Chinese regulations and
education export to China
Yuzhuo Cai
University Lecturer, Adjunct Professor
CEREC/HEG
School of Management, University of Tampere
15 March 2012
Targeting audience
 If you want to recruit Chinese students to study in your
degree programmes in Finland (with a tuition fee)
 If you want to develop joint degree programmes with
Chinese partners
 If you want to open a branch (or offshore campus) in
China
 If you want to sell educational services to Chinese
organisations and individual learners
 If you are just interested in the topic
Main regulations
 International regulations
 International organisations’ regulations and bilateral
agreement on educational services
 China’s commitment to WTO’s General Agreement on Trade in
Services (GATS)
 Domestic legislations
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Regulations on Sino-Foreign cooperatively running schools
Regulations on academic degrees
Accreditation of foreign degrees in China
Intermediary agencies in student recruitment for foreign
educational institutions
 …
International organisation
 International rules have an impact on China’s internal
education activities
 UNESCO: the Code of Good Practice in the Provision of
Transnational Education
 Respected in China but not legally binding for either the
Chinese government or the Chinese educational institutions.
 Bilateral agreements on international cooperation and
educational services
 WTO rules are more influential
WTO and education services
 China joined the WTO on 11 December 2001
 Education is treated as a trade service
 Education services exclude:
 military, police, political and party school education
 Nine-year compulsory national education
 Education services include:
 Primary education services (excluding nine-year national compulsory
education)
 Secondary education services (excluding nine-year national compulsory
education)
 Higher education services
 Adult education services
 Other education services, including English language training
Commitment to GATS
 Four GATS modes:
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Cross-border supply
Consumption abroad
Commercial presence
Presence of nature person
 China has limited access to the world’s education
markets according to China’s commitment.
Mode 1: Cross-border supply
 Cross-border supply mainly refers to the provision of
distance educational courses and services.
 However, China has made no commitment to cross-border
supply in terms of either market access or national
treatment.
 This does not necessarily mean that foreign educational
institutions could not provide education services through
distant education in China.
 Rather, China could independently decide how to create
this market according to its own standards without being
bounded by the GATS.
Mode 2: Consumption abroad
 Consumption abroad mainly refers to citizens of one
country studying in another country.
 China has imposed no limitations either on market
access or national treatment, meaning that
 the Chinese government has not taken any measures
to restrict Chinese citizens from studying abroad, and
from receiving citizens of the other WTO member
countries to study in China.
Mode 3: Commercial presence
 Commercial presence refers primarily to the educational
institutions from one country in another country to set up
schools and other educational institutions that are
engaged in education and related services.
 According to China’s commitment, foreign education
institutions are not allowed to independently set up
branches and other organisations.
 Foreign education institutions may enter China, but must
partner with Chinese institutions to establish joint schools,
whereas foreign majority ownership is permitted.
Mode 4: Presence of natural persons
 Presence of natural persons refers primarily to the
citizens of one country in another country who are
engaged in professional teaching and training.
 China has set a limit on market access with respect to
the movement of people: qualified foreign individuals
may enter China to provide education services when
invited or employed by Chinese education
institutions.
Regulations on Chinese-Foreign
cooperation in running schools (CFCRS)
 1995: Interim Provisions on Chinese-Foreign Cooperation in
Running Schools, State Council
 2003: Regulations on Chinese-Foreign Cooperation in
Running Schools, State Council
 Definition of Chinese-Foreign Cooperation in Running
Schools: “The activities of the cooperation between foreign
educational institutions and Chinese educational institutions
in establishing educational institutions within the territory
of China to provide education service mainly to Chinese
citizens”.
Main stipulations
(in both 1995 Interim and 2003 Regulations)
 foreign institutions must partner with Chinese
institutions;
 partnerships must not seek profit as their objective;
 no less than half of the institution governing body
members must be Chinese citizens;
 the post of president or the equivalent must be a
Chinese citizen residing in China;
 the basic language of instruction should be Chinese;
 tuition fees may not be raised without approval.
Changes in the 2003 Regulations
 extending governmental encouragement from
vocational to higher education,
 promoting Chinese universities to cooperate with
renowned overseas HEIs in launching new academic
programmes to improve the quality of teaching and
learning and to import excellent overseas educational
resources to local institutions,
 relaxing the restrictions on profit-making.
2004: the Implementation Measures for the Regulation
on Chinese-Foreign Cooperation in Running Schools
 2004: the Implementation Measures for the Regulation on
Chinese-Foreign Cooperation in Running Schools, MOE
 not only “joint venture” schools but also joint programmes
 “A Chinese-foreign jointly run school is entitled to the
support and encouraging measures granted to privately
run schools by the State in line with the provisions of the
Law on Promotion of Privately-run Schools”
 a jointly run school shall not engage in profit-making
operational activities but that reasonable economic returns
are allowed.
Reasonable returns
 At the end of each fiscal year, a Chinese-foreign jointly run
school, whose vested parties do not require reasonable
returns, shall withdraw a sum of money from the increased
amount of its annual net assets, and the Chinese-foreign
jointly run school whose vested parties have requested
reasonable returns shall withdraw a sum of money from
the annual net gains, no less than 25% of the increased
amount of annual net assets or of annual net gains, to
serve as development fund used for the construction and
maintenance of the Chinese-foreign jointly run school and
the purchase and renovation of teaching equipment.
(Article 29)
MOE’s administrative imperatives
 2006: Opinions on Some Issues Concerning ChineseForeign Co-operation in Running Schools
 2007: The Notification on further standardising the
system of Chinese-Foreign Co-operation in Running
Schools
Main messages of the 2006,2007
documents
 The Chinese government is not satisfied with the current
situation on Chinese-foreign cooperation in running schools
 The nature of Chinese-foreign school operation as a public
service must be preserved.
 The Chinese educational institution in the cooperation shall play
a dominant role in carrying out national educational policies;
 High-quality foreign educational resources are encouraged,
while the quality control needs to be strengthened;
 The standards of the tuition fees of the Chinese and foreign
cooperative programmes are to be regulated.
Stagnancy 2006-2010
 Since 2006, the Ministry has taken a strict line on
approving new joint school applications.
 In practice, few applications have been acceded to.
 2009, evaluation of existing joint education
institutions and programmes.
 Close down of unqualified joint institutions and
programmes
New area of Chinese-foreign cooperation in running
schools
 2010: The Outline of National Plan for Medium and Longterm Education Reform and Development (2010-2020)
 The Outline has signalled that the Sino-foreign Cooperation
in Running Schools will be encouraged and expanded.
 The government expects that through importing
international educational ideas, curricula and teaching staff,
 more talent with international skills and perspectives will be
cultivated in China to meet the needs of economic
development.
 However, the government will raise the threshold, meaning
only those prestigious and high-quality foreign partners can
be granted permission to China.
How to operate in practice
 Find a local educational institution as co-operator and
apply for governmental approval in China.
There are three ways to cooperate with Chinese
partners in establishing the CFCRS:
 a cooperatively run independent institute (a joint
venture),
 a school or college affiliated to a Chinese host university,
 a joint programme.
Examination and approval
Education programmes
Approval Authorities
BA degree and above
MOE
Sub-degree (three-year higher education) Local educational authorities
(provincial, municipal)
Secondary education
Local educational authorities
(provincial, municipal)
Vocational education
Local educational authorities
(provincial, municipal)
Legal challenges in CFCRS 1
 No-profit defined by the Chinese regulations vs.
education as a trade service defined by WTO
 “Chinese-foreign cooperation in running schools is an undertaking
beneficial to public interests and forms a component of China’s
educational cause” (Article 3, 2003 Regulations).
 Chinese language vs. foreign language (Unclear
definition of “basic teaching language”)
 “A Chinese-foreign cooperatively-run school may, if necessary, use
foreign languages in teaching, but shall use the standard Chinese
language and standard Chinese characters as the basic teaching
language” (Article 31, 2003 Regulations).
Legal challenges 2
 Ambiguous intangible assets evaluation
 A Chinese or foreign co-operator in running a school may contribute with
funds, in kind or in forms of land-use right, intellectual property rights or
other assets to establish the school.
 Contribution of intellectual property rights by a Chinese or foreign cooperator in running a school shall not exceed one-third of its total
contribution. However, for a foreign educational institution that comes
to China for cooperation in running a school at the invitation of the
education administrative department or the labour administrative
department of the State Council or at the invitation of the people’s
government of a province, an autonomous region or a municipality
directly under the Central Government, its contribution in the form of
intellectual property rights may exceed one-third of its total
contribution. (Article 10, 2003 Regulations)
Legal challenges 3
 Lack of matching legal provisions and policies
 The legal rights and interests of Chinese and foreign cooperators in running schools and of Chinese-foreign
cooperatively-run schools shall be protected by the laws of
China.
 Chinese-foreign cooperatively-run schools shall enjoy
preferential policies made by the State and enjoy
autonomy when conducting educational activities in
accordance with law. (Article 4, 2003 Regulations)
Legal challenges 4
 When a Finnish HEI establishes a joint venture school
in China by being a shareholder of the organisation,
 is it legal or not according to Finnish law that the joint
school charges local students tuition fees?
Accreditation of foreign degrees
 All foreign degrees (incl. the degrees offered in
CFCRS) need to be accredited by the Chinese
authorities.
 Chinese Service Centre for Scholar Exchange (CSCSE),
MOE
 CSCSE does not accredit the degrees acquired
through corresponding education, long distance
education and internet education.
Intermediary Agents recruiting Chinese
students for foreign institutions
 The role of intermediary agent is often overlooked or
misunderstood.
 The agents charge (high) service fees when helping
Chinese students to study in Finland
 Conflict to Finnish ideologies?
 A partner in education export?
What is the Intermediary Agent for
Self-sponsored Study Abroad
 Many intermediary agents and consulting companies
established in the 1990s as a market response to the
increase of self-sponsored students to study abroad
 In 1999, 700-800 intermediary agents in Beijing only
 The operation was not regulated and some agents
conducted illegal operations.
 1999: The Regulations on the Intermediary Agents for Selfsponsored Study Abroad by Ministry of Education, Ministry
of Public Security and State Administration of Industry and
Commerce
Regulations on the Intermediary agents
for self-sponsored study abroad
 An intermediary agent needs a permission from the MOE
 419 registered agents in China by March 2012
 http://www.jsj.edu.cn/index.php/default/intermediary/index
 Business scope:
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Information and legal consulting,
Proxy to make admission application
Support for visa application
Training before traveling abroad, etc.
 Targeting clients: those Chinese citizens who have
completed the secondary education
Implications for Finnish educational
providers
 The local partner will help you in recruiting students
in the Chinese student market.
 You need to know whether the partner is a legal
intermediary agent.
 Not without problem, but monitored by the MOE.
 Don’t have business transaction before signing a
contract!
Training Chinese officials and
professionals
 Many Chinese officials and professionals are sent to advanced
and developed countries to take training courses or degree
studies ranging in length from a few weeks to a year and over.
 The training are organised by either Chinese central or local
governmental organizations, but their plans must be submitted
to the State Administration of Foreign Experts Affairs (SAFEA)
for approval.
 The SAFEA is the administrative department of the Chinese
government in charge of the national introduction of foreign
intellectual resources from abroad and also in charge of sending
Chinese technical and managerial professionals from
government departments and enterprises for overseas training.
What need to know?
 The organisation of training is highly regulated.
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What kinds of programmes
Where to go
How much is the budget
How to make the contract
 No open source documents from which you can find
the regulations.
Chinese laws on education
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Education Law, 1995
Vocational Education Law, 1996
Higher Education Law, 1998
Law for Promoting Private Education, 2002
Regulations on Academic Degrees, 1980, amendment
2004
General laws
 Contract Law
 applicable to contracts signed between foreign educational
institutions and Chinese educational service institutions.
 Civil Law
 applicable to the civil relationships between students and
educational service providers.
 Administration Law
 applicable to the legal relationships between educational
service providers and government authorities
 Other domestic laws
 Tax Law, Intellectual Property Rights Law…
Legislation vs. Government
mandates
 Despite of the improvement of legal system on
education
 Government mandates are commonly used in
education administration
Finnish legislation
 Finnish HEIs are allowed to charge tuition fees for degree education
from students coming outside the EU or EEA under two conditions:
 The 2007 Amendments to both the Universities Act (1997/645) and
the Polytechnics Act (2003/351) allowed Finnish HEIs to charge fees
for their degree education programmes when the fees are paid by a
third organisation rather than individual students, called the “made
to order” (in Finnish tilauskoulutus) model.
 According to the new Universities Act (558/2009) and the additional
Amendments to the Polytechnics Act (2003/351) both effective from
the beginning of 2010, Finnish HEIs are able to charge tuition fees on
a five-year trial basis for separate Master’s programmes from foreign
students, provided that the arrangements include a scholarship
scheme.
What can and cannot do?
Location of Finnish Providers
Location of Chinese Students
China
Finland
Model 3 and Model 4
Model 1
CFCRS (one campus model) Distance education
Individual Finnish experts
China
teaching or provider
educational services in
China
How can Finnish institutions
collect fees from students or
clients?
CFCRS (two campus model)
Model 2
Students will study on both the Students study in Finland
Finland local campus in China and the
Pilot MA programme
campus at the Finnish
Contracted degree education
institution.
Professional degree
education
Non-degree/short term
training
Further readings
 Cai, Y. (2011). Cross-border higher education in China and its implications for
Finland. In Y. Cai & J. Kivistö (Eds.), Higher education reforms in Finland and
China: Experiences and challenges in post-massification era (pp. 245-260).
Tampere: Tampere University Press.
 Cai, Y., Hölttä, S., & Lindholm, N. (2012) Developing offshore education in
China: A perspective from Finland. CEREC Working Paper Series No.1.
Tampere, Finland: Chinese Education Research and Exchange Centre,
University of Tampere.
http://www.uta.fi/jkk/cerec/publications/workpaper/CEREC%20Working%20P
aper%201.pdf
 Cai, Y., Hölttä, S., & Kivistö, J. (2012). Finnish higher education institutions as
exporters of education--are they ready? In S. Ahola & D. Hoffman (Eds.),
Higher education research in Finland: Emerging structures and
contemporary issues (pp. 215-233). Jyväskylä: Finnish Institute for Higher
Educational Research, University of Jyväskylä.
 Thank you!