A director of studies (DoS) for a foreign education company in China contacted me today and we discussed the conundrum of college education, specifically English education, in China. I devoted part of chapter 9 in GWON to this segment.
His view was that there are indeed opportunities and reasons for why English learning should be encouraged, that professions that interface with foreigners and foreign companies need to be proficient in English. This is true, but the reality is that there are not that many positions that do this, perhaps just a few million such positions including notably the hospitality industry and IT off-shoring companies. For comparison there are approximately 300 – 390 million English language learners in China and roughly 600,000 – 650,000 foreigners permanently residing in China.1
This is not to say that students in China should not have the option to learn or should not be encouraged to learn other languages, such as English. Rather this is to say that learning English is no longer an end in itself. It is not a “get rich quick scheme” yet much of the marketing done in the segment continues to promote this view. Whereas 20 years ago being a fluent English speaker or an EFL company, may have been a very profitable profession and sub-industry, today it is quite competitive and very mature with salaries being arbitraged to international labor rates. Instead, learning English is just another tool for high-skilled workers, to interface with their international peers and colleagues. If you do not work in such a position or have such skills in the first place (e.g., semiconductor engineering) but instead interface solely with Chinese colleagues in China, you will likely have no additional monetary incentives for mastering a foreign language.
This ties in with the conversation with the DoS because he planned to give a presentation to several college groups about the utility of learning English. I had previously given a presentation last December (video) (slides) and discussed some of the challenges that college students currently face, including a skill-set gap that exists.
For example, according to the Los Angeles Times:
By some accounts, the unemployment rate for Chinese college graduates age 21 to 25 is 16%, nearly four times that of blue-collar workers. An Education Ministry survey of 500 firms found that employers had trimmed the number of jobs available for new hires this year by about 15%. In Beijing, an estimated 98,000 jobs are available for the 229,000 new graduates, a city education committee study found.
“The manufacturing sector is still seeing labor shortages,” said Geoffrey Crothall of China Labour Bulletin, a Hong Kong-based research group. But many college graduates in major cities are ending up taking poorly paid jobs in areas such as telemarketing or real estate sales, he said, “and often these wages are lower than a factory worker in Shenzhen.”
I have written about this skill-set mismatch several times before.2 It is currently exacerbated by social promotion within institutions (e.g., degree inflation) and will likely continue into the near future. One of the problems that the company the DoS represents is that the bulk of its operations is still geared towards traditional brick-and-mortar facilities. While it was not mentioned in the conversation, two years ago the company had intended to grow and open several hundred training centers on the mainland. This has not happened for several reasons:
- the EFL education tuition is unaffordable to most of the target audience (urban middle-class consumers)
- on top of inflation which erodes their purchasing power, a relatively “slow” economy has put pressure on wages of these working adults who have to cut back on services such as EFL education
- lack of a visible return-on-investment for most customers (i.e., after taking the courses it does not lead to instant seniority or new career opportunities)
However, there are other areas for businesses to expand, including the online sector, which is expected to grow by leaps and bounds. In fact, TutorGroup (which the DoS does not work for) just closed its Series B round of financing last month, raising $100 million to build out its online language education platform that targets (among others) Chinese seeking to learn English.
According to its write-up of the funding announcement, TechCrunch noted that:
TutorGroup says that it expects the adult English language-learning market within China to grow 25% annually and reach more than $21 billion by 2015. In China alone, the company expects sales to experience a triple-digit annual growth rate in the next few years.
According to Ambient, a competitor:3
China is now the top buying country of digital English language learning products, not only in the Asia region, but in the world, according to a new Ambient Insight report called “The 2013-2018 China Digital English Language Learning Market.” The five-year compound annual growth rate (CAGR) for digital English language learning products in China is 23.6% and revenues will nearly triple over the forecast period. […] Revenues for these products will spike to a breathtaking $931.8 million in 2018, up from the $323.1 million reached in 2013.
Thus, these two data points suggest that there may still be opportunities in the education and training segment, but likely in the online-only space an area that the DoS’ company is trying to rapidly expand (by opening up a new Boston office for freelance instructors).
What does this have to do with English-learning? I suspect that the online segment will likely benefit and recoup the costs of the investment due to the always-on nature of the urban consumer willing to try out one of these new platforms. Yet whether or not the language and educational knowledge transfers over and translates into higher productivity or more proficiency is another matter entirely.
The last example that ties into this is based on a conversation I had last November with a center manager at the same company that the DoS works at. The manager explained that the ayi (阿姨), an “auntie” custodian, at the headquarters office he worked in paid 20,000 RMB (~$3,400) to learn English through the company’s internal program. Less than six months later she was burned out due in part to the unrealistic expectations (i.e., “overpromised and underdelivered”) that is unfortunately the modus operandi that this segment in China still suffers from. This will likely change as the industry continues to mature, yet it would be in the students best interest to hear the challenges — in addition to the opportunities — that a second language can provide.
Tangential coda: in a slight twist, while English tutoring has been a relatively low-barrier to entry position in China, it looks as if Shanghai is now exporting math instructors to England.4 The UK is spending $18 million to fly 60 Chinese math teachers (proficient in English communication) to help improve the math abilities and scores of learners in England.5
- A census was conducted and the results were published 3 years ago, see Almost 600,000 foreigners counted in China from China Daily. Another unsourced estimate is that 80% of the approximately 650,000 foreigners in China work as teachers, see China Average Pay & Salaries For Expats & Foreign Teachers… from Salon [↩]
- Are MOOCs a solution for the skillset mismatch? and The market for massive open online courses in China [↩]
- China Digital English Language Learning Market Booming from PRNewswire [↩]
- See English tutors in China — well-paid, not always qualified from UPI and Shanghai teachers flown in for maths from BBC [↩]
- Chinese teachers sent into English schools to boost results from The Telegraph [↩]