Beijing’s crackdown on private tutoring is upending lives inside and outside China

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After quitting a full-time teaching job and joining the online tutoring platform VIPKid, Canadian Tim Gascoigne coached hundreds of people who wanted to join the booming startup that connects children in China with English teachers across the world.

Gascoigne, who runs a popular YouTube channel called Online Teacher Dude, had been aware of rumblings of trouble looming (video) for tutoring in China. Early in August, an acquaintance at another Chinese tutoring platform messaged him to say he had just lost his job. Then last Saturday (Aug. 7), VIPKid suddenly announced it would no longer offer new classes with foreign tutors.

“It was just like chaos, absolute panic,” said Gascoigne, who’s now based in Thailand, recalling waking up to the news. “My Facebook groups were blowing up, my Instagram was blowing up, and my YouTube channel was blowing up.”

In less than a decade, Chinese English-language tutoring platforms became a major employer for young people from English-speaking countries willing to work evenings and weekends, a sign of the rising influence of Chinese tech companies globally. VIPKid, one of the largest players in online English teaching globally, says it has more than 70,000 tutors in the US and Canada. Some of them, such as stay-at-home moms, came to rely on the Chinese platforms for a substantial amount of income. But now this pool of foreign teachers is feeling the pain of China’s tech clampdown.

“Teachers are applying everywhere, trying to grab something that could replace their income from VIPKid. I think right now people are just in desperation, panic mode,” said Gascoigne.

Beijing domesticates a globalized industry

VIPKid launched in 2014, offering 25-minute video classes with native English speakers. It quickly took off, turning founder Cindy Mi into a celebrated example (video) of a Chinese female tech entrepreneur. Its pitch of earning $14-$22 an hour from the comfort of one’s own home was especially appealing to young moms, and it was relatively easy to get started, sometimes taking just a month from applying with an online demo to teaching the first class.

It was part of an expanding after-school education industry that catered to worried parents trying to give their children a leg up in a highly competitive exam-based system. In doing so, these firms created an industry valued at upwards of $100 billion with investors that include some of the world’s biggest investment funds. But as China tightens its regulatory scrutiny over the tech sector in the face of Communist Party concerns about the influence and wealth of its biggest companies, it has hit especially hard at the private education industry, which officials see as contributing to inequality and perhaps even the country’s plunging birthrate.

In late July, China issued a harsh set of rules (link in Chinese) that aim to ease homework and after-school study hours for students, a policy dubbed the “double reduction.” They bar for-profit companies from teaching China’s school curriculum, block foreign investors from holding stakes in firms offering such classes, and don’t allow after-school tutoring on weekends or during vacation. The idea is to both make educating children less costly for parents, and to reduce the pressure on children from an early age, something tutors get a tiny glimpse into.

“It’s aways like, [when I ask them] ‘What are you doing today? ‘Homework.’ ‘What are you doing later?’ ‘Homework.’ There was no talk about social life or playing in the park,” said Gascoigne.

While state-media say the ban on foreign teachers on online platforms is driven by parents’ concerns about qualifications, there may also be an ideological component to the decision given a simultaneous effort to bar the use of foreign textbooks in primary and middle schools. In general, the moves appear to more tightly cement the public system’s control over the education of young children.

An impact beyond borders

Other regulatory steps against the tech industry, such as the suspension of fintech giant Ant Group’s IPO last year, or the opening of a cybersecurity investigation into ride-hailing firm Didi, hurt investors and tycoons. But the education crackdown is quickly upending millions of lives of ordinary people. Around 10 million people in China were working in the education sector last year, according to a report (link in Chinese) jointly issued by the Beijing Normal University, which focuses on teacher education, and a research arm of US-listed TAL, a leading private education player.

ByteDance, the owner of TikTok, reportedly laid off hundreds of employees in its online education business, an area that it had seen as a new growth engine, on top of its core business of video streaming. The company shut down Gogokid, a one-on-one English-learning app, after the new rules came out, according to Bloomberg.

“Given recent changes in the regulatory environment, we are scaling back some of our Pre-K and K12 business lines in the Chinese education consumer market, including Gogokid,” said a ByteDance spokesperson.

The company has set up a team to help teachers and parents affected by the change, and transferred some employees impacted to work on other projects, according to a person familiar with the matter. Beyond VIPKid and Gogokid, 51talk, another online platform offering English tutoring, also said recently it will stop connecting teenage users with overseas teachers because of the new rules. 51Talk didn’t immediately reply to a request for comment.

Education firms are still processing the new rules, but insist they remain confident in their models. An investment consultant to the edtech sector previously told Quartz that amid regulatory uncertainty in China, Chinese companies are now looking at expanding in Southeast Asian markets.

“While the new regulations will impact our business in China, we remain confident in VIPKid’s future. Over the past year, we have been piloting several education programs outside of China,” said a VIPKid spokesperson. “Since the recent announcement, teachers have overwhelmingly reiterated their passion for teaching on the VIPKid platform. We are committed to maintaining and growing the opportunities for them and all online educators.”

The new regulations won’t affect students in other countries, while students in China can continue to receive instruction from foreigners residing in China, according to the company.

Still, many VIPKid teachers expect to have to find something else to do.

“Most teachers are depressed over it and find it absurd that the government can tell parents that their kids cannot [use] tutors,” Matthew Cowan, a VIPKid teacher based in Austin, Texas, told Quartz. Like many others, Cowan, who joined the platform in 2017 after being referred by a friend, grew to love the work-from-anywhere lifestyle the Chinese company supported. Cowan says that while he can continue teaching the existing courses students already paid for, he expects that to last only last around three to six months. Then, he’ll have to find a full-time job, because non-Chinese tutoring firms “do not pay enough.”

Dimming job prospects for Chinese college grads

China wants to level the education playing field and reduce the burden of child-related costs so that young people will feel more motivated to have kids. But ironically, it’s doing that by dimming the job prospects for recent university graduates who already face higher unemployment rates than the country as a whole.

The tutoring industry had become a “reservoir” of job opportunities for that group, according to Chinese news portal Those born after 1995 account for nearly 76% of the total teacher workforce in the online teaching field, according to a report last year from Beijing Normal University. Education provides 17% of the jobs held by recent graduates, more than any other field, the Financial Times reported, citing Moody’s Analytics.

In a forum for teachers on Chinese social media Douban, fresh posts pop up every day from laid-off tutors asking what they could do after having lost their jobs. “Should I become a tarot card reader or an IELTS teacher, please guys vote to help me decide!” asked a poll from a user who described themselves as a private English tutor, referring to the standardized test of English language proficiency. Others joked that teachers would now have to offer their services in the black market, like criminals.

They may not be entirely wrong. In China, central decrees are often open to interpretation by local authorities, which then carry out the initiatives with varying forcefulness. In addition, public criticism of a profession or industry can strongly shape public opinion.

One tutor on the forum wrote that one of her teenage students called her a “gangster,” and told her that private tutors, similar to those engaged in organized crime, should be outlawed.

It is too early to estimate the scale of the impact of the new regulations on job opportunities, said Ye Liu, a sociologist and senior lecturer in international development at King’s College London. But the government definitely doesn’t want to see mass youth unemployment, because it doesn’t have a Plan B for that scenario, she said. Already, the unemployment rate for people aged 16-24 is 15.4%, compared to about 5% overall.

“Sometimes, it feels like the Chinese government’s policies…can have really unintended consequences,” said Liu. “They didn’t really think about the chain effect of this policy on parents and the younger generation.”

The market’s not going away

Without a fundamental reform to China’s existing educational system, parents’ desire to help their children get ahead will prompt them to find new ways of accessing private educational services.

“Urban, middle-class families still want their children to learn different languages, and acquire different skill sets to be more competitive in the future, the market is still there,” said Liu.

To really address the inequality in China’s educational system, the government needs to invest more in teacher training, improve the quality of schools in rural areas, and also diversify education pathways to not only provide competitive academic courses but also skill-based ones, such as training young people to become caregivers for the elderly or babies, she said.

Gascoigne, the VIPKid tutor, said he believes Chinese parents still want their children to have classes with foreign teachers, and are trying to figure out how to continue them.

“You have millions of people without teachers and millions of teachers without students,” he said. “They are going to find a way.”