Chinese mountain

Working with a partner in China

China hand, Mark Schaub looks at the educational scene in China, suggesting that the opportunity it presents to overseas schools and universities is real – but that it requires careful planning. 

学如登山。

Studying is like climbing a mountain.

Chinese proverb

The opportunity

China inspires superlatives. USD 4.24 trillion in retail sales. In 2015 it became the world’s largest consumer market. China has over 1.34 billion people and comprises some 20% of the world’s population. These are consumers who are eager for Western products and services … and few services are more in demand in China than education.

China represents an incredible opportunity for UK education institutes, enterprises and schools – a massive and growing middle class; mobile students eager to travel the world; middle class parents planning to send their offspring overseas for university; a strong cultural importance placed on education; industries full of workers needing vocational training in order to stay competitive; being at the forefront of online learning and big data.

There has been a major increase in the amount of capital being invested into the Chinese education sector. Recent years have seen dramatic increases in the number of M&A deals and education related IPOs.

Education is also a hot sector for non-education players seeking to transform themselves. This ranges from internet giants (such as Alibaba and Tencent) to real estate developers. Another impetus has been China’s internet and mobile revolution which has increased the influence and relevance of online education.

 

What will succeed?

Despite the opportunity, China is by no means an easy market. The education sector is sensitive and tightly regulated. Different cultural norms may mean that Western entities need to tread more lightly in the classroom than they do in their home countries.

Expectations can also be different – Chinese parents say they want their children to have an international education in China but is this true in practice? How can Western education entities remain true to their own ideals and heritage while still operating within China? Cracking the China market can have complex demands and requires the nurturing of long-term relationships and partnerships.

In our experience, Western education companies that are successful in China or with China have:

1) understanding and respecting the legal and practical restrictions within China;

2) developed good relationships with the PRC authorities and stakeholders;

3) found the right partners;

4) are actively engaged in the implementation of their project.

What do parents really want?

It is difficult to overstate the opportunity China presents for UK education. There is no higher priority for Chinese parents and their children. Increasing numbers of parents wish to shield their children from the intense pressure of exams and trying to secure a place in an elite Chinese university. For these parents, top universities in the West are often a “back up school” for their children.

Everything should be made as simple as possible, but not simpler

Albert Einstein

For these parents affording their children the opportunity to have English proficiency and exposure to the West is critical. Thanks to the burgeoning growth in the Chinese middle classes there are increasing numbers of Chinese students to be taught both in and outside of China.

Although commentators believe that China’s demographics will likely pause in 20 years people will still be saying a 100 years from now – “China has a lot of people”. Further the opportunities are not limited to Shanghai and Beijing – China has over 150 cities with population of over one million. Second and even third tier markets will be fertile markets for Western education.

Moving on to the mountain

The opportunity is clear but how will UK education respond?

China is not as mysterious as it is often made out to be. Success is not limited to a few players but is increasingly widespread. In most cases hardship can be avoided by taking the following steps:

  • Know what the legal restrictions are
  • Have a clear plan as to what you wish to achieve
  • Find the right partner
  • Keep abreast of political or regulatory changes and consider what impact they may have on your business
  • Set realistic expectations
  • Register your brand in English and Chinese
  • Plan the implementation
  • Keep involved

None of the above would be likely to be considered particularly surprising. However, it is surprising how often Western education entities fail to take such common-sense steps. We should take a cue from Einstein’s insight:  keep things simple but do not over-simplify. And then? If you decide this is the right thing for you, move on to the mountain, having done your homework.

 

Mark Schaub

China veteran and lawyer Mark Schaub has advised on foreign investment projects in all major sectors in China with a cumulative value exceeding USD 20 billion. He is familiar with China issues faced by companies and education institutions of all sizes. Mark is also global co-head of our consumer practice. Mark speaks English, German, and Mandarin.

King and Wood Mallesons offer a variety of legal services to UK schools in the process of finding and working with an educational partner in China.

 

International Partner, King & Wood Mallesons

London/Shanghai

T +44 2075501564

mark.schaub@eu.kwm.com

 

Feature Image: specialproject – Pixabay

Other Images: DesignNPrint, 0TheFool, Mengyan198 – Pixabay