Central Committee of the Communist Party of China and State Council, Several Opinions on Intensifying the Reform and Regulating the Development of Pre-school Education

Issued: November 7, 2018

Main contents: Private capital may not control a kindergarten established using state-owned assets or collective assets or a non-profit kindergarten by means such as a merger, acquisition, entrusted operation, franchise, chain, or use of a variable interest entity or negotiated control. A for-profit kindergarten involved in a merger, acquisition, franchise or chain operation shall file the agreement executed with the relevant interested enterprise with the education department at the county level or above for the record and publicly announce the same. The local education department shall conduct a strict review of the qualifications of the relevant interested enterprise and the kindergarten, the kindergarten's orientation, course resources, quantity, scale and management capabilities. A for-profit kindergarten that is part of a franchise or chain shall, in principle, secure provincial-level model kindergarten qualifications. A change in a kindergarten controlling entity or franchisee shall require the examination and approval of the education department of the district/county where it is located, and a change in the founder shall require the carrying out of approval and registration procedures in accordance with regulations and the carrying out of asset closing by the statutory procedure. When a safety, operation, management, quality, finance or asset-related problem arises in a kindergarten, the founder, de facto controller or the management organization responsible for the operation thereof shall bear the attendant liability.

The listing of a private kindergarten, whether alone or as part of an asset bundle, is not permitted. A listed company may not invest in a for-profit kindergarten through financing obtained on a stock market or purchase for-profit kindergarten assets by means such as an offering of shares or the payment of cash (Article 24).