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Education— China's second most profitable industry
The Epoch Times
2/3/2004



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Education was the second most profitable industry in China in 2003, according to a report from Youth Express, a Mainland China publication. It is also one of the most corrupt. Education is among the many industries that use ancillary fees and other illegal profiting methods. This year, authorities disciplined 2,488 people in the educational field, and dismissed 359 school principals.
Yet the corruption extends far beyond those disciplined.

Last year, elementary and middle school education in China became the second most profitable industry after real estate. Profits in the real estate industry are mostly capital gains, due to a real estate bubble. When the bubble pops and real estate prices come back down, education will have been the most profitable industry of China in 2003.

Illegal profits come at the expense of the 300 million children who depend upon public primary education, and their families, who have to pay these fees. Education experts point out that systems for collecting education fees are obscure and unregulated. There are many loopholes in fee collection. Dismissing a few principals may look good in the media but fails to address rampant illegal fee collection. Experts are calling for the pace of education reform to be accelerated.

Unjustifiable Profiteering

Rampant illegal fee collection in compulsory elementary and middle school education is both profiteering and an abuse of public power.

According to Youth Express, in just one Beijing middle school, more than 700 million yuan of illegal fees were collected, and went into the pockets of school administrators, “who became millionaires” (sic). Many middle school teachers have monthly salaries of over 4000 yuan, which is higher than those of both high-level civil servants or professors. On top of that, teachers can often get 300,000-600,000 yuan housing subsidy ($36,000-72,000 US).

Last year, audits of nearly 3,000 elementary schools and 1500 middle schools in Jiangxi Province found 125 cases of illegally collected fees worth 2 million U.S. dollars. Across the country, the government has uncovered over 20 million U.S. dollar’s worth of illegally collected school fees and ordered their return. Yet the returned amounts make up a tiny portion of illegally collected fees. Educational experts estimate about 24 billion U.S. dollars in illegal fees have been collected in the past decade.

Exposing the Defects in the Education System

The most detrimental effects of these illegal fees fall upon the 300 million schoolchildren and their families. Statistics show that American families pay about 15-20 percent of their income for education, but in China the education expense is over 50 percent of family income. In rural areas the ratio is even higher. This enormous burden redirects a large chunk of the family income into education costs, a large portion of which does not fund education but instead enriches corrupt officials. If families’ money cannot be saved, many children will not receive even compulsory education. If the cost of education continues to rise, many families will not be able to afford “free and compulsory” State-provided primary education.

A January 6 report on the People’s Daily web site said that these fees exist because the cost of education and legal limits of reasonable education fees are vague and obscure, and no mechanism exists to oversee education fee collection. There have been calls for a transparent and supervised fee-collection system.

Many parents have been forced to accept and tolerate the schools’ profiteering. The desire among Chinese families to see their child get ahead in life is so great, they will cut back on food and clothing to pay for education. Consequently, school “choice fees” and “sponsorship fees” flow into schools. These fees could be used to improve school infrastructure, but because there is no supervision the money ends up unaccounted for. Some schools do not require entrance fees, but collect “uniform fees,” “course material fees,” and so on, day in and day out. Some teachers purposely leave out some topics in the classes they teach in order to “encourage” parents to pay for after-school tutoring. There are many similar ways of squeezing money from parents.

Deteriorating Ethics Among Educators

The People’s Daily website report pins the blame for the extortive school fees on the deterioration of ethics among many educators. Without a supervisory mechanism, cases such as a school superintendent embezzling millions from a poverty-stricken county are bound to continue.

The report also said some people excused their actions by quoting the “market principle,” meaning that their school prices should conform to the market, and claim that “beneficiaries must invest in their own education.” Consequently, wealthy students can buy their way into universities and even into popular departments and specialties. This seems to be in line with the market-adaptation of education. Yet even in the most market-oriented countries, such as the United States, New Zealand, and Singapore, primary and secondary education in guaranteed, without exorbitant fees.

“Inadequate state funding” is another excuse for the extortive fees. However, much of the illegally collected fees were not used for education purposes.

The report pointed out that only a few benefited from the profiteering in compulsory education. Yet the standard of education of the nation's future workforce has been damaged as a result. The profiteering has shaken the foundation of basic education and deprived many children of their right to education.

An Internet user commented, “Education used to be a sacred temple and the profession of teacher was highly regarded in society. Now education is open for profiteering and the temple has collapsed. Teaching can no longer be called teaching, nor teachers called teachers. This is not just a tragedy for children, but also a tragedy for the entire nation.”


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