At a 24-hour coffee shop in Beijing’s Haidian district, private tutor Ming Tian was explaining a math question to students. A few blocks away in a 20-story building housing scores of after-school tutoring facilities, classrooms and offices were empty.
Huang Zhengxin, the father of a daughter in middle school and a son in elementary school, was anxiously looking for alternative summer tutoring channels for his children. Meanwhile, Sun Ke, a veteran employee of an online education company, had just lost his job.
So it goes as China’s sweeping overhaul of the giant tutoring industry creates millions of personal dramas across the country. Instructors are being thrown out of work in droves and Chinese parents now face new worries about securing their children’s futures. The upheaval grew out of a government clampdown unveiled in July that bans all tutoring related to the core school syllabus during vacations and weekends for students in elementary and middle school, while barring private tutoring companies from going public or raising foreign capital.
When the State Council, China’s cabinet, issued the new rules last month, the tutoring industry was just like “a file on a computer desktop; selected and deleted,” said Wang Lin, teaching head of a large online education company.
More than $100 billion was wiped off the market value of three U.S.-traded Chinese education giants — TAL Education, New Oriental Education & Technology, and Gaotu Techedu — compared with the stocks’ highs earlier this year.
A week after the new rules were released, Zhangmen Education laid off more than 1,000 employees and terminated the leases on two of its office buildings. Zhangmen had just floated shares in New York in June. TikTok owner ByteDance is laying off thousands of employees working on preschool education and ed-tech products, people close to the company told Caixin.
Comply to survive
After the initial shock — shutting down classes, laying off employees and closing offices — education companies now face a common question: What do they do next to survive?
The answers will vary from company to company, but as they pick up the pieces, China’s tutoring enterprises are finding a range of opportunities.
After investors’ initial panic, the regulatory crackdown will bring transformation opportunities for the industry in the long term, said Ge Wenwei, partner of Duojing Capital, an education industry-focused research and investment company.
There is plenty of room in the sector for new products, said Wang Jinjing, a managing partner in charge of education and training at Oliver Wyman. With society rapidly developing, the requirements to enter the workforce of the future may differ greatly from today, while schools are often slow in updating their programs, she said.
“What capabilities will our next generation need to compete on the global stage 20 years from now?” Wang asked. “Parents will really love to pay for high-quality education products designed for the future … growth potential is very good.”
In addition, local education commissions need new communications technology to advance development. Compared with individual schools, education commissions usually have larger purchase orders and deeper pockets, Wang said.
The new rules require all private companies that teach compulsory school subjects to become nonprofits. Beijing plans to require companies to complete the transition to nonprofit status by the end of this year, Caixin learned from staff at the Beijing Municipal Education Commission. Some municipal education authorities in Shaanxi Province ordered companies to complete the change by October.
The Beijing education authority suggested a change in focus to sectors that are not affected by the new regulations, including high school tutoring, vocational education, all-around education and hybrid business models, Caixin learned.
A hybrid business model under the new policy would mean providing tutoring in school subjects from 6:30 p.m. to 9 p.m. on school days while offering other subjects on weekends and holidays, such as sports, music and arts. This model could help companies maximize student retention and reduce the risk of massive refunds. Businesses would have to spin off their school-subject tutoring operations and become nonprofit organizations, while activities focusing on teaching nonschool subjects could continue as assets of the companies as long as they are managed separately in accordance with the laws.
Under the latest interpretation by the Ministry of Education, school-subject tutoring refers to all off-campus classes on ethics, Chinese, history, geography, math, foreign languages, physics, chemistry and biology.
For publicly traded companies, adopting a hybrid business model could win them more time to expand into non-school-subject training and retain their status as listed companies, but it is inevitable that they will shrink. For major tutoring companies such as New Oriental, TAL and Gaotu, the school-subject tutoring business can account for 50% to 80% of total revenue.
Some U.S.-traded Chinese education companies are prepared for delisting and privatization. OneSmart International Education reported on Aug. 4 that it received a letter from the New York Stock Exchange saying it is below compliance criteria, as its stock price was less than $1 over 30 consecutive days. The company has six months to boost its share price to avoid delisting. More than a dozen U.S.-listed Chinese education stocks are trading close to $1.
Among major players, only Gaotu has made clear plans to switch to vocational education. The company is shutting 10 of 13 offline tutoring centers across the country and idling more than 10,000 people, about a third of its staff. New Oriental, Tal, Tencent-backed homework tutoring app Yuanfudao and Alibaba-backed Baidu edtech spinoff Zuoyebang have signaled business expansions or launched new products but have yet to make major shifts.
“Nobody has a clear mind how to transform,” an executive at an online education enterprise said. “We are trying all-around education, after-school care, collaboration with public schools and vocational education, but their sizes are all far from becoming the core business.”
Without tutoring in compulsory school subjects, scheduled classes across the tutoring industry will decline 61%, according to a report by China International Capital. Revenues of New Oriental will drop 43% and of TAL, 67%, the report estimated.
Tutoring companies can still offer classes during school days, but all classes have to end by 9 p.m. “If students finish their homework at 8:30 p.m., it doesn’t leave much time to take after-school classes,” said an executive at a regional after-school training company. “We used to schedule eight classes on weekends, now on weekdays we can schedule only five.” He estimated the company’s revenue would fall by 60%.
For online education companies, the major compliance change will be switching from live online classes to recorded courses. Zuoyebang and TAL started to take preemptive steps in June to switch to recorded courses. But the Beijing education commission warned companies that in the future recorded courses could be defined as educational publications, subject to licensing requirements.
Industry giants with large physical campus assets, such as TAL and New Oriental, are also exploring the after-school care business. The Ministry of Education encouraged public primary and middle schools in urban areas to provide two-hour after-school programs in line with parents’ working hours as well as summer programs. Such programs, run by schoolteachers, should help students with homework and conduct activities such as reading, sports and interest groups, but they cannot teach school syllabus content.
Parents have complained that programs run by schools cannot meet their educational needs. A primary schooler’s parent said no one in his child’s class has enrolled in the school’s summer program. “Kids have nothing to do there,” the parent said. “They can’t learn anything.”
The head of a public school in Beijing told Caixin that the school programs charge only a minimal fee and provide just basic care. “Kids are summoned to classrooms to sit for a whole day,” he said. “Kids are not happy. Teachers are not happy. And parents are not satisfied either.”
While the policy change upends the industry, it also presents new opportunities. The crackdown on after-school tutoring aims to bring the focus of education back to school campuses. Some companies are turning their focus to providing complementary services to schools. The government has also given a green light for public schools to purchase after-class services from third parties using government subsidies.
Beijing Lanxum Technology, which focuses on Chinese language teaching, recently said it is expanding services into drama and arts appreciation classes provided as part of on-campus after-class programs.
Shenzhen Dianmao Technology has been providing coding courses, teaching materials and teacher training for schools since 2019. The company works with more than 21,000 schools in China. But compared with its core consumer-facing business, the profit margin on school services is thin. Dianmao said it uses school entry as a way to popularize coding education and nurture the market rather than as a focus on profitability.
Li Tianchi, founder and CEO of Dianmao, said he expects more competitors will enter the school service market under the new policy. Dianmao aims to increase the share of school services in its total revenue, but this will require an accurate understanding of schools’ needs and the policy environment, Li said.
Another service that schools need is help building information-based platforms. For example, Singapore’s Temasek-backed Yiqizuoye since 2011 has been providing free services to public primary and middle schools, including a platform to help teachers prepare courses, assign homework and review students. As the service is free, the company’s revenue relies on its K-12 online tutoring courses.
At the request of the interviewees, the names of parents, teachers, employees and schoolmasters are all aliases.
Read also the original story.
Caixinglobal.com is the English-language online news portal of Chinese financial and business news media group Caixin. Nikkei recently agreed with the company to exchange articles in English.
Swiss researchers have spent 108 days calculating pi to a new record accuracy of 62.8tn digits.
Using a computer, their approximation beat the previous world record of 50tn decimal places, and was calculated 3.5 times as quickly. It’s an impressive and time-consuming feat that prompts the question: why?
Pi is, of course, a mathematical constant defined as the ratio between a circle’s circumference and its diameter. The circumference of a circle, we learn at school, is 2πr, where r is the circle’s radius.
It is a transcendental, irrational number: one with an infinite number of decimal places, and one that can’t be expressed as a fraction of two whole numbers.
From ancient Babylonian times, humans have been trying to approximate the constant that begins 3.14159, with varying degrees of success.
The amateur mathematician William Shanks, for example, calculated pi by hand to 707 figures in 1873 and died believing so, but decades later it was discovered he’d made a mistake at the 528th decimal place.
In 1897, the Indiana Pi Bill in the US almost did away with fussy strings of decimals altogether. The bill, whose purpose claimed to be a method to square a circle – a mathematical impossibility – almost enshrined in law that π = 3.2.
What is it good for? Absolutely everything
Jan de Gier, a professor of mathematics and statistics at the University of Melbourne, says being able to approximate pi with some precision is important because the mathematical constant has many different practical applications.
“Knowing pi to some approximation is incredibly important because it appears everywhere, from the general relativity of Einstein to corrections in your GPS to all sorts of engineering problems involving electronics,” de Gier says.
In maths, pi pops up everywhere. “You can’t escape it,” says David Harvey, an associate professor at the University of New South Wales.
For example, the solution to the Basel problem – the sum of the reciprocals of square numbers (1/12 + 1/22 + 1/32 and so on) – is π2/6. The constant appears in Euler’s identity, eiπ + 1 = 0, which has been described as “the single most beautiful equation in history” (and has also featured in a Simpsons episode).
Pi is also crucial to something in mathematics called Fourier transforms, says Harvey. “When you’re playing an MP3 file or watching Blu-ray media, it’s using Fourier transforms all the time to compress the data.”
Fourier analysis is also used in medical imaging technology, and to break down the components of sunlight into spectral lines, de Gier says.
But, says Harvey, there’s a big difference between calculating pi to 10 decimal places and approximating it to 62.8tn digits.
“I can’t imagine any real-life physical application where you would need any more than 15 decimal places,” he says.
Mathematicians have estimated that an approximation of pi to 39 digits is sufficient for most cosmological calculations – accurate enough to calculate the circumference of the observable universe to within the diameter of a single hydrogen atom.
62.8tn digit accuracy – what’s the point?
Given that even calculating pi to 1,000 digits is practical overkill, why bother going to 62.8tn decimal places?
De Gier compares the feat to the athletes at the Olympic Games. “World records: they’re not useful by themselves, but they set a benchmark and they teach us about what we can achieve and they motivate others.
“This is a benchmarking exercise for computational hardware and software,” he says.
Harvey agrees: “It’s a computational challenge – it is a really seriously difficult thing to do and it involves lots of mathematics and these days computer science.
“There’s plenty of other interesting constants in mathematics: if you’re into chaos theory there’s Feigenbaum constants, if you’re into analytic number theory there’s Euler’s gamma constant.
“There’s lots of other numbers you could try to calculate: e, the natural logarithm base, you could calculate the square root of 2. Why do you do pi? You do pi because everyone else has been doing pi,” he says. “That’s the particular mountain everyone’s decided to climb.”