A loophole in the crackdown 

As criticism grew, Yú Mǐnhóng 俞敏洪, the founder and president of New Oriental Education, responded to the controversy today, stressing that the company never intended to “offer education on curriculum subjects for parents.” His response, however, was missing the point, according to many critics. They argued that although the program was advertised as a way to help adults improve parenting skills, it would inevitably raise clients’ expectations of their children. 

“It looks like New Oriental has discovered a loophole in the crackdown, and that is the market of parent education,” a Weibo user wrote (in Chinese), while another one said (in Chinese), “It’s just old wine in a new bottle. It doesn’t give a stuff about easing academic pressure on Chinese students. All it cares about is profit.”

China’s private education sector has not been doing well lately. Once a $120 billion industry built on the promise of the world’s largest and arguably most-competitive schooling system, it has been hit with a slew of stringent regulations imposed by Beijing over concerns about a combination of factors, including fraudulent practices by tutoring agencies, an unchecked expansion of capital in the industry, and mounting financial pressures on families that have contributed to low birth rates. 

Last month, in a shocking decree that rocked the country’s stock markets, the State Council, China’s highest governing body, announced a broad set of reforms for private education companies. The rules include banning companies that teach core curriculum subjects from making profits, raising capital, or going public. In the days following the announcement, shares of New Oriental Education, dual-listed in New York and Hong Kong, plunged approximately 70%.

Losing the business of K-12 after-school tutoring — the main segment targeted by Beijing that used to make up 75% of the company’s revenue, New Oriental has been forced to undergo a transformation. In addition to expanding businesses not specifically targeted by the new regulations, such as exam preparation, foreign language courses, and non-academic learning, the company has been exploring new areas of opportunities. And parent education appeared to be one of them.

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