courses, adult education, and consultant services.[8] In the mid-90s, tuition was being charged for a special class of self-paying students who often did not have test scores high enough to enter the university the traditional way. By the year 2000, every student was being charged tuition and costs were increasing rapidly.[9]

China moved from a centralized and standardized curriculum to one in which the State Education Commission sets curriculum guidelines and institutions are then free to adapt it to the needs of the local economy. The college entrance exam is being replaced by provincial level and, in some cases, city level exams. Students now have a greater say in what schools they wish to attend and this has injected an element of competition into the educational system that had hitherto been non-existent.

Teacher Crisis

China faces a crisis in the teaching profession. Receding central government funding for education has lead to chronically low and, in many cases, unpaid salaries. A study conducted by the Educational Worker’s Trade Union in 2000, found that two-thirds of the teachers in 125 regions were owed $85 million in back pay.[10] The average annual income per capita for teachers is 2724 yuan or roughly US$330.

The Ministry of Education has reported that only 13 percent of primary school teachers had attained higher education qualifications at sub-degree level. Current normal school enrollments show a gender imbalance with some schools having as low as 12 percent enrollment of male students preparing for the teaching profession.[11] Efforts to increase the level of teacher training have often backfired. Many teachers who come from rural areas into cities for a year or two of additional training fail to return. A new teacher education curriculum is being tested in the fall of 2001 and the State Education Commission hopes that all new primary teachers by 2010 will be at least graduates of three-year teacher education programs.

Focus on Higher Education

Chinese leaders theorize that in order to modernize the country, China needs more highly trained party officials, business managers, and military officers. The quality of human resources will be important in determining China’s market competitiveness. Therefore, they have made decisions that favor the expansion of university education over that of basic lower grade education. This has led to decrees for increased enrollment and the building of new schools. In the fall of 2000, colleges and universities were told to enroll 20-30 percent more freshmen. Private universities are opening, as are branch campuses of established institutions.

In 1993, the Chinese government reiterated its commitment to actively encourage and support individuals and social institutions to establish schools. In the mid-90s, the State Education Commission launched Project 221 whose purpose was to raise 100 key universities to world-class status.[12] By the year 2000, 211 Project 221 institutions had received a total investment of 15 billion yuan and now take up 72 percent of research funding, 54 percent of the value of research and instruction facilities and equipment, and 31 percent of library stock books.[13]

The remaining universities face severe cuts in central government funding. The State Education Commission repositioned itself to no longer run schools and direct curriculum but to set general policies and regulations and allow individual institutions more administrative autonomy. Many university presidents and leaders were unprepared for this shift in authority. Until then, they had largely been responsible for implementing central government instructions; suddenly they were responsible for governing the institution. The State Education Commission found itself providing additional training for university leaders while universities were forced to look for provincial and local funding sources and new partnerships with companies. They began running businesses and charging students tuition to continue operating while professors found outside jobs to make up for low pay. Often, the instructors spent more time at these jobs than in the classroom.

By the mid-1990s there were over 1200 private colleges.[14] About half of these were trade schools while the remainder were academic institutions. There are generally three types of private schools. The first type is funded and owned by private investors who run the school like a business. The second type is Chinese business firms or individuals in collaboration with overseas investors. These are joint venture schools oriented toward making a profit. The third type is owned and operated by Chinese enterprises or non-governmental departments, institutions or communities. Many schools have retired government officials or military men on their boards, which helps to overcome strict government regulations. Critics, however, contend that private schools contribute to social inequality and exacerbate regional differences and social stratification.


Education experts offer a host of recommendations for improving China’s educational system.[15] These include increasing student retention in primary and secondary schools, relocating schools, recruiting more teachers, and reforming curriculum.

Necessary funding reforms include eliminating tuition and fees and the introduction of vouchers and subsidies to remove obstacles to basic education. Teacher education and compensation need to be improved. Overall government support for education needs to be increased as well as more flexible regulations for private schools. Partnerships between businesses and academic communities need to be strengthened for education to be more responsive to the labor market. Scholarship programs need to be developed to foster the development of poor, but qualified, students.

In the new century, China’s educational system faces even more fundamental changes. There is an emerging market that creates educational services as commodities provided by competitive suppliers.

Government regulations now allow for more flexibility to establish various schools and universities. With the reduction of state subsidies, there are multiple channels of educational financing, most of which are coming directly from consumers, and this makes the educational institutions more responsive to the demands of the marketplace.

With school funding more directly related to student enrollment, the educational market will heighten competition and lead to efficiency and effectiveness. Parents who are willing to spend money on their children’s education have more choices for quality educational services. This reflects the changing values of China’s people as decentralization results in greater reliance on individuals and market forces. 


Beech, Hannah. “Lesson Unlearned.” Time Asia Online 155 (10) March 13, 2000: www.time.com/time/asia/magazine/2000/0313/china.education.html

Bezlova, Antoaneta. “Education yet to make the grade in rural China.” Asia Times Online January 13, 2001: www.atimes.com/china/BA13Ado1.html

Boon, Say Teow. “Basic Education in the Rural Areas of China.” (SIAAPS): www.geo cities.com/Capitol Hill/ Senate/1630/articles/boon1.htm

Chan, David and Mok, Ka-Ho. “Education Reforms and Coping Strategies under the Tidal Wave of Marketisation: a comparative study of Hong Kong and the mainland.” Comparative Education 37 (1): 21-41 (2001).

China Education Daily, February 8, 2001.

China Education Daily, March 24, 2001.

Rong, Xue Lan and Shi, Tianjian. “Inequality in Chinese Education.” Journal of Contemporary China 10 (26): 107-124 (2001).

Wang, Chengzhi. “The Revival of Private Education in Reforming China.” Online paper at http://lrs.ed.uiuc.edustudents.cwang2/pepaper.html

Wenhui Daily March 1, 2001.

Zhili, Yin. “Project 211, Biggest Investiment in Higher Education in China.” People’s Daily Online at http:/English.peopledaily.com.cnl


  1. ^ Xue Lan Rong and Tianjian Shi, “Inequality in Chinese Education,” Journal of Contemporary China, 10 (26), 2001, p. 113.
  2. ^ Ibid. p. 113.
  3. ^ Ibid. p. 120.
  4. ^ Antoaneta Bezlova, “Education yet to make the grade in rural China,” Asia Times Online, January 13, 2001.
  5. ^ Hannah Beech, “Lesson Unlearned,” Time Asia Online, 155 (10), March 13, 2000.
  6. ^ Xue Lan Rong and Tianjian Shi, “Inequality in Chinese Education,” Journal of Contemporary China, 10 (26), 2001, p. 115.
  7. ^ Say Teow Boon, “Basic Education in the Rural Areas of China,” (SIAAPS) online paper.
  8. ^ Chengzhi Wang, “The Revival of Private Education in Reforming China,” online paper. 
  9. ^ Antoaneta Bezlova, “Education yet to make the grade in rural China,” Asia Times Online, January 13, 2001.
  10. ^ Hannah Beech, “Lesson Unlearned,” Time Asia Online, 155 (10), March 13, 2000.
  11. ^ Wenhui Daily, March 1, 2001. 
  12. ^ Yin Zhili, “Project 211, Biggest Investiment in Higher Education in China,” People’s Daily Online.
  13. ^ China Education Daily, February 8, 2001. 
  14. ^ Chengzhi Wang, “The Revival of Private Education in Reforming China,” online paper. 
  15. ^ David Chan and Ka-Ho Mok, “Education Reforms and Coping Strategies under the Tidal Wave of Marketisation: a comparative study of Hong Kong and the mainland,” Comparative Education, 37 (10), 2001, pp. 21-41. 
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Gary Waldron

Gary Waldron, PhD is the director of the Faith Leadership Initiative and has been involved in China service for 22 years. He may be contacted at gwaldron@faithleadership.net.View Full Bio