Chapter 37 2. Education - China's future hope

Although in China, education is a public service project, due to the lack of funds and technology, China's education industry has not been able to perfectly realize its social welfare principles, thus providing the best opportunity for the industrialization of education . Topic introduction: A business that is sure to make money without losing money - China's education has a worry-free future If you want to find an industry in China that will never be affected by the financial crisis, it must be education. I don’t know if you have noticed that whenever the economy is in recession, the number of people who go to various study classes and postgraduate classes always doubles, and when we stand on another level, we can discover this characteristic of the education industry even more.

In 2008, there were 18 disclosed investments in the education industry in China, and the total amount of funds disclosed was as high as US$285 million. Perhaps this number is not surprising, but we must figure out one thing, that is, under what circumstances this number was generated. Under the general situation of economic recession, any kind of investment means great risk, so these professional investors who hold a lot of money choose to inject such a huge cash flow into Chinese education at such a time of turmoil. It seems that this industry is regarded as a natural harbor to avoid financial turmoil.

There is only one reason for this situation. The particularity of China's education market has made this industry a blessed place where profits are guaranteed. Although in China, education is a public service project, due to the lack of funds and technology, China's education industry has not been able to perfectly realize its social welfare principles, thus providing the best opportunity for the industrialization of education . In addition, China's unique education system makes this industry have broad prospects for development. As we all know, for Chinese children, they are tied to the track of exam-oriented education from birth, and their life trajectory is largely restricted by early education. When the competition is fierce, the opportunities for China's education industry become more and more obvious.

Because of this, China's education industry will continue to develop no matter whether it is in a high tide or a low economic development. According to statistics, in 2007, the total value of China's education market grew to 143 billion US dollars. According to this growth rate, it is estimated that before the arrival of 2010, the compound growth rate of the education market will reach 12%. The scale is conservatively expected to reach 200 billion US dollars. For a $200 billion industry, it seems we don't have to worry about investors at all. For Chinese parents, they absolutely do not hesitate to spend most of their family income on educating their children. According to a survey report conducted by Beijing Normal University, as early as 2006, the proportion of education expenditure in urban household income It has reached 24%, and the rural areas have exceeded 20%.

More importantly, for consumers of educational services, almost all transactions are in cash, and there are very few cases of arrears. Therefore, in this regard, the cash flow of education is enough to make many industries envious and jealous . In addition, the education industry has also benefited a lot from the country's industrial revitalization plan. On November 26, 2008, the Ministry of Education made a decision to use most of the 4.4 billion yuan it received from the central government’s 100 billion yuan in new investment in the fourth quarter for infrastructure, while the state’s profits and taxes for education investors Preferential policies also constitute a favorable factor for the development of this industry.

The favorable prospect of the education industry is like a big gold mine presented to investors. However, it still takes a lot of thought to return from this gold mine. If we say that the risk of the IT industry lies in technology, and the risk of the chemical industry lies in the exhaustion of resources, then the risk of the education industry lies in the adjustment of national policies. As we all know, according to the provisions of the "Education Law", in the field of compulsory education, no organization or individual is allowed to run schools or other educational institutions for profit. Such a policy has made the market of the education industry unable to Maximization can only be achieved in a few small markets such as vocational education, specialized training, and educational products. However, if the country is based on the factors of people’s livelihood, it will expand the section of compulsory education to both ends—for example, the preschool Education and high school education are also included in the compulsory education track, so for the education industry, it will undoubtedly be another market shrinkage.

However, despite such risks, under the general trend of economic downturn and population growth, the education industry is still an industry that deserves the attention of investors and the industry that practitioners should pay attention to. No matter what judgment we make, a little The iron-clad fact is unalterable - among the top ten industries tending to develop, the growth prospect of the education industry is the most impressive.