Three waves of schooling marketization in urban China amid changing political economy since the 1990s

Abstract

Schooling marketization is a global syndrome characterizing post-1980 societies. However, while many studies have examined the political economy and politics of schooling marketization in Western economies, China’s schooling marketization remains insufficiently understood. Moreover, the existing studies have the analytical tendency to fall into the trap of methodological nationalism, with an exclusive focus on the state restructuring under neoliberalism and neoliberal globalization, leading to schooling marketization being viewed as a static and locally homogeneous practice. This paper fills these gaps by developing a city-level and time-sensitive analysis of local practices of marketizing the urban schooling system in the post-reform age. Two cities in western China—Chengdu and Mianyang—are taken as cases for comparative analysis. We found three waves of schooling marketization in urban China that are driven by the changes in the political economy between the 1980s and 2010s. Through a cross-fertilization of the outward-looking approach to geographies of education and geographic political economy, we understand China’s schooling marketization as a state-mediated institutional transformation that is employed to serve the local economic restructuring/time-varying urban growth strategy, which is staged by the changing (inter)national political economy.

Introduction

In February 2018, the Chinese Ministry of Education and another other four central authorities jointly announced the special act of realigning the extra-class education system at the primary to high school levels. This marked the start of China’s education de-marketization reform, which was intended to promote educational equality by restricting the provision and consumption of for-profit formal and informal (Ke Wai Jiao Yu) schooling. Since then, a majority of private schools selling after-class tutoring have been shut down, and the municipal states have been asked to reorganize the private schools (Ming Ban Xue Xiao) selling expensive formal schooling into public schools in their jurisdictions. Many commentators have argued that this elimination of the education industry has exacerbated the unemployment crisis and educational inequality. However, before examining the socio-economic consequences of this radical de-marketization reform, it is necessary to ask why and how the schooling system in China has been marketized. This paper seeks to answer the question by engaging with the literature on the political economy of education marketization and China’s state restructurings after the 1990s. Specifically, we focus on the marketization of the urban formal schooling system, which has attracted less attention but which is deeply embedded in the transformation of China’s political economy and cities.

Education marketization has been a global syndrome since the 1980s (Lundahl et al., 2013; Mok, 2005; Verger et al., 2017; Whitty and Power, 2000). Studies have examined why and how schooling has been marketized in different contexts. It is widely argued that the worldwide rise of the ethos favouring “free parental choice” and other neoliberal rationalities advocating the diversification of education in order to produce a competitive workforce and enhance the state’s international economic competitiveness contributed to the reframing of national education policies in favour of schooling marketization in many countries (Mok, 2005; Robertson, 2005; Wiborg, 2013). From a perspective of structural functionalism, some studies have argued that schooling marketization is both the condition and outcome of the post-Fordist restructuring toward a transnational flexible accumulation regime (Ball, 1993; Bartlett et al., 2002; Ray and Mickelson, 1993). The new production mode of global capitalism required a competitive/creative workforce instead of standard/mediocre workers, which induced the market-based diversification of education (Ball, 1993). From a perspective of state restructuring, studies have also found that the crisis of the welfare state and the rise of neoliberalism advocating small government caused the shift of the public schooling system towards the market (Berliner and Biddle, 1995).

However, a critical review of the literature identifies two limitations that have prevented a full understanding of the drivers of, and the process within which, the schooling is marketized. One is the lack of city-level analysis of the practices leading to schooling marketization and the role of the local state in these practices. The other is the insufficient attention paid to the temporality of schooling marketization, as most of the existing studies have focused on the schooling marketization under neoliberalism and neoliberal globalization between the 1970s and 2000s. Thus, more research is needed to deepen the understanding of schooling marketization as an ongoing process that is constantly reshaped by multi-level exogenous factors (e.g., the national policies, emerging market forces, and new economic/political rationalities). To address these two limitations, we devise a city-level, time-sensitive analytical framework by developing a cross-fertilization of the outward-looking approach to geographies of education (Theim, 2009) and geographic political economy (Jessop, 2018; Peck and Theodore, 2007; Wu, 2018). Engaging with them enables a reconceptualization of schooling marketization as a state-mediated institutional transformation that serves the local economic restructuring/time-varying urban growth strategy, which is staged by the changing (inter)national political economy. Such a reconceptualization echoes Verger et al.’s (2017) account of schooling marketization as a multi-faceted and multi-scalar phenomenon.

We substantiate the reconceptualization by examining three waves of schooling marketization in Chinese cities since the 1990s. Attention is paid to the role of the local state in promoting schooling marketization and the functioning of schooling marketization in local economic restructuring and crisis management projects. Comparative studies of two Chinese cities, namely Chengdu and Mianyang, are conducted to reveal the geographic heterogeneity in schooling marketization within a country and the importance of city/local-level analysis. By doing so, this paper contributes a local-level time-sensitive approach to understanding the political economy of schooling marketization, especially the role of the local state and city-level practices in this process, as most of the existing studies are restricted to investigations at the national level. Rather than providing a general explanation for schooling marketization in China, this paper reveals the local and temporal heterogeneity in the process of, and motivations for, schooling marketization. It challenges the dominant ideas of taking neoliberalism/neoliberal globalization as a general approach to understanding schooling marketization.

To achieve this, we proceed by critically appraising the existing literature on schooling marketization. We then elaborate on how we develop a theoretical engagement between geographies of education and geographic political economy to reconceptualize schooling marketization and develop a city-level, temporality-sensitive analytical framework. The methodology and the empirical analysis are then presented. Finally, this paper offers the key conclusions.

Framing a city-level time-sensitive approach to schooling marketization

Worldwide schooling marketization amid neoliberalism and neoliberal globalization

The post-1980 worldwide restructuring of education systems has resulted in a proliferation of studies on schooling marketization/privatization. Concerning the devastating social consequences of schooling marketization/privatization, scholars have endeavoured to account for this educational restructuring from different perspectives. Among these efforts, three strings of work are most significant. The first is to clarify the meaning of schooling marketization/privatization according to the material practices in different contexts, and to establish a taxonomy of the increasingly diversified schooling provision (Burchardt et al., 1999; Whitty and Power, 2000). Attention has been paid to the ambiguous conceptual boundary between schooling marketization and privatization (Marginson, 1997). Studies have clarified that schooling marketization refers to the establishment of a quasi-market for schooling provision/purchase (Bartlett et al., 2002). It is characterized by (1) the free parental choice of schooling providers based on the price mechanism, (2) the increase in school autonomy, and (3) the shift in government accountability from providing schooling to supervising the entry of new providers, schooling quality, investment, and price (Whitty and Power, 2000). While schooling privatization is broadly defined as a decline of state provision in schooling along with the reduced state subsidies (Pring, 1987), it is more narrowly defined as a transfer of schooling provision from the public to the private sector. Hence, the two processes are not interchangeable despite usually being inextricably linked (Marginson, 1997).

Studies in this direction have further unravelled the complicated map of schooling marketization, in which the conventional dichotomy of the collective consumption of goods based on the nature (public versus private) of the providers and funding sources is challenged (Bartlett et al., 2002). This rejection of the public-private dichotomy lies in the nonexistence of a free market whereby any market activity is (re)ordered by the state and political power (Whitty and Power, 2000). In fact, most private providers of essential services, including schooling, are subsidized by the state (Burchardt et al., 1999). Observing the varied schooling marketization practices in Western societies, Whitty and Power (2000) proposed a taxonomy of schooling provision, adding decision-making power by school managements as a new analytical dimension. Within this taxonomy, the state may contract out schooling provision to the private sector while retaining the decision-making power; such private schooling is funded by the state and provided to citizens free of charge but schooling that is publicly operated functions on a for-profit basis and the users are charged (Whitty and Power, 2000).

The second string of work explores the structural drivers of, and the process within which, schooling is marketized (Bartlett et al., 2002; Ngok, 2007). Following the structural functionalist approach, studies have stressed the co-constitution of school marketization and the post-Fordist restructuring, taking schooling marketization as both the condition and outcome of neoliberal globalization (Bartlett et al., 2002). One reason is that the huge layoffs due to the Fordist crisis and the offshoring of industries broke the social compact forged between the middle and working class under the Keynesian-Fordism political economy (Ray and Mickelson, 1993). Meanwhile, the newly-established transnational flexible accumulation regime required a competitive/creative workforce instead of standard/mediocre workers (Ball, 1993). The two forces deriving from the changed capitalist production mode compelled the middle class to compete for quality education resources to ensure the reproduction of their class (Bartlett et al., 2002). From the supply side, the neoliberal shift to small government caused fiscal austerity, and the encouragement of public-private partnerships, which shifted the public burden to the market (Berliner and Biddle, 1995). The dwindling public budget for schools caused the privatization and deregulation of schools and led to inter-school competition for public/private investments and students, thus facilitating a reconceptualization of schooling no longer as a public good but as a lucrative consumer good (Shipps, 1997).

The studies in this string also criticized the West-centred studies for overlooking the state-mediated nature of educational restructuring and the diverse experiences in marketizing schooling outside the Anglo-American context. The studies systematized the multiple paths towards schooling marketization that existed among different capitalist economies (Robertson and Dale, 2015; Verger et al., 2017). Their findings show that in low-income countries, state failure in securing schooling provision caused the rise of education markets. In the Netherlands and Belgium, where there are historical private-public partnerships in the religious schooling system, the rapid increase in schooling marketization is the result of the conflict between the state and the faith-based institutions (Verger et al., 2017). In the Nordic countries, although the legitimacy crisis of the welfare state forced the Conservative governments to promote the reduction of the state provision in schooling, it was the Social Democrats’ calls for the modernization and diversification of public service that pushed schooling marketization forward (Wiborg, 2013). Thus, the hegemony of the neoliberalist education policy discourse advocating that the production of a competitive workforce by the diversification of education (Rinne et al., 2002; Robertson, 2005) is not the unique determinant for schooling marketization in many countries, despite their worldwide influence.

Lastly, many studies have examined the socio-spatial consequence of the emerging marketized schooling provision (e.g., the Charter School system, the Assisted Places Scheme, and the Voucher Scheme). Studies have examined the effect of a specific pro-market education policy on residential and school segregation (Nechyba, 2003; Valenzuela et al., 2014), and on the class/race-based inequalities in students’ performance (Bifulco and Ladd, 2007; Böhlmark and Lindahl, 2015). Overall, the literature suggests that schooling marketization is not uniform but is an unevenly developed process. It also suggests that examining the form and taxonomy of schooling marketization is not essential because even in similar forms, the political-economic root/social consequence of a specific type of marketized schooling is different among countries (Whitty and Power, 2000). Instead, schooling marketization is commonly employed to address the endemic political-economic crisis, as a component of the state crisis management project (Verger et al., 2017). This article attempts to reveal the political-economic drivers of schooling marketization in China, which is under-studied. Regarding the theory, we attempt to fill two gaps in the existing literature on schooling marketization using China as a case.

Firstly, the city/local level is a missing analysis scale. Verger et al. (2017) highlighted that schooling marketization is a multi-faceted and multi-scalar phenomenon. City-level analysis is therefore vital for fully understanding the heterogeneous and state/policy-mediated, crisis-driven nature of schooling marketization. City-level analysis helps us to link the political-economic drivers of schooling marketization (the second string of work) to the material local practices towards this end and their locally embedded socio-spatial consequences (the first and third strings of work). Secondly, the temporality of schooling marketization remains under-studied. Existing studies have focused on the schooling marketization under neoliberalism and neoliberal globalization between the 1970s and 2000s while largely ignoring the evolutionary nature of the marketization processes. An often-ignored fact is that political/economic crises emerge at different levels, and these continuously drive the political-economic/state transformation. A wide range of marketized forms of schooling can co-exist in a country/city, as they each have different origins and serve different ends. In order to develop a city-level time-sensitive analytical framework, we seek theoretical handles from the geographies of education and geographic political economy.

Outward-looking geographies of education, geographic political economy, and schooling marketization

Such methodological localism is nothing new, especially to those geographers who examine the intricate and multi-faceted nexus between space, place, and education. It is stressed that “the education literally takes place in the neighbourhood and educational landscapes are embedded in local communities, although they are exposed to and are part and parcel of educational policies and the ongoing dynamics of transformation at regional, national and international levels” (Freytag et al., 2022: 227). Thus, there are two established strands of studies within the geographies of education. The first is how the changes in an education regime affect the socio-spatial distribution within the education sector, revealing the importance of the capability to be mobile geographically and of occupying good locations (e.g., school catchment areas) in accessing quality education resources (Hamnett and Butler, 2011; Holloway et al., 2012; Waters, 2006; Zhang, 2023a). The second strand examines the physical, cultural, and relational attributes of space/place (e.g., classrooms, schools, playgrounds, and community spaces) which are involved in students’ unequal participation in and outcomes of education (Giband, 2022; Simandan, 2013; Zhang, 2023b). Despite the insights into the geography-mediated reproduction of educational inequality, these studies have largely pursued an inward-looking perspective of the education sector itself. They are, as Theim (2009) criticized, insufficient in exploiting the potentials of education to reflect the mechanism of the geographic process of capitalism and state. Theim (2009) thus promoted an outward-looking approach to the geographies of education, highlighting that the education is not merely a research object and explanandum of geography/space. Rather, education should be treated as a method to understand contemporary mutually constitutive spatial and political economy transformations.

It is thus necessary to develop a theoretical engagement between geographies of education and geographic/urban political economy. In this paper, we are interested in mobilizing three theories from geographic political economy to consolidate the education-political economy nexus and, as stated earlier, to develop a local and time-sensitive analytical framework for schooling marketization in China. Firstly, the variegated capitalism thesis (Peck and Theodore, 2007) and Jessop’s TPSN approach (Jessop, 2016) stressed the crisis-driven and temporal nature of institutional transformation and the localization/regionalization of economic model and economic transformation. Thus, there is no static and ideal function of an education/school regime working to stabilize a mode of territorial economy. Rather, education regime transformation may constitute the localization of state crisis management projects in an attempt to transform the local mode of the economy. Secondly, studies on urban/state entrepreneurism (Phelps and Miao, 2020; Wu, 2018) have argued that under political decentralization to the municipal state, there are growing innovations within the public sector to address multiple goals including welfare provisions and economic growth, although such goals may come from top-down (central government) or bottom-up (civic society) processes. Thus, the local governance body may innovate the local education/school regime differently according to the local conditions and crises. Thirdly, Lipman’s (2011) political economy of urban education argues that there is a spatial function of the school regime in cities. As certain school/education regimes (e.g., fee setting, enrolment policy, and courses offered) are attractive to certain households and investments, school regime restructuring can be used to induce the mobility and concentration of populations and investments to/in certain places.

Taken together, these insights contribute to an understanding of the localization and periodization of the schooling marketization-political economy nexus from two aspects. Firstly, the local governance body adjusts and innovates the method of schooling marketization to address temporal economic and governance crises, and such efforts work with institutional transformations in other sectors to constitute the urban development strategy during a certain period. Secondly, a school regime’s spatial function regarding attracting investment and populations to certain places is key to the embeddedness of schooling marketization in the formation and transformation of any urban development strategy. Overall, a two-level embeddedness exists between urban school regime transformation and urban development strategy transformation, and between urban development strategy transformation and national political economy transformation. The different economic and governance crises faced by the local governance body and its agency in order to innovate local institutions in response to changes in the national political economy and address crises are factors that induce the local heterogeneity in schooling marketization. We operate this local-level and time-sensitive approach to understand the changing and locally heterogeneous motivations of schooling marketization in China.

Overall, this paper seeks to provide a local-level and time-sensitive approach to understanding the political economy of schooling marketization, as most of the existing studies are limited to national-level investigations. We do so by developing a theoretical engagement between geographic political economy and geographies of education. Rather than providing a general explanation for schooling marketization in China, this paper reveals the local and temporal heterogeneity in the process of and motivations for schooling marketization. It challenges the dominant ideas of taking neoliberalism/neoliberal globalization as a general approach to understanding schooling marketization. Thus, the selection of Chengdu and Mianyang for a comparative analysis is not because of their representativeness of China’s schooling marketization but is because of their salient differences in economic conditions and position in China’s urban system. Such differences suggest a high possibility of the diversity of crises faced by the municipal governments, which can induce different ways of innovating schooling marketization.

Methodology

Chengdu and Mianyang, two Chinese cities in Sichuan province, are taken as cases. The reasons for this are twofold. Firstly, both cities have an active education market and a long history of schooling marketization. It must be noted that schooling marketization is unevenly developed (Verger et al., 2017). Even when affected equally by the same structural forces (e.g., central policies and emerging market forces), there are uneven local responses to the top-bottom force due to different socio-political conditions and other contingencies. According to our preliminary investigation, the two cities have almost all the types of marketized schooling provisions (e.g., state-owned for-profit schools and developer-run private schools) that currently exist in China. The two cities can be seen as epitomizing the general schooling marketization process in Sichuan province and western China.

Secondly, Chengdu is the largest metropolis in southwest China, and Mianyang is the second largest city in Sichuan province. The two cities have been the major industrial cities in western China since the planned economy period, and have been deeply involved in and reshaped by China’s state/economic restructuring during the past three decades. Thus, the two cities are good cases to examine the co-evolution of schooling marketization and China’s changing political economy. Lastly, Chengdu is the capital city of Sichuan province and the regional centre of southwest China, while Mianyang is an ordinary prefecture-level city. They lie at different hierarchical levels of China’s urban system and have different economic-social conditions (e.g., population size and industrial structure), and thus have faced different top-down political imperatives and bottom-up governance crises. Such differences suggest a high possibility of differentiation of crises and imperatives faced by the municipal governments, which can induce different ways of innovating schooling marketization.

Evidence used for the empirical analysis is derived from three sources. Firstly, we reviewed the existing literature relevant to China’s educational reform and economic restructuring so as to gain a general picture of their correlation. Data from government archives on governing the education sector at the national and local levels were also collected and analysed. Secondly, we interviewed the senior officials of the government bodies of the two cities, including education bureaus, the National Development and Reform Commission and the Ministry of Housing and Urban-rural Development, and the senior managers and teachers from local schools to learn the grounded policies and practices in marketizing schooling in different periods. Table A1 in the Appendix gives the list of interviewees. Specific attention is paid to the motivations underlying these policies and practices. Thirdly, we interviewed local parents who were familiar with local education policies and school developments. The literature review and the subsequent analysis were conducted between March and June 2019. The field investigation in Chengdu and Mianyang was conducted between August 2019 and August 2020.

Three waves of schooling marketization in Mianyang and Chengdu

The literature review helped us identify three waves of schooling marketization in China (Ngok, 2007; Painter and Mok, 2008; Wu, 2016), which were coincident with China’s three major periods due to the changing political economy (Wu, 2016; Zhang and He, 2021). They are (1) the early reformist regime between the 1990s and the middle 2000s, when China drastically reformed the public sector and the state-owned economy and moved towards a market economy nationwide; ¹ (2) the post-WTO period in the 2000s, when China successfully established an export-oriented, production-based accumulation regime; and (3) the post-crisis capital switch regime in the 2010s, when China endeavoured to overcome the overaccumulation crisis by channelling the excessive capital into the built environment sector. Most of the existing literature on China’s schooling marketization discusses the national education policies. In the following subsections, we narrow the analytical gaze to a city level and investigate how the grounded schooling marketization policies/practices were employed to serve the local economic restructuring/entrepreneurial strategies. Figure 1 and Table 1 summarize the key findings from the two cases, based on which we unfold the stories of schooling marketization of Mianyang and Chengdu. ²

Figure 1.

Co-evolution of local schooling marketization and political-economic transformation.

Table 1.

Co-evolution of local schooling marketization and political-economic transformation.

Period	Early reformist regime (1990–2001)	Post-WTO accumulation regime (2002–2010)	Post-crisis capital switch regime (2010–2019)
Mianyang
Local growth strategy/crisis	To address local fiscal and social crises that were induced by the tax and SOE reforms	To attract industrial investment for fostering an electronic manufacturing industrial cluster	Land-development-based growth by borrowing and financing the new town project
Objective of schooling marketization	Reducing public expenditure on schools and finding new sources of funding through schooling marketization	Financing industrial park projects through the sale of local quality schooling to non-local parents	1. Deploying the attractive marketized schooling resource to facilitate the new town plan and to increase the property price 2. Deploying profitable marketized schools to enhance the competitiveness of the LFP in the capital market
Chengdu
Local growth strategy/crisis	To address local fiscal and social crises that was induced by the tax and SOE reforms	To make the city a regional consumption centre that serves mobile wealthy households in western China	Land-development-based growth by borrowing and financing the new town project
Objective of schooling marketization	Reducing the public expenditure on schools through schooling marketization	Making the city attractive to the wealthy/middle-class households through the diversification and customization of schooling services	Deploying the marketized schooling resource to facilitate the consumption of hoarding real estate in the suburban new town

Schooling marketization during early reformist regime

Schooling marketization was not an new phenomenon. It had existed in the Republic of China, which was controlled by the the Nationalist Party of China (NPC). At that time, the capitalistic economy developed rapidly, leading to the rise of diverse forms of for-profit schools, some of which were profit-oriented. However, China’s education sector has changed radically since the takeover of China by the Chinese Communist Party (CCP). Aiming to establish a socialist country, CCP nationalized all the schools by renaming, reconfiguring, and relocating them. Underlying these practices was an attempt to achieve regional equality in the schooling provision. However, this education egalitarianism was gradually eroded by China’s deepening of the market-oriented reform in the 1990s.

According to the official rhetoric, post-socialist China’s schooling marketization started in 2002 when the “policy on promoting the for-profit schooling development” ³ was announced. Allegedly, this policy was a response to chairman Jiang Zeming’s national strategy of “national rejuvenation through science and education”. The policy claimed that the diversification of education provision through privatization/marketizing improves the comprehensive quality and competitiveness of Chinese young people. But as Verger et al. (2017) disclosed, authorities strategically represent schooling marketizing/privatization by assigning it specific meanings so as to mask the real political-economic motivation and to facilitate the transformation of educational institutions. A close look at the history of city-level schooling marketization in China confirms this view whereby the schooling marketization practices in many Chinese cities occurred ahead of the aforesaid national policy. In this regard, we use Chengdu and Mianyang as cases to identify the real drivers of the first wave of schooling marketizing in China.

During the planned economy period, Mianyang, among other inland major industrial cities specializing in the national defence industries, was favoured by the central government. First the city’s state-owned enterprises (SOEs) and their living quarters, serving over 200,000 workers, were directly supervised and financed by the central authorities. Second the centralized (re)distribution system that existed at that time provided Mianyang municipality with sufficient resources to maintain standard-level public service provision. The market-oriented reform in 1978 brought unprecedented development opportunities to Mianyang. The deregulation of the inter-city commodity exchange and the abolition of the centralized goods distribution system benefitted Mianyang in the 1980s. At that time, SOEs and municipalities were encouraged to participate in commodity production and exchange to gain revenues for themselves. Owing to the specialization in military electronic techniques, a state-owned enterprise (SOE) in Mianyang developed civil television production lines and then became China’s largest television manufacturer in the 1980s. The successful television production industry made Mianyang one of the most developed cities in western China.

However, two influential institutional transformations in the 1990s resulted in Mianyang’s decline and completely changed the city’s social-economic conditions. First, the establishment of the tax-sharing system in 1994 devolved the political power in organizing local resources and economic activities to municipalities. Accordingly, the burden of developing the local economy, fostering local industries/enterprises, and financing the local public sector was decentralized to municipalities. Wu (2000) demonstrated that the tax reform marked the transformation of Chinese municipalities from managerialism to entrepreneurialism. Furthermore, the SOE reform in 1998 caused nationwide bankruptcies of SOEs resulting in a severe local unemployment crisis (Wu et al., 2011).

In response to the sharply decreased fiscal revenue and increased local spending in the late 1990s, Mianyang municipality took three key actions engendering local schooling marketization. The first was to downsize local public institutions including public schools, and the fiscal distribution to them was also reduced. However, in order to maintain adequate schooling provision, Mianyang municipality allowed the top public schools to marketize their junior-level schooling and gave them autonomy in pricing tuition fees and enlarging the enrolment size, with the requirement that they used the profits to pay the teachers’ wages. The second action was to encourage the local private sector to run profit-seeking schools so that some publicly waged teachers could voluntarily move to the newly-established for-profit schools. In 2000, Dongchen Group, a local chemical company, established the first for-profit school in Mianyang using the free land allocated by the municipality. This for-profit school developed into one of the most successful education groups in western China in the 2010s. The third action was to run profit-seeking public schools specializing in selling customized, high-quality yet expensive schooling to local wealthy parents. The earnings from these “public schools” enriched local government finance. In 2001, the first profit-seeking public school in Mianyang, namely Mianyang Foreign Language School, was established, and it was charging the highest tuition fees in the city.

Similarly, Chengdu experienced the unemployment crisis resulting from the SOEs’ reform and the fiscal woes induced by the tax-system reform in the late 1990s. Because Chengdu was the provincial capital city, Chengdu municipality had the responsibility for finding a way out of the dilemma and of setting an example to other Sichuan cities. Thus, Chengdu municipality had been struggling to reform the city’s public sector throughout the late 1990s. The urban education sector was a major field where the municipality conducted “experimentations” on implementing the self-financing of public institutions. Between 1996 and 2001, five public schools in Chengdu were marketized, with the principals becoming the legal representatives of the schools. The autonomy in setting tuition fees, making enrolment policies, and organizing independent entrance examinations was given to the principals accompanied by a substantial cut in their public funding. Accordingly, these new-style schools were renamed “XX experimental schools”, and they were asked to pay their teaching staff through their own through market operations. Private investors were allowed to be the shareholders of these experimental schools; the private capital was expected to upgrade the school facilities, thus enhancing the comparative advantage of the new-style schools over the traditional public schools. Among the five experimental schools in Chengdu, three received investment from private companies and established a shareholding system around 2000.

In conclusion, instead of the alleged reason for schooling marketization, that is, the diversification of schooling, the local fiscal crisis deriving from the political-economic reforms towards a market economy induced the first wave of schooling marketization in Chinese cities. The above earliest experiences in marketizing urban schooling were not unique to Chengdu and Mianyang. In fact, most Chinese cities had established the profit-seeking “experiment schools” and “foreign language schools” around 2000. This was because the tax-system reform, political decentralization, and the SOE reform were implemented equally despite the varying impacts on different cities. Because almost all the Chinese municipalities were in a same predicament, the local successful experiences in reforming public schools were mobilized rapidly among cities and learned by municipalities.

Schooling marketization serving post-WTO accumulation regime

Joining the World Trade Organization in 2001 enabled the growth strategy that sought to make China the world’s low-end manufacturing hub (Wu, 2016). Throughout the 2000s, aiming at nurturing China’s overall competitiveness in attracting industrial investment, the central government reinforced political decentralization, which enabled municipalities to make individual preferential policies to attract specific enterprises, so as to foster locally embedded industrial clusters (Wu, 2016); it also continued regional favouritism that privileged the coastal cities in access to vital development resources due to the their geographic advantages in developing export trade (Lim, 2014). But recognizing that the uneven development could engender a severe social crisis, the central state took two measures to mitigate the coastal-inland economic inequality. Firstly, the “fiscal payment transfer system” was focused to enable the transfer of some wealth produced by the coastal export-oriented, production economy to subsidize the public service provision and poverty alleviation projects in the inland areas (Lim, 2014). Secondly, certain inland cities with good industrial conditions were encouraged to attract industrial investment so as to mitigate inland unemployment and poverty. Particularly during the late 2000s, the increased labour/land costs in the coastal areas induced a foreign direct investment (FDI) outflow, and the central state encouraged inland cities to compete for the enterprises/industries that were moving from the coastal areas (Zhang and He, 2021). That is why both the western and eastern cities were involved in the intensive competition for industrial capital in the 2000s.

Mianyang municipality has endeavoured to create the supply-side conditions favouring manufacturing industries despite the remoteness from cargo ports that has disadvantaged the city in the competition for industrial investment. However, owing to the city’s advantages in military industries, Mianyang municipality won the support from the State Council in setting up Mianyang as a major technopolis in China. This was marked by the establishment of a provincial-level industrial park in Mianyang in 2001 to facilitate the city’s large industrial SOEs to employ its military technologies to develop civilian productions through collaborating with private capital. Meanwhile, Mianyang municipality attempted to expand and upgrade its national high-tech development zone, aiming to attract FDI and cultivate an electronic manufacturing industry cluster. This was because, as mentioned earlier, Mianyang had Changhong Group, a large SOE that had been China’s largest television manufacturer in the 1980s and 1990s. However, due to insufficient fiscal income for constructing and upgrading the industrial park and development zone, Mianyang municipality strategically turned to its advantaged education sector, employing it to promote the city as a leading education city in Sichuan province.

The aim of this strategy was to obtain a profit from selling local high-quality schooling to the middle-class households from other nearby cities. Then the profits were mobilized to upgrade the city’s industrial infrastructure and increase its attractiveness to industrial investment. For one thing, the municipality established profit-seeking branch primary/middle schools of Mianyang’s renowned public high schools to gain excessive tuition fees. The turnover time of the production and sale of schooling was short. Only 2–3 years were needed for the completion of a new campus, and the yearly gains from charging tuition fees were considerable and stable. It was estimated that the operation of two branch schools brought about 100 million CNY in revenue to the municipality every year in the 2000s. In contrast, the annual fiscal revenue during the same period was just one billion CNY. In addition, Mianyang municipality encouraged local private companies to invest in expanding/upgrading their for-profit schools, thereby enlarging the enrolment size. Thus there was a sharp growth in the inflow of the migrant students along with their affluent households, which produced huge demands on the local service sector and increased the revenue from local taxation.

Apart from allocating free land to build new schools and simplifying the administrative procedures of the new school projects, Mianyang municipality took another four actions to foster a competitive education industry. Firstly, Mianyang municipality gave these profit-seeking schools full autonomy in making enrolment policies, pricing tuition fees, and diversifying the chargeable educational services. For instance, Dongchen School established a new department in 2008 specializing in assisting students to take the A-level/SAT tests and to apply for overseas universities. Meanwhile, profit-seeking schools were allowed to substantially increase enrolment size, and open special classes serving unqualified students with charging excessive fees. Secondly, the municipality allowed the renowned public schools to open “special enrolment projects” privileging the profit-seeking branch schools. Thus, the students of the branch primary/middle schools can take a separate entrance examination to enter the renowned public high schools. The admission rate of the “special enrolment projects” has been 2–3 times higher than the unified city-level entrance examination. In this way, the wealthy non-local parents proactively secure the quality high school educating resource for their children by buying the expensive primary/middle-level schooling from Mianyang municipality.

Thirdly, the huge number of migrant students/parents and their periodical mobilities between their home cities and Mianyang resulted in intense pressures on the local transport systems. In response to this situation, Mianyang municipality sponsored a special point-to-point transformation programme, requiring a state-owned bus company to transport the migrant students between their hometowns and the schools every month. The municipality also deployed the local police force and coordinated various departments (e.g., toll and train stations) to produce a “green pass” that facilitated the non-local parents to escort their children between home and school regularly. Lastly, Mianyang municipality strategically mobilized the experienced school managers and teaching staff from the public schools to their profit-seeking branch schools so as to quickly enhance the parents’ confidence in the new schools and increase their willingness to pay for the expensive schooling.

In contrast, Chengdu municipality was not keen on developing a profit-seeking education industry to finance its industrial development projects. Despite the disadvantage in the inter-city competition with the coastal cities for attracting FDI, as the largest metropolis of the underdeveloped southwest China, Chengdu had the structural advantage in becoming a regional consumption centre. The continuous inflow of wealthy households from other western cities to consume the high-quality services and goods (e.g., schooling, healthcare, high-end malls and housing services) featured and advantaged Chengdu in the 2000s. Thus, for Chengdu municipality, the making of Chengdu into a modern metropolis serving the middle/upper-class households in Southwest China was a practicable entrepreneurial urban strategy. Throughout the 2000s, apart from the construction of two suburban industrial parks, Chengdu municipality paid more attention to upgrading the inner-city living and consumption environment. These initiatives included the introduction of reputable international retail groups and the redevelopment of dilapidated workers’ living quarters and factory districts in order to build high-end residential-commercial complexes.

Accordingly, the development of customized and diversified educational services catering to the mobile wealthy households was encouraged as a component of Chengdu’s urban entrepreneurial strategy. Private investors were invited to take over the public schools. They were further encouraged by the municipality to collaborate with the renowned public schools to open new branch schools or to independently run new for-profit schools near the newly-developed wealthy communities. These for-profit schools were allowed to implement small-class teaching and to provide art education and international schooling, which helped the students to apply for overseas universities. For instance, two famous wealthy areas were developed in Chengdu during the 2000s: the Shenxianshu area and the Longhu area. Accompanying the construction of several wealthy residential-commercial complexes in these two areas was the setting up of two top and expensive for-profit schools: Gold Apply School and Jiaxiang Foreign Languages School.

Schooling marketization serving post-crisis capital switch regime

China’s export-oriented, production-based accumulation regime was interrupted by the global financial crisis in 2008. In response to the global trade recession, the State Council launched the “Four Trillion Stimulus Package” to channel excessive capital from the production sector to construction in the city so as to stimulate the economy (Zhang et al., 2021). This capital switch process was enabled by two key institutional transitions. One was the post-2009 financial re-regulation reform, characterized by the monetary easing and the diversification of financing channels through fostering a multilayered capital market (Tsui, 2012). The other was the top-down executive order that required municipalities to conduct massive land developments through borrowing (Pan et al., 2017). Accordingly, China saw a construction boom and a land-development-led growth pattern in the 2010s (Zhang et al., 2021). By 2014, of the 281 prefecture-level cities in China, 272 had launched new suburban town buildings. On average, each city has had 2.5 new suburban towns constructed since 2008 (Chang and Lu, 2017). By and large, in the 2010s, China anchored a new accumulation regime. It was characterized by making municipalities the indebted investors to sustain the circulation of capital in and out of land by crafting the production/consumption of properties into a new frontier of accumulation (Zhang et al., 2021). It was made possible by the deep engagement of municipalities with financial activities through the operation of local government finance platforms (LFPs) for (re)financing suburban new town projects (Feng et al., 2022; Theurillat, 2022; Wu, 2022), and by the state-mediated fast consumption of the newly-developed properties to repay the government debt. The entrepreneurial urban strategy in this regard has temporarily changed to re-articulate local resources to compete for the credit available and to facilitate local property/land consumption.

In the face of the industrial recession and financial re-regulation that urged municipalities to borrow, Chengdu municipality launched the Tianfu New Town (TFNT) Development Project in 2010 with two LFPs established to finance/conduct suburban land developments. In order to increase the value of the suburban land, Chengdu municipality invested heavily in the construction of top-grade public facilities (e.g., museums, metro lines, and wetland and marine parks) in TFNT. Although the prime landscape projects and the government-led suburbanization of high-end jobs has stimulated a property development boom within TFNT, the absence of quality schooling resources made these newly-developed suburban properties less attractive to the middle-class households. A depressed property market reduced developers’ intentions to purchase land from the municipality, which subsequently obstructed the municipality’s debt repayment schedule. In response to this challenge, Chengdu municipality took two measures. First, it required the renowned public schools to establish branch schools in TFNT. The five most prestigious public primary schools in Chengdu were called the “five golden flowers”, and all of them were located in inner Chengdu. At the request of the municipality, all the “five golden flowers” launched branch school projects after 2015 by mobilizing their most experienced senior staff members to develop strong teaching forces for the branch schools. This was because the municipality had asked them to enhance the quality schooling provision in the TFNT as soon as possible. Similarly, the three most prestigious public middle schools in inner Chengdu launched branch school projects in TFNT after 2015. In order to stress a strong association between these newly-established schools and TFNT, Chengdu municipality renamed all these branch schools as “Tianfu No. XX primary/public school” in 2017.

Second, aside from the middle-class gated communities and commercial complexes, villa developments formed a considerable part of TFNT. To address the demand by the wealthy households for diversified schooling (e.g., art and international education), Chengdu municipality encouraged prestigious local private education groups to establish new schools in TFNT. In 2016, with the incentives offered by Chengdu municipality, including tax relief and the reduction of land transfer fees, Golden Apple Education Group and Chengshiwai Education Group established new schools in TFNT. Moreover, Chengdu municipality itself has proactively collaborated with western institutions in establishing international schools in TFNT. One instance of this was the establishment of the Hamilton Luhu School within the largest villa community in TFNT in 2019. This school was co-owned by the University of Waikato, New Zealand and a local developer in Chengdu under a collaboration orchestrated by Chengdu municipality.

Notably, in August 2018, the State Council announced a policy of restraining the for-profit school development. In response to this top-down force, Chengdu municipality strategically denoted all the new branch schools in TFNT as public schools. However, these were “public schools” in name only; in reality, these branch schools were profit-oriented and had been given autonomy in setting tuition fees and were encouraged to adopt market strategies to develop their competitiveness. A key task that Chengdu municipality gave these “public schools” was to win the competition with the inner-city schools in the students’ performance and the enrolment rate. A key motivation underlying these education promotion initiatives was to appreciate the property value of TFNT, thus invigorating the land market.

By contrast, Mianyang municipality proactively took advantage of Mianyang’s successful education industry to boost the new town development. In response to the “Four Trillion Stimulus Plan”, Mianyang municipality planned to develop the Yuanyi New Town in the northern suburb. Differing from the city’s previous spatial expansion projects aimed at industrial developments, Yuanyi New Town was for high-end property developments. Taking advantage of the attractiveness of Mianyang’s quality schooling, the municipality renamed Yuanyi New Town as “Mianyang Education Development Zone” (MEDZ), and integrated local education resources to build three flagship for-profit schools in MEDZ. To this end, Mianyang municipality established “Mianyang Jiaoyu Investment Group”, specializing in constructing, financing, and operating the three flagship schools, and negotiating with developers about launching property development projects within MEDZ. Meanwhile, Mianyang municipality urged Dongchen Group to build new campuses within MEDZ, a strategy which worked. Overall, Mianyang’s new entrepreneurial strategy of quality-schooling-led property developments was successful. By 2017, about 7 km of residential land had been developed within MEDZ to accommodate 65,000 middle-class households, 40% of which were migrant households who were attracted by the quality schooling. Due to the proximity to quality schooling, MEDZ had an average property price 30% higher than the inner-city area. The increase in the stable property price had made the property in MEDZ a “prime investment good” that was famous within Sichuan. Perceiving the surging demand for shadow/art education from the middle-class parents living in MEDZ, Mianyang Jiaoyu Investment Group established two new profit-seeking schools specializing in providing extracurricular activities in MEDZ in 2017.

It was even more interesting to see that in 2017, Mianyang municipality reconfigured Mianyang Jiaoyu Investment Group, making it a subsidiary of Mianyang Investment Group, which was the largest LPF in Mianyang. Apart from the intention of enhancing the control over the city’s education resource, this municipality-led merger mainly aimed to deploy the strong and healthy balance sheet of Mianyang Jiaoyu Investment Group to enhance the credit rating of Mianyang Investment Group. This was because in 2016, the central authority started a credit crunch, which intensified the inter-municipality competition for credit. In this context, enhancing the credit rating of the LPFs was imperative for most Chinese municipalities. Mianyang’s successful education industry benefitted Mianyang municipality in this competition. This was because the operation of the renowned profit-seeking schools was viewed by the financial sector as “a high-profitable, low-risk business that generates a stable cash flow”. Thus, the municipality-run profit-seeking schools were considered to be good assets. The acquisition of Mianyang Jiaoyu Investment Company therefore significantly improved the balance sheet of Mianyang Investment Group to gain a high credit rating of AA+ in 2017. This high credit rating helped Mianyang municipality to gain stable borrowings to (re)finance the suburban land developments and maintain the growth of the local economy.

Conclusion

This study has explored the state-mediated and locally heterogeneous processes of schooling marketization in China by using Chengdu and Mianyang as cases. Based on a critical appraisal of the existing studies on schooling marketization, we pinpoint two key missing links among them. One is the lack of city-level analysis of the drivers of the marketization of schooling, and the process within which the schooling is marketized. The other is the overlooking of the temporality of schooling marketization and that the aims and means of schooling marketization may vary with time. To address these deficiencies, we look for theoretical handles from a cross-fertilization of the outward-looking geographies of education (Theim, 2009) and geographic/urban political economy (Jessop, 2018; Peck and Theodore, 2007; Wu, 2018). Engaging with the two theories helps to reconceptualize schooling marketization as a state-mediated institutional transformation process that is employed to serve the local economic restructuring/urban entrepreneurial strategy, which is (re)shaped by the changing national and urban political economy.

Based on this reconceptualization, we examine the existing schooling marketization processes in two Chinese cities. Attention has been paid to how the municipality employed schooling marketization to address the local political-social crisis and to serve the changing entrepreneurial strategy in different periods that was caused by China’s restructurings of the political-economic/state. Two key findings are drawn from the comparative case studies. Firstly, some Chinese cities have experienced three major waves of schooling marketization since the 1990s, which have occurred in conjunction with China’s three major political-economic regimes (Wu, 2016; Zhang and He, 2021): (1) the early reformist regime, which sought to decentralize the responsibility of organizing economic activities for growth to municipalities, within which schooling marketization was deployed to address the local fiscal crisis; (2) the post-WTO accumulation regime, which centred the inter-city competition for capital investment as the approach to growth, within which schooling marketization was deployed to nurture specific local competitiveness; and (3) the post-crisis capital switch regime, which sought to craft city building as a new frontier of accumulation, within which schooling marketization was deployed to facilitate the circulation of capital in and out of land. From a perspective of the French regulation school that takes the state-mediated extra-economic restructuring as central to searching for/securing a growth mode (Jessop, 2001), the transformation of educational institutions is also a regulatory fix to enable the reproduction of territorial capitalism. Thus, the alterable relationship among the households, school, state, and market is a part of the ensemble of social relations that is constantly re-regulated by the state to allow state crisis management projects.

Secondly, schooling marketization is unevenly and differently developed at the city level despite the same top-town forces. The uneven local response to the exogenous force that induces schooling marketization, as revealed by the differences between Chengdu and Mianyang, is partially attributed to the different position of a city in the territorial economy. Such positional differences determine the heterogeneity of the urban entrepreneurial strategy and the functioning of schooling marketization in enabling certain local entrepreneurial strategies. Other factors may also affect the way in which the local schooling resource is marketized, including the unevenness in the circulation of information about the new economy and market instruments among cities, and the involvement of local officials in the local education industry for rent seeking. But one factor that should not be ignored is the fast policy mobility among contemporary entrepreneurial cities (Peck, 2011), which may adjust the city-different schooling marketization process in the same direction. The “Mianyang Model” in schooling marketization has been quite popular in southwest China since the late 2000s. Many municipalities in Sichuan have copied Mianyang’s approach to operating urban schooling resource. Having said that, we do not intend to stress the particularities of the cases of Mianyang and Chengdu. Instead, we stress that the local schooling resource is an important resource and thus is the object of state regulation to serve the state crisis management projects in the context of China.

Finally, the findings of this paper provide a perspective to understand China’s ongoing education de-marketization reform. In the name of promoting educational equity, the Chinese central state aims to ban the after-school tutoring schools, which are fully operated by the private sector. Public media and policy documents have seldom mentioned the marketization of the urban formal schooling system and the state-owned for-profit schools, which, as this paper reveals, have been deeply involved in China’s state capitalism, and which is essential to the local fiscal stability and other political projects. In this regard, although the central state has ordered the municipalities to reorganize the for-profit schools, it is possible that the municipalities will be allowed to find a third way of meeting the goal without banning the state-owned for-profit schools.

While providing a local-level time-sensitive approach to challenging the dominant ideas of taking neoliberalism/neoliberal globalization as a general approach to understanding schooling marketization, this paper makes two other contributions to the existing literature. Firstly, by unpacking how Chinese municipalities strategically restructured the local education sector to serve their entrepreneurial strategies in different periods, we substantiate Wu’s (2020) theorization of state entrepreneurialism to understand the mechanism of China’s urban transformation. Besides, the conventional analysis of city entrepreneurial strategies in China focuses on how the local growth coalition employed the place promotion, spatial planning, industrial policies, mega projects, and policy mobility to strengthen local economic competitiveness (Chan and Li, 2017; Chien, 2013; He et al., 2018; Wu, 2003; Zheng, 2011). These studies have largely ignored the entrepreneurial practices in other fields and their interactions as orchestrated by the state. We, in this regard, contribute a new perspective to understand urban entrepreneurialism in China. Secondly, studies on China’s education marketization are scarce and are mostly focused on the higher education sector (Mok, 1997; Ngok, 2007; Xiong, 2012). This paper fills the void of insufficient understanding of the marketization of the urban formal schooling system in China.

Supplemental Material

sj-docx-1-tup-10.1177_27541223231212456 – Supplemental material for Three waves of schooling marketization in urban China amid changing political economy since the 1990s

Supplemental material, sj-docx-1-tup-10.1177_27541223231212456 for Three waves of schooling marketization in urban China amid changing political economy since the 1990s by Mengzhu Zhang in Transactions in Planning and Urban Research