Effect of the Dual Alleviation Policy on Edtech in China

The release on July 24th 2021 of the “Opinions on Further Easing the Burden of Homework and Off-campus Training on Students in Compulsory Education Stage“, also known as the Dual Alleviation Policy, by China’s General Office of State Council and the General Office of the Communist Party of China Central Committee has created shock waves in the Chinese education industry. The purpose of this article is to clarify the purpose of this policy and outline its likely effects on edtech in China.

The primary purpose of the Dual Alleviation Policy is to alleviate the burden of excessive homework and after-school classes upon Chinese children and their families. In particular, the Chinese government is concerned about the costs that these after-school classes impose on Chinese families and the resultant negative effect on social mobility, wealth inequality, and birth rates. The general trend is a renewed focus on the state-provided education system and away from private, for-profit after school classes.

The key effect of the Dual Alleviation Policy is to limit the quantity of offline after-school classes that teach subjects that are already part of the curriculum in state-provided schools. Curriculum subjects include: ethics and law, history, geography, Chinese, mathematics, foreign languages (English, Japanese and Russian), and science (or biology, physics, chemistry). Non-curriculum subjects include: sports, culture and arts, and science and technology.

The policy also specifically bans:

• Foreign ownership of after-school training institutions (including through franchising, partnerships, and VIE structures)
• Online platforms using foreign teachers who are located outside of China (including platforms such as VIPKid)
• Platforms that promote unhealthy learning methods that affect students’ independent thinking (including software that enables students to take photos of homework questions and obtain answers online)

It is not yet clear whether this policy will have any effect on the vast majority of edtech platforms that do not employ foreign teachers outside of China and do not promote ‘unhealthy learning methods’ as highlighted above. Our view is that it’s likely that the government will continue to allow online learning for both adults and children, so long as the platforms being used are published and operated in full compliance with Chinese law. This of course makes it especially important for any international company currently operating in, or planning to enter, China to conduct a full compliance check, as provided for free by AppInChina.