Open Journal of Social Sciences, 2014, 2, 88-97

Published Online October 2014 in SciRes. http://www.scirp.org/journal/jss

http://dx.doi.org/10.4236/jss.2014.210010

Research on the Effects, Problems and

Strategies of Comprehensive Reform Policy
of Private Education in China
Based on the Empirical Investigation and Analysis of 25 Schools
in City X
Huapeng Dai1,2*, Ting Li1, Yu Wen3
1

The Faculty of Education, Southwest University, Chongqing, China

Institute of Education Policy, Southwest University, Chongqing, China
3
School of International Studies, Zhejiang University, Hangzhou, China
*
Email: [email protected]
2

Received 21 August 2014; revised 7 October 2014; accepted 20 October 2014

Copyright 2014 by authors and Scientific Research Publishing Inc.
This work is licensed under the Creative Commons Attribution International License (CC BY).
http://creativecommons.org/licenses/by/4.0/

Abstract
While the comprehensive reform policies of private education have achieved remarkable results,
further reforms are needed to promote the better development of non-governmental education.
The research group carried out fieldwork in 25 schools in city X, where the policy implementation,
effects of implementation, existing problems and causes were all thoroughly analyzed. The results
show that classified management, teachers social insurance and government purchase services
have been properly implemented. However, limited school autonomy, inequality of payment between teachers of private and public schools, investment and financing difficulties, lack of financial support, and limited land share remain serious problems. Therefore, it is argued that the allocation distribution for public and private schools should be adjusted, the team dynamic of private school teachers should be further strengthened, and schools should be administered independently. It also requires broadening the investment and financing channels, adopting a system
of mixed ownership, and developing an innovative system to manage schools. The first step in this
process requires following the direction of optimizing the quality of private schools and achieving
equalization with public schools. Second, existing mechanisms should be enhanced to link government-, department-coordination, grassroots innovation and the participation of the public.
Third, according to the specific regional situation, resources should be allocated to promote the
formation of mutual development patterns for public and private education in China.
*

Corresponding author.

How to cite this paper: Dai, H.P., Li, T. and Wen, Y. (2014) Research on the Effects, Problems and Strategies of Comprehensive Reform Policy of Private Education in China. Open Journal of Social Sciences, 2, 88-97.
http://dx.doi.org/10.4236/jss.2014.210010

H. P. Dai et al.

Keywords
Private Education, Reform, System, Mechanism

1. Introduction
This study aims to fully investigate the implementation status and existing problems of the comprehensive
reform policy of private education in China, to provide the nation and local districts practical cases as reference
for new policy making and reforms of private education.
The development of Chinas private education is a result of the release of private space under the economic
structure transformation [1]. However, current public education resources cannot keep pace with demand from
Chinese society [2]. Moreover, limits on the amount of Chinas resources devoted to public education are having
the effect of promoting further expansion of private education [3]. The Outline of National Medium-and
Long-Term Program for Education Reform and Development says that: More efforts on supporting private
education, making and bettering preferential policies that can promote private education, promoting trials of
reinforcing systems to run a school, and opening trials of classifying profit-making and non-profit-making private schools are needed. In 2010, Notice on Pilot Reform of Education System of the Country issued by the
general office of the State Council (Ref. No.48) also requires the improvement of the developmental environment of private education and deepening schooling system reform [4]. According to all the relevant studies, we
can find that this is mainly related to studies on the historical development of the overall reform policies of private education, the current problems, strategies and suggestions, and private educations reform trials in different areas [5]. Research on reform policy and mechanism of private education has been sufficiently conducted in
foreign countries [6], where private schools are mainly run through donations. But in China, private education is
mostly carried out through investment. On one hand, the experience in other countries of supporting private
education on donation does not seem to suit a system where private education depends on investment. On the
other hand, China is lacking the data on models of private educations reinforcement. Therefore, the study group
undertook local studies on private educations reform policies in order to describe the real situation of reform
over the past three years. The study group then analyzed the issues objectively and developed a summary of
typical experience with the reform process. Ultimately, it is anticipated that the results of the study will help the
government in developing and improving policies that will deepen the reforms and foster private education that
is balanced, popular, and fair.

2. Research Design
2.1. Research Methodology
2.1.1. Interview
Two interview outlines were developed, which were used separately in meetings with department directors and
with CEOs and principals. Recordings made during the meetings with the personnel from related departments
include comments on the publishing background information, implementation process, and the effect of the
comprehensive reform policy of private education in city X. Also, the main challenges and specific difficulties
with policy implementation were thoroughly analyzed. The research group visited 25 first-tier pilot schools in
county A and district B, interviewed the school CEOs, principals and teacher representatives. They verified collected questionnaire data and reviewed the schools three-year plans, and took note of different opinions and
suggestions.
2.1.2. Questionnaires
According to the situation of educational reform of 25 private schools in city X, two sets of questionnaires were
developed which are Questionnaire A and Questionnaire B for follow-up investigation on comprehensive
reform of private education in city X. Questionnaire A was distributed to the educational bureaus of counties
and districts in city X for investigation of the general situation of counties and the educational departments.
Questionnaire B was given to the 25 private schools for understanding the policy implementation over the past

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two years. Questionnaire A mainly includes the structure of teacher teams in the local private schools, financial
support to the private school teachers, investment in private education, and conditions of registration for social
insurance of private school teachers. Questionnaire B generally covers attributes of the legal status of pilot
schools, institutional development, school teachers mobility, fiscal support, school supplementary investment,
and fee scale.

2.2. Object of Study and Sampling

Taking into account the economic difference of different counties and districts, with overall consideration of the
representativeness of the sample districts and feasibility of the investigation and survey, city X and county B
were selected to conduct the survey. The research group chose different locations, diverse schooling stages
(kindergartens, primary and middle schools) and various posts (directors of different departments, school CEOs,
principals and teacher representatives) as survey targets and had informal discussions with them followed by
on-the-spot investigation at those schools. Samples include 19 schools in county A which consists of 13 kindergartens, six nine-year coherent schools, and six schools in district B which are two kindergartens and four middle schools.
2.2.1. Data of Regional Private School Teachers
The number of private school teachers in county A is 5306 (121 with permanent posts) in year 2010, and 7034
(257 with permanent posts) in 2013. In district B, the numbers are 781 (13) and 1077 (38). In both regions the
number of private school teachers, including those with permanent posts, has dramatically increased.
2.2.2. Data of Regional Private Schools and Students
County A has 217 private kindergartens and 18 private primary and middle schools with the at-school student
number 650,000. District B has 68 private kindergartens, 15 private full-time schools and 60 private training institutions. Further details are indicated in Table 1.

3. Results and Analysis

3.1. Remarkable Achievement
3.1.1. Developing Matching Solutions and Classified Management Implement
A misplaced legal entity status is the source problem that has caused difficulties in the development of private
education in China. This has resulted in private schools not having preferential policies for land use and taxes
that public schools have, but still having to pay relevant taxes as enterprises, which is an issue of inequality between the two systems. There are 59 private schools selected as pilot schools (taken in two turns) in county A,
among which, 52 schools are registered as legal institutions, while seven are registered as legal enterprises.
3.1.2. Enhanced Financial Support
The survey displays that in the past three years, there have been annually increases in fiscal support to the private schools from the government, which has solved the issue of low funding. Details of fiscal support are indicated in Figure 1.
3.1.3. A Gradual Rise of Education Project-Guided Investment
Of the schools in county A, one school has totally invested more than 50 million yuan in 2012 and has carried
forward 6 major investment projects with a total investment amount of 212.5 million yuan. The investment of
private education in the county increased to 627.44 million yuan since 2010. One school in district B financed 6
million yuan, which made a breakthrough of zero on the private education investment. Details of investment
are indicated in Figure 2.
3.1.4. Implementation of Preferential and Support Policies
The research shows that in terms of land use rights, the county government provided the Longgang Zhen Kangle
kindergarten and Dongcheng Kindergarten a schooling land of 12.5 acres by means of administrative allocation.
Last year, by land auction the new district got 25 acres of land for the construction of a private school.

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Table 1. Number of students at different schooling stages in private schools in district B in

2013.
Attending students

Registered students

Percentage

Private high schools

2021

6824

29.62%

Private 9-year compulsory schools

11,126

43,373

25.65%

Private kindergartens

11,829

14,562

81.23%

H. P. Dai et al.

fiscal support
(Unit: 10,000 Yuan)

(blue indicates County A; pink indicates District B)

Figure 1. Local fiscal support to private schools in County A and District B

in 2010-2013.
(Unit: 10,000 Yuan)

(blue indicates County A, purple indicates District B)

Figure 2. Investment of private schools in County A and District B in 20102013.

3.1.5. Gradual Growing Coverage of Social Insurance Policy

The survey indicates that in respect to implementing the new policy on social insurance, there are 661 private
school teachers in the county who registered for institutional social insurance. From 2010 to 2013, the number of
teachers who registered for social insurance in both of the two regions has increased on an annual basis. However, there are differences among the various schools. Details of registration are indicated in Figure 3.
3.1.6. Enhancing Teachers Team Dynamic
In 2010, county A implemented a policy that the standardized performance salary of private school teachers is
70 percent of what public schools teachers earn at the same level. In 2013, the salary was separately increased
by 1000 yuan according to different schooling stages. Currently there are 903 teachers contracted with personnel
agencies. In the past two years, 40 public school principals and head teachers, as well as more than 300 visiting
public school teachers, went to work or to teach in pilot schools. These private school teachers receive equal
treatment to public school teachers in terms of training and job evaluation. In total, 1135 teachers participated in
specific training and 3445 full-time preschool teachers and nursery governesses participated in the entire staff
training. Details of staffing are indicated in Figure 4.

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number of teachers with

institutional social insurance

pilot schools

Figure 3. Registration of social insurance of private schools teachers in 20102013 (district B).
Number of teachers
with posts

pilot schools

Figure 4. Post staffing of private school teachers at County A in 2010-2013.

3.2. Prominent Problems

Although the comprehensive reforms of Chinas private education system have made remarkable progress,
problems such as indefinite legal status and unclear property ownership rights have emerged in private education
management. Possible reasons could be the conception restriction, incomplete policies and regulations, and
overly restrictive institutional mechanisms. Such issues have correlated at various levels and collectively have
had significant impact.
3.2.1. Restricted Autonomy in Running Private Schools
The first issue relates to restrictions of financing autonomy. During the survey of department directors, school
CEOs and teachers in school visits, many schools indicated that the cost of teachers social insurance caused financial strain on the schools. As a result, schools want greater flexibility and autonomy on certain issues of financing to guarantee the efficient and sustainable school management. The second issue concerns the schools
limited autonomy in recruiting students. It covers two important aspects: cross-district student recruitment and
examination-based student recruitment. The research indicates that most schools in both districts are willing to
recruit students from other districts. Some schools indicated that if public schools can recruit students from other
districts, then private schools should also be permitted to do so. The autonomy issue is particularly prominent in
districts where schools are generally demanding certain autonomy in running schools because of the lack of
good students to recruit. However, it is understood that the government has concerns about some pre-school
students will be recruited into primary schools, and that those schools may charge more for the students, which
will worsen the inequity of education.
3.2.2. Inequality of Payment between Teachers of Private and Public Schools
The survey results indicated that private schools have a lack of permanent posts (official planned job vacancies)
available for fulltime teachers, which results in significant loss of teachers. The research shows that many
teachers chose to take recruitment tests for public school positions because there are no permanent posts in private schools. The teacher loss in private schools has therefore been a very serious problem. Some interviewees

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state that the loss of excellent teachers who were meticulously trained by private schools has had a huge impact
on teaching quality of the school, our students, and school administrators.
There is also no guarantee on the sustainable social insurance policy. Although the government has been increasing fiscal support from 2011 to 2013 for private schools to purchase social insurance for teachers, it is hard
to guarantee the persistence of the fiscal support. Besides, it remains difficult to solve problems such as social
insurance for foreign teachers, standards of price difference, and the modes of social insurance after the combination of institutional insurance and enterprise insurance. Details of teacher loss are indicated in Figure 5.
3.3.3. Delayed Fiscal Support and Weak Supporting Force
Some schools stated they have not received fiscal support from the local government. Although the government
has been increasing fiscal support, some schools indicated the government funding to purchase services is not
yet in place. For instance, one school in district B has not received the fiscal support for 2013. The standard of
fiscal support is undefined. It is difficult to meet the financial needs of the schools that lack funding when minimum supporting criteria were used. It appears that the government seldom approves the amount of fiscal support for schools operating as private schools.
3.3.4. Insufficient Land Quota and Restricted School Spatial Development
Most private school administrators indicated that the government assigned quota for land use is restricted which
strongly limited schools physical development. According to the local economy, the land quota that is distributed to county A and district B is limited. It is even harder for the school administrators to break through the
barriers of land quota. At the same time, related departments and institutions are lacking strong support and cooperation with private schools and often implement procedural restrictions.
3.3.5. Unclear School Property Right Ownership
According to Chinese law, private schools are registered as private non-enterprise legal entities. As non-profit
organizations, the properties should be continuously used for programs that support the public good. In this way,
the investment is equivalent to a donation. However, statistics from the investigation group of the Education,
Science, Culture and Public Health Committee of The National Peoples Congress indicates that more than 90
percent of private schools in China are run by investments. The ownership of school property rights is not clear,
and there is a lack of guarantee on the assets invested by contributors [7]. Moreover, when there is a change of
school administrators and/or a school is terminated by law, no specific approach is available to deal with school
properties, especially with the value-added parts of investment from the contributors.
3.3.6. Unreasonable Allocation Distribution for Public and Private Schools
There are allocation differences between public and private schools that create an unreasonable distribution. In
the rural and poor areas, which have few sources of students, the private schools are hard to develop, yet public
schools cannot guarantee the minimum requirement of education, leaving the students without an inclusive education. Meanwhile, public schools are competing with private schools for teachers and students in the districts or
areas where private schools have opportunities for development and marketability. This has made private
schools an even adverse living environment and has hindered their development. Private education covers very
few schooling stages of compulsory education (primary schools and middle schools) and high schools, which
has caused a vertical imbalance in schooling stages. In 2010, the whole province where city X is located had
8527 private schools, or 24.2 percent of the total schools. The number of private school teachers is 21.2 percent
of the total teachers in the province. Among all the private schools in this province, 65.4 percent are preschools,
32.7 percent are higher education, 19 percent are high schools, and only 10.7 percent are compulsory education.
Details of distribution in different school stages are indicated in Figure 6.
3.3.7. Indefinite Authority of School Administrators
The relationship between school runners/investors and school administrators are as capital and professional
managers, whose rights and responsibilities and practices may affect the quality of how the school is run. During
the survey, many private school personnel mentioned the issue of rights and responsibilities of school administrators. The main problems seem to include excessive authority of investors over the authority and autonomy of
administrators. It is difficult to achieve a balance between these two groups and this has led to an effect on the

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number of
lost teachers

pilot schools

Figure 5. Loss of teachers from pilot schools at District B in 2010-2013.

Number of private schools
at different school stages
1600

1458

1400
1200
1000
800
600
400
200
0

72

30

48

Figure 6. Distribution of different schooling stages in private schools in city X in 2012.

teaching in schools. This is not only a problem of individual conception but also a reflection of an imbalanced
institutional relationship.

4. Strategies and Suggestions

Based on the survey results and analysis of private education, three items should be clarified: the fundamental
aim of the reform policies; the effective approaches; and the key objectives. At the government level, it should
focus on the innovation of institutional mechanisms, the improvement of public policy for education, and the
optimization of the environment for the development of private education. At the school level, importance
should be placed on the innovation of quality and management, the establishment of a modern school system,
and the creation of diverse and resources for private education. At the societal level, it requires a focus on the
innovation of school management by a variety of forces, the introduction of the investment and financing mechanism, and broadening the space for the development of private education.

4.1. Adjust the Geographical Layout of Public and Private Schools and Realize High
Quality Private Education and Equalized Public Education
4.1.1. Public Aided Private Running in City and Public Aided Multi-School Running in Rural
Areas, and Adjusting the Layout of Urban and Rural Areas
Relying on its resource advantage, public schools can keep the minimum operation in rural areas and not compete in the market of private education. According to the urban and rural reality it should be a priority to synchronize the urban kindergarten establishment and residential development and construction, and freely transfer
the supporting kindergartens to the administrative department of education. Subsequently, the city would establish a kindergarten system of Public aided private running. This allows private actors to run the kindergartens
through a bidding mechanism. The practical advantages of the citys population, a large demand for student
enrolment, and a good economic foundation would actively encourage social forces to run the private kindergartens at high grade and large scale.
While in the countryside, a kindergarten mechanism of public aided multi-school running is recommended.

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According to the lower number of students, the geographic area covered, and changing flexibility in rural areas,
the kindergartens at the township center should mainly be publicly run by the government, and on this basis,
open up more channels for multiple ways for the kindergarten to be run. A unified layout and management are
required for both public and private owned kindergartens at village centers.
4.1.2. Set up More Private Middle Schools and High Schools and Adjust the Proportion inside
Private Schools
According to the research results, there is a large proportion of private kindergartens and private primary schools
in city X, but private middle schools and high schools are at a much smaller proportion. In view of the differences in proportion of different educational stages in private schools, an ideal approach would be more public
schools and stronger private schools at the pre-school stage, fewer public schools and more private schools at the
stage of compulsory education, and stronger public schools and transferred private schools at high school stage.

4.2. Complete Fiscal Support Policy [8] and Improve Public Finance System
Limited by economic and social development, current private education in China has not yet had access to the
same conditions as developed countries that mainly rely on donations to run private education. Therefore, facing
the status of schools running by multilateral investment and not recognizing the legal status of for-profit schools
is impractical. Removing the legal aspects from the reality has caused obstacles to the development of private
education. A system of public support based on fair and coordinated development should be established.
4.2.1. Adjust Minimal Criteria of Fiscal Support
Since different private schools have different levels of funding requirements, the government should take into
account the quality of school administration and properly consider the funding difficulties and options to adjust
financial support, not just simply follow the standard of three to five times of the current students average
budget.
4.2.2. Provide Land Use Right and Implement Preferential Policies on Taxes and Fees
Regarding the right to land use, the most prominent problem is the conflict of legal requirements. For instance,
diploma-granting private schools are required to pay 25 percent enterprise income tax; while non-diploma private schools need to pay 3.3 percent business tax plus 17 percent enterprise income tax. An equal preferential
policy on tax should be applied to the non-profit private schools and public schools.
4.2.3. Establish Early-Warning Mechanism for Fiscal Support and Improve Public Finance System
of Private Schools
With the rise in financial subsidies for the private schools, which are also increasing in number, the accumulated
supporting amount of the government would reach its limit of fiscal support. This usually results in a freeze of
funding without any early-warning, which certainly creates obstacles in the development of private schools. It is
also the issue that private school administrators and teachers registered to social insurance program are mostly
concerned with. According to the revenues and expenditures of the government and predictions on future economic development, the upper and lower limits of government fiscal support should be measured and calculated,
followed by the establishment of an early-warning mechanism.

4.3. Strengthen Teachers Team Build and Explore Multi-Modes for School Running
Teachers team dynamic is the core element in private education development and is also critical to the improvement of education quality. Currently, the instability of teachers team dynamic is the bottleneck that restrains the private education development. The root reason is the unequal payment of retired teachers of private
schools and public schools. The private schools in China need to actively explore new modes of running schools,
using the experience of other countries for reference, such as famous school-private school partnership or private school running with public school support.
4.3.1. Strengthen Teachers Team Dynamic
Teachers should be better recognized and should receive guaranteed remuneration. In the current national policy

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system, the main way to ensure the institutional identity of private school teachers is to use a personnel agency
system for teachers and allow them to have the equal legal status as the public school teachers. Teachers should
also be encouraged to volunteer teaching in rural schools in order to increase teacher mobility. A mechanism for
teacher mobility should be established between private and public schools, whose seniority and teaching years
should be continuously calculated. Teacher training should be strengthened for private school teachers and to
establish an introduction mechanism for excellent talent. By the end of October 2013, there were 962 teachers in
county A and 272 teachers in district B from various private schools who had completed teacher qualification
training. The number of trained kindergarten teachers is 745 in county A and 650 in district B, but it is still far
from being enough.
4.3.2. Establish Multi-School Running Modes and Deepen School Running System
Industry and enterprises should be encouraged to participate in running public schools. Public schools and private schools should be encouraged to support each other and administer schools jointly by various means such
as purchasing services from one another. New methods of managing and administrating schools should be encouraged, which might include commissioned management and international cooperative school running.

4.4. Guarantee School Running Autonomy and Regulate School Administration

4.4.1. Ensure School Running Autonomy and Construct the Index System of Education Quality
Evaluation
According to the relevant national regulations and requirement of administering schools, private schools should
be encouraged to explore new options for student recruitment, teaching management, personnel distribution, and
international cooperation and exchanges. This allows greater independence in school management, and fosters a
situation that schools are run according to law, that the government is administrating legally, and the society is
supervising according to law. In addition, the teaching quality evaluation index of public schools should be referred to establish an index system of teaching quality and optimize the school administration quality.
4.4.2. Clarify the Property Ownership and Establish Financial Supervision Mechanism
The current financing difficulties of private education are due to the unclear legal entity status of schools and
undefined school property rights. This leads to difficulties in terms of assigning property rights and also makes it
difficult to implement accounting regulations and school financial supervision. Ownership of private schools
accumulated shall be identified according to the law. The exit mechanism of private schools should be established and improved. Property management should be strengthened in accordance with the law. Only with clear
property rights will the interests and benefits of investors be protected and will the enthusiasm of investors on
school running be fully activated.

4.5. Promote the Investment and Financing System Reform and Attract Social Resource
Input in Education
To perfect the education investment and financing platform, with the aid of the Education Development and Investment Group Co., Ltd., financial institutions should be encouraged to provide innovative financial products,
and actively provide financial services to private schools. New tools should be explored such as private school
loans on mortgage by using non-teaching assets, pledge loans on charging rights and intellectual property rights,
and credit loans. Also, schools should be allowed to explore setting up Guarantee Corporations in different regions to support the private education and to conduct intensive development. By broadening the financing
channels, reforming the system of investment and financing it will lead to new social resources in education.

4.6. Institute the Mixed Ownership and Innovate School Running System and Mechanism
The Decision of CPC Central Committee on Major Issues in Deepening the Reforms says that a mixed ownership economy is the important form of the basic economic system in our country and is conducive to all kinds
of capital to promote each other for common development. Actively developing the mixed ownership economy
has an important guiding significance for social forces to run education. All kinds of school administrators
should be supported to run private education by various means such as sole proprietorship, joint venture, coop-

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eration, and joint-stock system. It also requires increases to the institutional mechanism of innovation, establishment and perfection of the educational and public policy, construction of a modern school system, the broadening of financing channels, and attraction of social forces to invest in education, which ultimately leads to a
positive level of mutual development of public and private education [2].

5. Conclusion
In conclusion, city X combined with the actual situation of the local economic and social development, highlighted its own citys features in the aspects of school administration system reform, investment and financing
environment optimization, and government support funds; it also kept overall consistency with the macro education system while stressing the relative flexibility of the local education system. City X has made a positive contribution to four areas including expanding the supply of educational resources, providing a variety of choices,
innovating institutional mechanism of education, and inspiring education activity. To form a good pattern of
mutual development of public and private education with the government as the main school administrator and
the society as active participants, it requires the following actions: insisting on developing in the direction of optimizing private education quality and equalization of public education; developing a linkage mechanism of toplevel design, government led, departments coordinated, grass-roots innovation, and participation of social forces;
fully considering the regional situation and market characteristics; and using mechanisms of market regulation
and resource allocation.

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