Industry Analysis

Driving Factors for Education Industry in China

Income growth for middle class in China is expected to drive up education spending: According to Research, the per capita disposable income of Chinese urban households increased rapidly from CNY 24,565 in 2012 to CNY 31,195 in 2015, and is forecasted to increase to approximately CNY 44,290 in 2020. The rise of middleclass families in China is expected to drive the spending on premium education, as such families are relatively well educated and they consider that good education background could benefit their children in the long run.

Encouragement for private investment in the education sector: Currently, the majority of the education institutions in China is funded and operated by government authorities and education resources are not necessarily able to be distributed equally. The central government tends to increasingly welcome private investment in the education industry to improve efficiency, hence likely to benefit private-owned education group with large scale.

Demand for well-rounded education with premium quality: Many believe that existing education in China may have over emphasized on examination scores, while other aspects of students such as social skills, psychological and physical health may have often been neglected. There is an increasing preference from parents to seek for high quality academic programs from private schools that can offer a more comprehensive education program that aims to educate students with all-rounded ability.

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