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School closures: Is the ESL market shrinking?
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Blingcosa



Joined: 17 May 2008
Posts: 146
Location: Guangdong

PostPosted: Thu Jul 02, 2015 1:56 pm    Post subject: School closures: Is the ESL market shrinking? Reply with quote

In the last year or so, several schools have closed in my city. One an International School, one was a language mill, another did corporate training, and a large children's chain school pulled out of the city.

Now as I near the end of my contract, I am looking at jobs and salaries, and I think, although my salary has increased in the last 5 years, wages have remained the same across the board.

Japan used to be the country to go and teach English, but the market shrank, and wages haven't moved in over a decade. Then it was Taiwan, then South Korea. Taiwan moved most of its manufacturing to Mainland China. Korean salaries have stopped increasing, and China became the place to be.

It seems like there is a certain stage in a country's development, when industry really takes off, foreign corporations move in, the locals develop aspirations, and the ESL industry booms.

Labour prices have risen for locals in China, but there is little new opportunity here. Manufacturers are starting to build factories in cheaper countries. Will the ESL industry go with it?

These are not hard facts, just my own observations. Maybe I'm totally wrong. I know I can trust you guys to correct me. Please convince me I can stay in China for the rest of my tsingtao-swilling, baozi-munching, meinv-chasing life.
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jimpellow



Joined: 12 Oct 2007
Posts: 913

PostPosted: Thu Jul 02, 2015 9:51 pm    Post subject: Reply with quote

Interesting. Thanks for sharing.

I don't think it is a matter of demand. It still seems quite strong and is reported to be growing.

I would think that the increasing difficulties to retain and recruit ESL teachers is part of the reason. Not to mention the overall cost of employing them is much higher than before, mainly due to the high overhead of the social tax.

It seems that the online industry is exploding in China and that may be a reason too. I guess its possible too that the government closed down one or two illegally operating ones.

Hard to say where the industry will go as the government is so unpredictable. Before the changes over the last few years a government VIP announced that the upcoming changes would attract more teachers as China had a demand for 100plus thousand ESL positions and only 30 thousand filled positions. Now that a year has passed since all of the actual changes have settled, they have already managed to lose 30%.

I actually wonder when they really mangle it if they will attempt to basically nationalize ESL. That is how it was when I applied to teach in China in 1989 (then tank man suspended the program) and the powers-to-be in Wuxi intended to do that when I worked nearby eight years back.

It will be good for some of those on this list to toughen them up if they go that route. I foresee cuts in salary and ESL teachers living 6 to a room with no AC or heating. Morning reveille will be at 5am followed by calisthenics and running around the school carrying the Chinese flag. All will be worth it due to the free Chinese lessons.

So one way or another you will be set. Wink
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hdeth



Joined: 20 Jan 2015
Posts: 583

PostPosted: Fri Jul 03, 2015 12:35 am    Post subject: Reply with quote

With how horrible Chinese management skills are, I'm kind of surprised any business lasts here.

I think China still has a lot of room for growth. I'm not sure it will mirror what has happened in Japan, Taiwan, or Korea due to the enormous population difference. Also, China is just starting to get into more high tech areas. I think there are many years left here.
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GreatApe



Joined: 11 Apr 2012
Posts: 582
Location: South of Heaven and East of Nowhere

PostPosted: Fri Jul 03, 2015 12:39 am    Post subject: Reply with quote

Interesting post, and you all raise some good questions.

I saw this on QQ International today:

http://www.chinadaily.com.cn/china/2015-07/03/content_21169330.htm

The last bit on page 1 interested me most:
Quote:
The 2014 English Proficiency Index, compiled by Education First, a global English-language education company, estimated that the market for English teaching in China is worth about $7.5 billion a year. The index classified proficiency in English among Chinese people as "low", and China was ranked 37th out of the 64 countries in the list where English is not the mother tongue. By contrast, South Korea was ranked 24th, while Japan was 26th.

I think China will continue to compete regionally and Internationally in the coming years, especially with so many new Economic and Financial programs coming into play: 1 Belt 1 Road, APEC, AIIB, etc., and as the Chinese economy reportedly moves from manufacturing and production-based to more "innovation and consumer-driven." The focus may shift even more as it is with the GaoKao where "Communication" is emphasized rather than grammar and textbook learning, although that's been the case for quite awhile now. I'm seeing this in my Business English classes and, all over, really.

Most of my students, even my V.I.P. students (for IELTS, SAT and TOEFL), want to spend more time interacting verbally with a foreigner, rather than studying how to take a test, or working on specific Reading, Writing, Listening skills ... they can (largely) do that on their own, but when it comes to having a conversation, this is often seen only as "authentic" if a student is actually practicing with a foreigner.

It works fine with me because it largely means that gone are the days of pouring over textbooks, units and lessons and, now, I'm becoming more of a voice, pronunciation, speaking and conversation teacher, no matter what level or class I'm teaching. It's easier and yet you can adapt your teaching to each individual students' needs and make corrections as you go.

I also enjoyed reading the above article because it talked about the English Weekly which I am seeing more often now as opposed to when I came to the PRC in 2010. I find that paper very useful and spend a good deal of my time at the I.S. where I work just breaking down problem areas that my students have on questions about. I just need to find a way to subscribe or otherwise get my hands on the English Weekly as soon as it comes out, rather than waiting for my students to give me a copy. That way, it's a bit like a textbook and you can prepare lessons or examples around the problem areas, help your students, and also know that you're helping them for if / when they take the GaoKao.

Lastly:
Quote:
the market for English teaching in China is worth about $7.5 billion a year.

I hadn't realized that number was quite so big, but it doesn't really surprise me. Add to that the fact that China is running 37th out of 64 countries (the middle of the pack) in English proficiency and there's lots of room for improvement, obviously.

That's GOOD NEWS, people! There's still money to be made! Laughing

CHEERS.

--GA

EDIT: for grammar and spelling


Last edited by GreatApe on Fri Jul 03, 2015 1:02 am; edited 3 times in total
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Simon in Suzhou



Joined: 09 Aug 2011
Posts: 404
Location: GZ

PostPosted: Fri Jul 03, 2015 12:48 am    Post subject: Reply with quote

While salaries for ESL teachers have stagnated over the last 5 year or so, it's hard to make too many judgments on the industry based on a few anecdotal closings around you. Heck, the businesses on my block close and re-open with new, eager dreamers every 4 months. It has little to do with the economy or the market and A LOT to do with there being a whole lot of people who are crap at running a business.

The economy in China is at an interesting point right now. Things could nosedive or they could remain about the same. If there isn't a massive collapse, which I don't foresee as the govt will rig things and prop things up to keep it going, then there will be plenty of people with money who are eager to learn English.

I don't agree that there aren't business opportunities here for Chinese people because manufacturing may be going elsewhere. I'm not sure having cheap-labor factories is what drives the ESL market. Chinese people love to consume and there is a pretty strong middle class doing so now. It's a HUGE domestic market. Chinese people believe heavily in education as an investment for their future, and there is no shortage of people who want their kids to study abroad at some point. The only thing I see changing this is a massive anti-west turn by society because of international issues.
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GreatApe



Joined: 11 Apr 2012
Posts: 582
Location: South of Heaven and East of Nowhere

PostPosted: Fri Jul 03, 2015 1:11 am    Post subject: Reply with quote

Simon in Suzhou wrote:
Quote:
Chinese people love to consume and there is a pretty strong middle class doing so now. It's a HUGE domestic market. Chinese people believe heavily in education as an investment for their future, and there is no shortage of people who want their kids to study abroad at some point. The only thing I see changing this is a massive anti-west turn by society because of international issues.

I agree. Couple all of that with the number and popularity of university options available overseas, the staggering number of graduating students in China each year, the job market and a lack of quality universities in China (versus population size) at the moment, and it all adds up to "more English," IMO.

In the city where I live, there's only ONE really quality university and the students here still look down on the university as opposed to the larger, more recognized Chinese universities such as Beijing, etc. Students and parents realize their quality education options in China are limited, so they branch out.

Plus, English is the International language of Business. As China grows and continues to compete with countries like India (and others) who have better English skills nationally, I think the market will remain strong.

But as others have pointed out, a lot of it depends on the Chinese economy as we move forward toward 2016 and the future.

--GA
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Angel.Ro



Joined: 09 May 2015
Posts: 59

PostPosted: Fri Jul 03, 2015 2:28 am    Post subject: Reply with quote

jimpellow wrote:


It seems that the online industry is exploding in China and that may be a reason too. )


Could you expand on that a bit? By online do you mean schools are having students "teach themselves" through online programs etc?
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kungfuman



Joined: 31 May 2012
Posts: 1749
Location: In My Own Private Idaho

PostPosted: Fri Jul 03, 2015 6:15 am    Post subject: Reply with quote

My school - a pseudo international school - is run by a group of investors that have no background in education or business management at all. My boss's sole claim to being a manager qualified at bossing foreigners is that he went to school in Canada for a couple semesters.

The school has the worst educational qualifications I have ever seen in my life.

Their motto seems to be is the top 9 out 10 priorities is to see how much they can rip the parents off for.

The students parents pay over $12000 usd a year for school and are totally cheated.

In all honesty if China had any educational standards this school should have been closed down.
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hdeth



Joined: 20 Jan 2015
Posts: 583

PostPosted: Fri Jul 03, 2015 7:06 am    Post subject: Reply with quote

Hah, my school charges $30k+ per year and is in the same situation. Your boss could learn something from mine.

The parents do it primarily so their kids don't have to take the gaokao I think, and have more of a shot at getting accepted at a western uni. Maybe also just to get the kids out of their hair during the work-week.

Apparently every 4-5 years they get some curriculum designer to come in and organize things (starting that next year) but then the retention rate for teachers is so bad that it all kind of goes away within a couple of years and ends up basically as a giant training center.
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MESL



Joined: 23 Aug 2003
Posts: 291

PostPosted: Fri Jul 03, 2015 9:59 am    Post subject: Reply with quote

China has 1.3 billion people. You will always have a job here. I'm not as concerned about the job market as I am the government response to the job market. As in other countries, government regulation has gradually increased. Credentials are higher and visa applications are under more scrutiny. When I came to China 12 years ago, a foreign teacher at a university in a medium sized town made 4000 yuan - twice my department chairman, more than the university president. Now, the same school is advertising 6500-7500 yuan. I'm not as concerned about salaries as I am inflation. A trip from that same town to the capital was 75 yuan, now 100. A carton of yogurt several years ago was 8 yuan, now 14.
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jimpellow



Joined: 12 Oct 2007
Posts: 913

PostPosted: Fri Jul 03, 2015 2:59 pm    Post subject: Reply with quote

Angel.Ro wrote:
jimpellow wrote:


It seems that the online industry is exploding in China and that may be a reason too. )


Could you expand on that a bit? By online do you mean schools are having students "teach themselves" through online programs etc?


There are more Chinese online schools such as EnglishTone. Traditional brick and mortar schools in China are creating online divisions. More remote virtual classroom based companies are being established including an American one I know of that teaches full prep high school courses.

One of the main reasons I stay on this board, despite having left China three years ago, is to consult/help a friend who is going to launch a rather major virtual classroom company for the Business English market in China.
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wangdaning



Joined: 22 Jan 2008
Posts: 3154

PostPosted: Fri Jul 03, 2015 11:43 pm    Post subject: Reply with quote

MESL wrote:
When I came to China 12 years ago, a foreign teacher at a university in a medium sized town made 4000 yuan - twice my department chairman, more than the university president. Now, the same school is advertising 6500-7500 yuan. I'm not as concerned about salaries as I am inflation. A trip from that same town to the capital was 75 yuan, now 100. A carton of yogurt several years ago was 8 yuan, now 14.


This is a joke right? A transport increase of 25 yuan is about the only thing that makes sense.
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Angel.Ro



Joined: 09 May 2015
Posts: 59

PostPosted: Sat Jul 04, 2015 2:05 am    Post subject: Reply with quote

jimpellow wrote:
Angel.Ro wrote:
jimpellow wrote:


It seems that the online industry is exploding in China and that may be a reason too. )


Could you expand on that a bit? By online do you mean schools are having students "teach themselves" through online programs etc?


There are more Chinese online schools such as EnglishTone. Traditional brick and mortar schools in China are creating online divisions. More remote virtual classroom based companies are being established including an American one I know of that teaches full prep high school courses.

One of the main reasons I stay on this board, despite having left China three years ago, is to consult/help a friend who is going to launch a rather major virtual classroom company for the Business English market in China.


That's interesting. It sounds like the projections that "47% of jobs will be cut due to technological advancements" will affect the ESL industry as well
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hdeth



Joined: 20 Jan 2015
Posts: 583

PostPosted: Sat Jul 04, 2015 2:59 am    Post subject: Reply with quote

Angel.Ro wrote:

That's interesting. It sounds like the projections that "47% of jobs will be cut due to technological advancements" will affect the ESL industry as well


It might work OK for one-on-one or small groups, but teaching a larger class (which is what most ESL jobs are) is very awkward long-distance. I've done a few long distance classes for a charity project my school is involved in and it doesn't work very well. For really low level students, with a structured environment, and cooperation from the host school, possibly...but then there's still the brick-and-mortar element.
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jimpellow



Joined: 12 Oct 2007
Posts: 913

PostPosted: Sat Jul 04, 2015 5:10 pm    Post subject: Reply with quote

wangdaning wrote:
MESL wrote:
When I came to China 12 years ago, a foreign teacher at a university in a medium sized town made 4000 yuan - twice my department chairman, more than the university president. Now, the same school is advertising 6500-7500 yuan. I'm not as concerned about salaries as I am inflation. A trip from that same town to the capital was 75 yuan, now 100. A carton of yogurt several years ago was 8 yuan, now 14.


This is a joke right? A transport increase of 25 yuan is about the only thing that makes sense.


I am glad he gets it about inflation. Many people do not - in many countries. My dad did fairly well when he worked and has about 500k stashed in the bank. He gets a special interest rate due to the amount of about 1%. He thinks he is fine as the US government consistently declares that inflation is negligible. But of course they are playing a game of changing how they measure it. Using how they measured inflation all the way through the 1970s, inflation has been running about 6% with housing, 9% without. It doesn't take long with compounding until the actual purchasing power of that money is halved.

China plays the same game. Real inflation for a non housing purchaser in China is said in reality to be running about 5-6 percent per year. You would need an increase in salary of about 50% every 5 years just to stay at the same level. Then of course with more jurisdictions in China levying income tax on ESL teachers, a social tax (albeit refundable) on the teachers of 11%, and indirectly taxing teachers with a whopping 35% or so social tax on the schools, and you can see how an ESL teacher in China has to find a way up the food chain or will be increasing pinched.

The comment about brick-and-mortar schools always being needed in China I agree with and there is nothing like interacting with others to learn a language. I just think with time remote learning in the Chinese market will really take off with the quality control issues within China and the seeming increasing inability of the PRC to recruit and retain enough qualified teachers.
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