CHINA (PRC FIRMS): An Introduction to Private Equity: Buyouts & Venture Capital Investment
PE/VC Investment in the Education Sector of China – Significant Industrial Policy Changes Bring Both Challenges and Opportunities
中国教育领域PE/VC投资—产业政策的重大变化所带来的机遇与挑战
Although COVID-19 has continued to affect the Chinese economy, investment has generally returned to pre-COVID-19 levels, even booming in the first half of 2021. In the education sector, 2021 witnessed the most significant policy changes that affected investment and are expected to continue doing so. We are of the opinion that although PE/VC funds focused on the education sector are facing challenges, the education sector of China remains attractive for investment.
2021年，尽管COVID-19持续影响中国的总体经济，但投资活动已总体恢复到COVID-19前的正常水平，甚至在上半年出现了蓬勃发展之态。在教育领域，2021年见证了影响并将持续影响投资趋势最重大的政策变化。我们认为，尽管专注于教育领域的 PE/VC基金正在面临挑战，但中国的教育领域仍然具有吸引力。
Private and Foreign Investment in Privately Run Compulsory Education Schools and Off-Campus Curriculum Course Tutoring are Prohibited
禁止外资投资民办义务教育学校和校外学科类培训机构
Although the “Law on the Promotion of Privately Run Schools” (revised in 2018) has been in effect for almost three years, the “Regulations for the Implementation of the Law on the Promotion of Privately run Schools” (hereinafter the “implementation regulations”) was released on 7th April 2021 and came into force on 1st September 2021. The implementation regulations repeat the principle that compulsory education (meaning ages 6-15) must not be run by profit-making entities.
虽然《民办教育促进法》（2018年修订）已经生效近三年，但《民办教育促进法实施条例》（“《实施条例》”）是在2021年4月7日才发布，并于2021年9月1日起施行。 《实施条例》重申举办义务教育（即1-9年级）不得以营利为目的的原则。
The General Office of the CPC Central Committee and the General Office of the State Council released the “Opinions on Further Reducing Students’ Homework Burden and Off-campus Tutoring Burden During Compulsory Education Stage” (hereinafter the “dual reduction opinions”) on 24th July 2021 which contain extensive and clear-cut prohibitions, restrictions and guidelines on off-campus tutoring services, in particular off-campus tutoring services for students in compulsory education.
中共中央办公厅、国务院办公厅于2021年7月24日公布了《关于进一步减轻义务教育阶段学生作业负担和校外辅导负担的意见》（下称“《双减意见》”），对校外辅导尤其是1-9年级学生的校外辅导，作出了广泛而明确的禁止及限制。
The dual reduction opinions emphasise the non-profit making nature of off-campus tutoring services to students in compulsory education and prohibit any investment and fund-raising activities by entities that provide off-campus curriculum course tutoring services to students in compulsory education (hereinafter the “curriculum course tutoring providers”). Curriculum courses include Literature, Mathematics, English, Japanese, Russian, Physics, Chemistry, History, Biology, Geography, etc.
《双减意见》强调1-9年级学生学科类培训机构属于非营利性质，对开展针对1-9年级学生校外学科类培训机构（以下简称“学科类培训机构”）的投资、募资活动作出禁止性规定。学科类课程包括文学、数学、英语、日语、俄语、物理、化学、历史、生物、地理等。
Specifically, curriculum course tutoring providers must all be registered or restructured as non-profit making entities and may not be listed on the stock market or engage in similar capital-raising activities. Listed companies may not raise funds from the stock market for the purposes of investing in curriculum course tutoring providers or acquiring curriculum course tutoring providers. Foreign investors may not acquire or invest in curriculum course tutoring providers, whether by take-overs, franchising or contractual control via VIE structures. Furthermore, curriculum course tutoring providers are prohibited from providing tutoring sessions on weekends or public holidays. All existing curriculum course tutoring providers are also required to take actions to comply with the aforementioned restrictions.
具体而言，学科类培训机构必须全部登记为非营利性机构，且不得上市或进行类似的融资活动。上市公司募集资金不得用于投资、收购学科类培训机构。外国投资者不得通过收购、特许经营或通过 VIE结构协议控制的方式收购或投资学科类培训机构。此外，学科类培训机构不得在周末或法定假节日提供学科类培训。所有现有的学科类培训机构也必须采取行动以遵守上述限制。
Non-Curriculum Off-Campus Training and Education Technology Businesses are Encouraged
鼓励开展非学科类校外培训
As a result of the restrictions of the dual reduction opinions, investment in start-up companies that may be categorised as curriculum course tutoring providers dropped to the lowest level of the past decade. Nonetheless, we believe that the education sector of China remains attractive for investment in light of the overall national policy. For example, the three-child policy has been formally recognised by the Decision of the Standing Committee of the National People’s Congress on Amending the Population and Family Planning Law issued and coming into force on 20th August 2021.
由于《双减意见》限制，对可被归类为学科类培训机构的创业公司投资降至过去十年的最低水平。尽管如此，我们相信，从国家的整体政策来看，中国的教育行业仍然具有一定的投资吸引力。比如，全国人民代表大会常务委员会关于修改《人口与计划生育法》的决定发布并于2021年8月20日生效，正式确认了三胎政策。
For example, the restrictions of the dual reduction opinions do not apply to non-curriculum off-campus training such as physical training, arts (music or fine arts), and information technology courses. Furthermore, the dual reduction opinions encourage schools to introduce non-curriculum off-campus training providers to participate in and assist with after-school on-campus training for students.
例如，体育、艺术（音乐或美术）、信息技术课程等校外培训就不受《双减意见》限制。 与之相反，《双减意见》鼓励学校引入校外培训机构参与或配合对学生开展校外培训。
Also, vocational education schools and adult training businesses are encouraged for investment. Vocational education refers to education activities that primarily aim to train students for specific work such as technicians, mechanics, etc.
此外，还鼓励投资职业教育学校和成人教育培训企业。 职业教育是指以培养学生从事某一特定工作或职业以专门知识和技能为主要目的的教育活动，如技工、机械师等。
Additionally, the implementation regulations stipulate that the state encourages privately run schools to provide educational activities using internet online technology and apply information technology to enhance efficiency and quality. The dual reduction opinions also mention that artificial intelligence is encouraged to be actively explored so as to reasonably control online class duration for students.
除此之外，《实施条例》还明确规定，国家鼓励民办学校利用互联网信息技术开展教育活动，运用信息技术提高办学效率和质量。 《双减意见》还提到，鼓励积极探索人工智能技术，合理控制学生在线上课时长。
On-line education providers are required to ensure data privacy and cybersecurity compliance
在线教育提供者应当遵守信息隐私和网络安全的规定
Along with the broader application of internet technology in education, data privacy and cybersecurity are also becoming more important. The implementation regulations require that online education activities based on internet technology must comply with the laws and regulations applicable to internet administration and that schools using internet technology must establish and implement cybersecurity mechanisms and technical measures to prevent data leakage or unauthorised release.
随着互联网技术在教育活动中的应用日益广泛，数据隐私和网络安全问题变得越来越重要。《实施条例》要求，依托互联网技术开展在线教育活动，应当遵守互联网管理的法律法规。学校应用互联网技术，应当建立和落实网络空间安全保障机制和技术措施，防止数据泄露或者擅自发布。
Relevant laws and regulations include (a) the Data Security Law which came into force on 1st September 2021, (b) the Personal Information Protection Law which was issued on 20th August 2021 and will come into force on 1st November 2021, (c) the Cybersecurity Law which came into force on 1st June 2017 as well as the Measures for Cybersecurity Review released for review on 1st July 2021 and pending formal adoption.
相关法律法规包括（a）《数据安全法》，已于2021年9月1日生效；（b）《个人信息保护法》已于2021年8月20日通过，并将于2021年11月1日生效；（c）《网络安全法》已于2017年6月1日生效；以及《网络安全审查办法（征求意见稿）》已于2021年7月1日公布，目前仍在征求意见中。
It is therefore strongly advised that PE/VC funds contemplating investing in any online education companies (such as online art training, online coding training or online adult training) add into their due diligence process well-designed data privacy and cybersecurity compliance measures.
因此，我们建议 PE/VC在投资在线教育公司（例如在线美术培训公司，在线编程培训公司，在线成人培训公司）时，在尽职调查过程中加入数据隐私和网络安全方面的合规调查。
In conclusion, policy changes in the education sector of China continue to require close monitoring. PE/VC funds focusing on this sector or intending to do so are advised to consult professional attorneys to understand the current policies and any potential developments.
总之，中国教育部门的政策变化仍然需要密切关注。我们建议专注于这一领域或有意进入这一领域的PE/VC咨询专业律师，以了解当前政策和任何潜在的发展。