Problems in the Chinese educational system, especially in respect to the policy of “commercialization of education,” are a hot topic. China’s Ministry of Education has denied that it ever supported the policy. It is worth noting that Vice-Minister Zhang Baoqing, considered a representative of the minority opinion within the ministry, recently openly acknowledged, “in some localities, leaders and scholars do hold the view that education should be commercialized.” This is the first time that a high-ranking official of the Ministry of Education acknowledged that the view has support among Chinese bureaucrats.

Zhang made the above statements when answering questions of online users on September 2. He added, “I found that some localities have sold good middle and high schools to private citizens in the name of economic reforms. I am strongly opposed to the practice.”

Zhang reiterated, “Our ministry has been strongly against the commercialization of education, because education is the most important area in which social equality can be demonstrated and is a noble public service. We must provide educational opportunities to anyone who wants to receive it. The commercialization of education has violated our fundamental goals and will destroy education. We should never do it.”

In the first press conference of the State Council in 2004 held on January 6, Zhou Ji, the Minister of Education, also talked about the ministry’s opposition to commercialization of education. He said, “The Chinese government has never had a policy of commercialization of education and we must make sure that education remains a public service.”

Actually, there is still no consensus among Chine elites about what “commercialization of education” means. As a result, opponents and proponents are talking over each other. Han Jichi, a scholar in the Chinese Air Force Political Academy in Shanghai wrote in an article Exploring Commercialization of Education that commercialization of education means respecting natural laws of a market economy, i.e., business-style management, market-oriented operations, and commercially viable products. Strictly speaking, though, Han’s views do not represent official opinions of the Ministry of Education.

Some think that the commercialization of education was encouraged by the document, “Decision to Accelerate Service Industries” issued on June 16, 1992, by the Communist Party Central Committee and State Council which directed that most welfare, public service, and government service providers should transition to businesses managed like enterprises. Yet Li Lanqing, Vice-Premier in charge of education, later clearly decreed that education, especially basic education, must remain a public service.

Observers said that the recent debates on “commercialization of education” has to be related to Chen Zhili, former Minister of Education and State Council member in charge of education. “A plan for reviving education to face the twenty-first century” spearheaded by Chen clearly stated that new high-tech commercialization of Chinese universities and colleges is one of the goals of Chinese education up to 2010.

Illegitimate education-related fees in various localities have also fueled the debate. In 2002, several government agencies formed joint audit teams to audit 150 elementary and secondary schools in Shanghai and found 72,400,00 yuan (about US$9 million) of the fees paid by students’ families that were not collected according to laws and regulations. The teams confiscated 11,260,000 yuan (US$1.36 million), ordered refunds of 11,800,000 yuan (US$1.4 million), and froze the remaining assets. Illegitimately collected fees are indeed a big problem in all parts of China.

Land grabbing is yet another controversial phenomenon that has emerged from the commercialization of Chinese education. In order to raise funds, many universities in China have recently been resorting to developing “university towns,” where both students and faculty can live together. However, many of these projects have financial irregularities. The Oriental University City in Langfang, Hebei province owed a scandalous 2.2 billion yuan (US$265.6 million) in debt. It’s worth noting that Jiang Zemin, the Communist Party Military Chief and Chen Zhili’s former boss, as well as an alleged advocate of commercialization of education, wrote the text for the plaque displayed at the university town.

Since the beginnings of its economic reforms, the Chinese government has lacked resources for education. “The Chinese Social Strata Research Group” at the Chinese Academy of Social Sciences recently published a report entitled “Social Mobility in China,” which pointed out that educational equality in China had been deteriorating. Since the 1990s China has aimed to increase the percentage of GDP used for education and to reach 4 percent by the end of last century. The goal was never reached and the percentage actually decreased initially. The percentage went as low as 2.44 percent in 1996 and recovered to 3.41 percent in 2003, which is still lower than that of underdeveloped countries.

Even the paltry educational spending is distributed very unevenly and irrationally between rural and urban areas, resulting in further losses of educational opportunities among those who live at the bottom of society. Statistics show that in 2002 the government’s total educational investment was 580 billion yuan (US$ 70.03 billion), 77 percent of which was used in urban areas, where less than 40 percent of the Chinese population resides. The rural areas with over 60 percent of the population only received 23 percent of the educational investment.

Different localities have widely different abilities to spend in the current system of education funding and education cost sharing.