Director: Daniel C. Levy

New Law Promotes Incentives in Chinese Private Institutions

PROPHE Summary (by Yingying Xu):
China's National People's Congress approved a new law in December 2002 that promotes Chinese private education development, including at the higher education level. It gives private institutions privileges and favorable policies enjoyed by their public counterparts, including tax and other financial benefits. The law's most important measure may be its approving and legitimizing of reasonable financial returns from establishing private institutions. The law reflects a growing conviction that China needs to rely more on private higher education, instead of simply public higher education.

For the full story (shown with permission) see the Chronicle of Higher Education, February 14, 2003. "Private Universities May Profit in China."
http://chronicle.com/free/v49/i23/23a04103.htm
For more on the new law, see the International Higher Education, Spring 2003, "China's New Private Education Law," by Fengqiao Yan and Daniel Levy.
http://www.bc.edu/bc_org/avp/soe/cihe/newsletter/News31/text005.htm

PROPHE Observation (by Daniel C. Levy):
The growth of Chinese private higher education has been spectacular in the last twenty years but until now the legal status of private institutions remained ambiguous, as in often the case where countries experience rapid and largely unanticipated growth. The new law reflects China's overall market inclinations, including receptivity to private initiative. At the same time, even the new law leaves several public policy issues unresolved and subject to further interpretation.