China blocks paid after-school tutoring by public-school teachers

China has blocked paid after-school tutoring services provided by teachers working for public primary and middle schools.

The country's Ministry of Education issued sweeping rules last week that bar for-profit after-school tutoring in core school subjects, in an effort to boost the birth rate by lowering family living costs. The policy also restricts foreign investment in the sector.

The ministry said in a statement on its website that it would also tackle teachers illegally receiving bribes, and show "zero tolerance" towards teachers who "teach only after classes but not during classes".

The new rules threaten to decimate China's $120 billion private tutoring industry and triggered a heavy selloff in shares of tutoring companies traded in Hong Kong and New York, including New Oriental Education and Technology Group and Koolearn Technology Holding Ltd.

Under the new rules, all institutions offering tutoring on the school curriculum will be registered as non-profit organisations.

This change drastically affects China's public education scene, where at least 75 percent (as of 2016) of school students attend tuition classes outside of school hours. Compounding the situation is the ban placed on tuition businesses from raising funds via public channels such as initial public offerings (IPOs) and foreign investments.

In 2016 China relaxed its "one-child policy," one of the world's strictest family planning regulations, allowing couples to have two children as concerns mounted over an ageing workforce and economic stagnation.

But annual births have continued to plummet to a record low of 12 million in 2020, Beijing's National Bureau of Statistics said this month, as the cost of living rises and women increasingly make their own family planning choices.

China's fertility rate stands at 1.3, below the level needed to maintain a stable population, the figures revealed.

The slump threatens a demographic crisis that has alarmed President Xi Jinping's ruling Communist Party, risking a shortage of young workers to drive an economy experts say will have to support hundreds of millions of elderly by 2050.

(With inputs from agencies)