Chinese Communism Takes on the Tutoring Industry
The first tutoring I remember was Kumon, the Japanese company. My parents would take me to a basement storefront in a strip mall and the tutors gave me timed worksheets to practice multiplication and long division. Then in high school I had a chemistry tutor since I was in an advanced placement (AP) course and was failing every test. And I had a private SAT tutor.
All of this private tutoring was outside the school district, run by private companies and individuals. We could afford it. The point was to get my grades and test scores up so I could get into a better college, have better job opportunities, etc, a classic story of social reproduction in 1990s American capitalism. It was an intense experience, a lot of stress and money involved.
Capitalism capitalizes on this drive to help students get a place in its structure. A "grey market" for tutoring develops. And the more emphasis an education system places on grades and scores, the more intense that market gets, and thus the stress, anxiety, and expenditure increase.
Involution
This is exponentially true in China, where 92% of parents enroll students in outside tutoring, many of those spending 20-30% of their income on it. From what articles describe, this is a whole other thing than what I experienced. Their national standardized college entrance exam, the infamous gaokao, can only be taken once and determines a student's ability to attend certain colleges, and study certain subjects. One story talks about a second grader staying up till midnight to get their math homework done. In this crucible of fear and social reproduction, whole firms engage in financial speculation on this private tutoring market, worth $150 billion.
The Chinese have a pretty badass word for this whole situation: "neijuan," or involution, which literally means "inside rolling," a process of "incessant competition from which no one benefits. Chinese parents feel intense pressure to provide the best resources to their children, who in turn must work extra hard to keep up in an educational rat race."
The Chinese government made some waves recently by clamping down on the rat race. The official line is that they want parents stressing and spending less, they want students to have more free time for exercise and leisure, and they want capital to exploit the inside rolling less--particularly foreign capital.
Decommodify the tutoring!
This particular policy change, which is essentially an attempt to decommodify a part of education, is also kind of badass. They put new rules in place that "restrict both tutoring services and the profits they generate."
They limit online lessons to 30-minute sessions; impose a tutoring curfew of 9 p.m; and prohibit instruction during weekends, holidays and school breaks. Companies that offer private instruction in core subjects will have to register as nonprofits and will no longer be able to raise investment capital through IPOs or advertise their programs.
Xinhua said President Xi Jinping wants to “unfetter” young pupils from the burden of homework and exams and give them more time to play and work out, largely at the expense of huge private firms that capitalize on kids not playing and not working out.
This choice is consistent with the idea that CCP members are largely middle class, but not yet capitalist ruling class. They're more professional-managerial types, like Michael Roberts finds in an analysis of the party's composition.
Indeed, other coverage agrees with Roberts that this policy is a response to inequalities between working, middle, and ruling class people in the country:
The quality and resource of education varies greatly between urban and rural areas, from province to province, and between top- and lower-tier cities. There are few university places relative to the number of students and even fewer at prestigious universities, which are concentrated on the east coast and in major cities.
How did this policy decision work in terms of the Chinese state apparatuses? Basically, the regulations were issued by the Chinese State Council and the Communist Party’s Central Committee through the release of a policy paper. The issue was on the agenda of the yearly policy summit organized by the Party, called the "Two Sessions." According to Dan Wang in an excellent Odd Lots podcast episode (always listen to that podcast, btw), the Chinese government is responding to parents as a result of mass surveys completed in the last two years, which he characterizes a quasi-democratic mechanism to determine peoples' issues with policy.
And capitalists just have to deal with it. There's a compellingly morbid quote from a Shangai venture capital person, who said, when it comes to the prvate tutoring markets, "We are all waiting for death.”
Death indeed. The regulations made a pretty big impact, inspirings big sell-offs and headlines like: "Shares of tutoring giant New Oriental Education & Technology Group Inc.'s New York-listed stock dropped 30% in March, and shares of its rival TAL Education Group, the parent of industry pioneer Xueersi, declined 24%."
Will this work?
Efficacy is another story. Many doubt that the policy can do what leadership thinks it'll do. As Foreign Policy writes, "the question is whether the same market will emerge for private tutoring for the middle classes—driving up the necessary cost to stay in the race rather than reducing it." They mention South Korea as a precedent:
The dictator Chun Doo-hwan banned private teaching in 1980, but by the time the sector was relegalized in 1991, it was bigger than ever. A second South Korean attempt to crack down on high-cost private education, started in 2011, has had only limited success.
Right. There are already headlines about the grey market going black, prices going up, and demand staying the same if not increasing due to the regulations.
Return to communism?
I don't have a position on China generally one way or the other. I certainly don't think we should see it as a totally authoritarian state, just as we shouldn't see the US as a bastion of freedom and liberty. Just thinking about this policy, when I first read about it I thought it was pretty cool. When's the last time my government stood up to finance capitalists and took an entire industry out of the commodity cesspit? Our federal government just took weeks to eventually agree on how not to spend money on an infrastructure bill that would help school water systems. The PA state government refused to spend billions of dollars the federal government provided it. So whereas the US Capitalist Party (with its Republican and Democratic subcommittees) puts capital before people, the Chinese Communist Party is doing the opposite: they're doing something that could actually make a material difference in the situation.
Branko Milanovic puts this in context, saying that it makes sense for China's particular form of "political capitalism" to do this:
China wants to be different. In a society of political capitalism...the state tries to maintain its autonomy. In the United States, the state acts as a custodian of the capitalist interest “managing the common affairs of the bourgeoisie.” In political capitalism, though, the state must not allow to co-opt or to be “contaminated” by capitalist interest. In other words, capitalist interest is one of the interests to consider—but not the only one, or even perhaps not the chief one.
So Milanovic says this isn't a return to communism, like some are saying, but rather the decision to regulate private tutoring is historically consistent with Chinese political economy. He even says the long-term plan there is to let capitalists have their fun for awhile (maybe even 100 years) until the country is built up enough to fully be owned and run by the people. Sounds okay, right?
Michael Roberts is a bit more cynical in a piece on the general policy approach here, which he characterizes as the Chinese government responding to pressures from its population exacerbated by the pandemic. Instead of becoming basically the same as any finance capital hegemon (which they were headed towards), they changed course to try and move the "three mountains": education, health, and housing with policy initiatives and keep face.
Wang, again from Odd Lots, has a similar interpretation: the Chinese government wants to move their economy to more complex technologies, like producing semiconductors and airplanes. One way to do that is clamp down on industries where graduates of their education system might want to be employed, thus reallocating their human capital towards the industries they want to develop. Relatedly, he says that China is trying to counter-balance the social-political power that accrues to tech, housing, and education companies, creating a competition between the state and the firms.
Whichever is true, I appreciate the approach here. Rather than letting a huge industry eat kids and parents alive by enabling the fear, anxiety, and spending of a competitive schooling rat race, the Chinese government is stepping in and saying hold on a second.