The Education Industry's WTO Commitments
A more liberal educational service trade was a promise China made upon its
entry into the World Trade Organization (WTO). WTO divides the service trade
into 12 categories -- one of them being educational service.
According to
the WTO "General Agreement on Trade in Services" (GATS), apart from educational
activities completely subsidized by the government, all educational programs
that charge tuition fees and have commercial purposes fall under the educational
service trade; all WTO signatory countries are entitled to compete to offer
educational services and organize various educational and training activities
via tele-education, launching wholly foreign-owned or joint-venture schools,
relaxing policies for studying abroad and the free flow of professionals.
WTO rules stipulate that "educational-service" related activities have
nothing to do with tariffs and trade barriers. The aim of such activities is to
encourage member countries to reform restrictive educational laws and facilitate
the educational service trade.
The educational service trade is carried out in four ways:
(1)
Cross-border supply. Educational service suppliers in a member country offer
educational services to consumers in other member countries through the Internet
or by correspondence.
(2) Consumption abroad. Educational service suppliers
in a member country offer educational services, such as studying and receiving
training abroad, to customers from another member country.
(3) Commercial
presence. Educational service suppliers from a member country open commercial or
professional institutions, such as schools, in another member country.
(4)
Flow of natural persons. Educational service providers from a member country
enter into another member country to provide educational services, such as
foreign teachers now teaching in China, or Chinese teachers now teaching
abroad.
Education is an issue that has a bearing on the state's sovereignty, public
morals and inheritance of national culture. All countries are very cautious in
opening the education sector, especially elementary education. Most countries
now provide non-commercial compulsory education where available space is
limited. With the exception of Mexico, Sweden and New Zealand, Western Europe,
Canada, Japan and the United States only opened their education market
partially. The US boasts of the best educational system in the world although it
only opened "adult education" and "other education services" to foreign
educational service providers.
In relation to educational services, China's WTO-entry promises fall into
four fields:
(1) China makes no promises to open its national compulsory
education and special education services, such as military, police, political
and Communist Party of China Party school education.
(2) China imposes no
limitations on sending students abroad for studying and training, nor on
receiving foreign students.
(3) China promises to partly open its higher
education, adult education, high school education, preschool education and other
education services. Foreign educational service suppliers are allowed to launch
joint educational institutions or joint schools in China, with foreign majority
ownership permitted. Foreign education service suppliers are forbidden to offer
education services independently, and joint schools in China must observe the
"Regulations on Sino-Foreign Joint Schools."
(4) Foreign individual
educational service suppliers may enter China to provide educational services
when invited or employed by Chinese schools and other educational institutions
on the condition that they possess a Bachelor's degree or above and an
appropriate professional title or certificate, including two years of
professional experience.
Although China has promised foreign education institutions access to its
educational service market via a "commercial presence" and "majority ownership,"
this does not necessarily mean foreign educational institutions can violate
China's existing non-profit principle for the educational industry. China only
promises "market access" and a guarantee of "management rights."
Foreign educational institutions launching non-profit schools and other
educational institutions in China may enjoy tax concessions or make moderate
profits by organizing lawful activities; the profits, however, must be used to
further their educational servicesin China and cannot be used as economic
returns or distributed as bonuses to the administrative and teaching staff. To
ensure people from all walks of life receive equal access to education, the
non-profit principle is widely observed in WTO member and non-member
countries.
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