Language Schools and Carpetbaggers

Danwei reports on the sudden closure of four language schools in China, which have left in their wake stranded students, unpaid staff, and bewildered joint venture partners:

In almost every case the founders and owners of the schools were foreigners who had been in China for over a decade, building up their businesses. They were not cowboy operators, but entrepreneurs who had based their lives in the country, owning property and sending their children to local schools. Now they have had to flee China abruptly, never to return.

Ken Carroll, Steve Williams and Brian McCloskey of Kai En left behind millions of renminbi of unpaid wages and unreimbursed tuition fees, as did Anders and Amy Johnson of World Link. Just one of Linguaphone’s six training centres had 4 million yuan of outstanding tuition on its books.

China has been seized with “English fever”, as the phenomenon is known in Chinese, ever since it started to open up its economy to the outside world in the late 1970s. Today, linguists put the number of Chinese now studying or speaking English at between 200 million and 350 million. English is the only foreign language tested in school, and the Chinese are unified in their belief that a good command of the language can have a transformative effect on your career, catapulting you towards wealth. One of the largest school systems with significant revenues from English learning, New Oriental, is traded on the New York Stock Exchange.

However, despite the phenomenal popularity of English lessons, the buzz inside the industry is over which school will be the next to go bust. Since the financial crisis, young workers have lacked cash for English lessons, and an increasing number may be wondering if it is worth reaching out to the West when China’s domestic market is booming.

See also an earlier Shanghaiist post about Kai En.