City unveils new policy on private school identity

Shanghai on Wednesday unveiled a new policy to regulate private schools in the city, classifying them into non-profit entities and those seeking profit.

The private schools include training organizations, kindergartens, primary and middle schools and higher educational institutions.

No for-profit schools are allowed to be set up in China’s nine-year compulsory education phase, namely primary and middle schools.

Non-profit institutions will not be able to earn revenue from running schools and all profit will be put into school operations, while other private schools can deal with their revenue according to company law and other regulations, according to the new policy.

Existing schools will have to make a choice about their future identity — non-profit or otherwise — and submit related paperwork to authorities for registration before the end of next year.

However, none of the primary and middle schools, or those in China’s nine-year compulsory education phase, will be allowed to transfer their status and become for-profit entities.

Those choosing to make profit will have to finish their financial settlement and re-register their legal representatives. Those providing higher education will have to finish the process before the end of 2021 while the others by the end of 2020.

The existing profit-making private training organizations have to improve their conditions and quality and apply for permits to run the schools before the end of 2019.

Future schools will have to clearly state their identity choice when applying for qualifications to run private educational institutions.

The new policy states that non-profit private schools will have to register with educational authorities while for-profit ones have to do so with the industry and commerce department.

For-profit schools must have “company” or other similar words that reveal their identity in their official names.

The city and district governments will support and manage the two categories of schools separately.

The government will set up credit systems and make related information public, such as the establishment and closure of schools, annual inspection results, record of punishment and awards.

The government also encourages social agencies to take part in the management of private schools, such as providing evaluation, consultation and legal and financing services.