There is clearly a demand for English-based and Western-style education in China. An ever increasing number of expatriates choosing to live with their families in China and wealthy Chinese seeking to prepare their children to attend elite universities abroad have combined to create clear demand for suitable schools. Our firm often receives requests to assist individuals and organizations seeking to establish private schools to meet this demand. In this four part series, I will be explaining what goes into starting such a school in China.

In most of these cases, the foreign party seeking to establish a school has been encouraged to do so by local governments and/or property developers. Local governments want a “famous brand” school to give face to their ambitious development initiatives. Property developers want a prestigious school to add value to their new developments, bringing in the deep-pocketed Chinese buyers so valuable in an over-supplied residential market. With strong local support that most foreign investors can only dream about, it would seem that establishing a private school in China should be a piece of cake.

Starting a private school in China is actually very difficult even under the best circumstances and time and again, our clients and the local Chinese side misunderstand the laws involved in such businesses.

The first misunderstanding is often made by the foreign party (our client), who is either not aware or does not fully understand that foreign investment in education in China is restricted — as per both MOFCOM’s list and Ministry of Education’s guidelines. In many Western societies, establishing a school is seen as a noble effort, a service to the greater community. In China (just as we mentioned previously about health care in Identifying Your China Risk Factors), education is viewed by China’s citizens to be the responsibility of the government. The Chinese government though views at least some aspects of Western education as a threat to the educational content it wants its citizens to receive.

The second, similar misunderstanding involves the local Chinese party who is encouraging the Western party to establish a new private school. Because establishing certain types of private schools are rare for large swaths of China – especially those under foreign control – most local and provincial Education Bureaus have no procedures or clear understanding of how to go about setting up such a school. On more than one occasion, our China lawyers have had to teach local Education Bureaus about the laws their own Ministry of Education has published.

These core misunderstandings often result in a costly comedy of errors on both parties and it is not uncommon for the Western party to come to us after having squandered a not-so-insignificant amount of money and having frayed once strong relationships.

When it comes to establishing an alternative to Chinese public schools, the Ministry of Education has published clear guidelines, allowing for three types of schools:

  1. School for the Children of Foreign Workers 外籍人员子女学校
  2. Sino-Foreign Cooperative School 中外合作办学
  3. Private School 民办学校

In our next post I will discuss these three main types of private schools that can be established in China. I will then examine the various levels of foreign involvement and control possible for each type of school and discuss what it takes to establish international schools in China.