China’s education crackdown flunks economics

China’s education crackdown flunks economics

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.) HONG KONG - Beijing is mastering subtraction, but struggling with basic economics. A crackdown on the country's $120 billion tutoring industry may help address manic competition for college preparation, which distorts the labour supply and suppresses the birth rate. It's a byproduct of a widening wealth gap, however, and this approach could make it worse. Chinese tiger parents serve investors well. Families in Shanghai's Jing'an district, for example, spent around $80,000 per child on educational services before they even reached high school, a 2019 state think-tank survey found. Multiplying by 400 million middle-income people produces a massive market. TAL Education and Gaotu Techedu are among the companies that rode the thesis straight onto U.S. bourses. There's no mandate to "leave no child behind“ in China. Teachers identify the best students early and invest in them. The playing field is theoretically flat; children who score well on the all-important "gaokao“ college exam can pull a family out of poverty. Nobody likes "teaching to the test“ more than poor Chinese parents. But manic rivalry has engendered a negative feedback loop. To please competitive moms and dads, schools force advanced