After crackdowns, Beijing to issue licenses to resume after-school tutoring

After Beijing outlawed for-profit tutoring in compulsory K-9 subjects in July, a number of firms have either gone bankrupt or dramatically scaled back their operations. For companies willing to brave the regulations, the rules of the road are becoming clearer:

• Firms will have to obtain a license and create a separate non-profit to restart classes. The government plans to issue at least a dozen licenses, the Wall Street Journal reported.
• Gaotu Techedu and Yuanfudao have consulted with regulators in recent weeks about how they can resume their K-9 offerings, along with other tutoring companies.

However: Some firms seem to have decided the best way to remain in the government’s good graces is not to run an acceptable version of their previous business, but to dive headfirst into common prosperity.

• New Oriental Education founder Yu Minhong said on Sunday that his firm would shutter 1,500 training centers and give around 8,000 desks and chairs to rural public schools.
• New Oriental teachers will instead sell farm products on livestreams, Yu said, as the company’s K-9 services shut down by the end of the month.

The takeaway: Beijing knows that for now, it still needs tutoring companies to supplement the public education system. The latest announcement is aimed at preserving the educational benefits of their K-9 programs, while keeping the broader goal of combating inequality front and center.