Foreign Investment Opportunities in Tianjin’s Growing Education Industry
Tianjin is expected to be the fastest-growing city in China, according to Oxford Economics’ report. In 2014, Tianjin’s GDP reached RMB 1.57 trillion (US$250 billion), up 10 percent from the previous year and significantly outpacing the 7.4 percent national increase. The service sector contributed approximately 50 percent to the city’s GDP last year, and Tianjin’s education services sector is fast becoming a driving force for foreign investment in the city.
Market Size and Future Trends
According to a report released by the Tianjin Municipal Education Commission, over 15,000 international students had studied in Tianjin by the end of 2010 – the third most in China. A total number of 62 Sino-foreign cooperative educational institutions/programs have been established in the city. The city has eight major international schools including Wellington College International Tianjin. It is expected that, by the end of 2015, the number of international students in Tianjin will exceed 25,000. Today, many well-known universities in Tianjin, such as Nankai University and Tianjin University, offer education programs for international students.
China officially implemented a new FTZ in Tianjin in April this year, aiming at further opening up its service sector. Interestingly, the restrictions on the education industry have been lifted, specifically:
- Foreign entities are encouraged to set up non-academic vocational training institutions.
- Foreign entities are allowed to set up international schools that enroll international students.
- Foreign entities may establish and operate educational institutions that mainly enroll Chinese nationals in cooperation with a Chinese party, under the following conditions:
- Education must be unrelated to the military, law enforcement, politics or political parties;
- Foreign entities may not provide religious education; and
- Regular high schools, tertiary education institutions and pre-schools must be led by the Chinese party, meaning that the principal or main administrator must be a Chinese national and be domiciled in China; the board of the school must have a Chinese majority and the education program must be in line with Chinese law.
Foreign entities are free to invest in intermediary service institutions for self-financed foreign study, as well as international education consultancies.
Set-up Procedure and Special Requirements
Foreign entities seeking to set up educational institutions in China are required to obtain pre-approval from the local government, China’s Ministry of Education, or the Ministry of Public Security. Investors also need to meet specific criteria and submit relevant documents upon the application. The set-up procedure of an educational institution can be very complicated and varies depending on the type of the educational institution.
For instance, for foreign entities looking to set up an education consultancy that provides language training courses and helps international students apply for overseas universities, they must take the following steps:
Step 1. Apply to the local education department
Step 2. Obtain approval from the local police
Step 3. Complete the enterprise registration procedures at the local Administration for Industry and Commerce (AIC) and change the business scope
Step 4. File with the Exit-Entry Administration Bureau of the local Public Security Bureau
In step 1, the applicant needs to report to the education department with their business scope, office address, staff member, capital contributions and other relevant information. They are also required to establish a stable and cooperative relationship with overseas educational institutions.
Case Study – INTO and Nankai University
One example of a foreign firm that has successfully invested in Tianjin’s education industry is INTO. INTO has a partnership with Nankai University in Tianjin which allows Nankai to focus entirely on academic delivery. INTO complements the university’s academic excellence in the classroom by identifying and nurturing student demand globally and delivering student support services on campus.
INTO’s MBA program at Nankai University is designed specifically for the purpose of preparing future global leaders with specific knowledge of China. As China has become a magnet for global business, job opportunities are becoming more abundant and diversified every year. Even a brief period of study in China is certain to be valuable to a career in many different fields. For this reason, there are many opportunities for foreign investors in Tianjin’s growing education industry.
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email email@example.com or visit www.dezshira.com.
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