China is seen by many as an area of opportunity and investment, since joining the World Trade Organization (WTO) in 2001 investors all over the world have found opportunities investing in manufacturing, commodities, infrastructure and more recently, consumption and technology. An area of opportunity remaining is in education.
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As one of the largest contributors to the global economy with a rapidly growing middle class and deregulation surrounding private education, China has presented yet another opportunity for investors.
In 2016, the Standing Committee of the People’s Congress passed the Private Education Law, with the purpose of deregulating the educational services market, allowing for organisations and individuals to operate for-profit education institutions. Since its passing, the private education industry has flourished with foreign capital driving this growth. For-profit private education institutions have been allowed to register with the Administration for Industry and Commerce as a legal person creating the opportunity for investment into a market with significant growth potential.
Growing youth population
One of the drivers of this growth is due to the anticipated increase in the Chinese youth population over the next 13 years. Facing the threat of an ageing population, China overturned its one-child policy in favour of a two-child policy in 2015. This decision is likely to send China into a mini baby boom and it is estimated to result in 19 million new births per year. Analysts at China Renaissance have suggested that this will lead to a growth in the total population of children between the ages of 3-18 from 225 million in 2016 to 257 million in 2030. Concurrently the Chinese education market will grow in phases with the new wave of youth.
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