Three-child policy in China, implications for the day nursery sector
Following the revocation of the one-child policy in China, the country has seen its population expand with the highest number of newborns recorded in two decades. While the number of births is increasing under the current two-child policy, some Chinese officials are concerned that the rate of growth is not substantial enough.
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A proposal was recently drafted by a deputy to the National People’s Congress (NPC), China’s top legislature, suggesting the implementation of a three-child policy to ensure that the rate of births meets the government’s expectations.
An increasing number of newborns in China directly correlates with a growing need for nursery and day care services, and if a three-child policy were introduced, the shortfall in existing nursery supply would be further compounded against a backdrop of greater demand. The market share of private pre-schools has significantly increased following the revocation of the historic one-child policy, yet the supply of high quality provisions still lags behind the high level of demand. Supply is set to grow as new nurseries open, while equally demand for highly qualified early years teaching staff will also grow rapidly.
It is important to be aware that while the proportion of nursery and pre-school age children and demand for day care grows, so too do certain market pressures. Staff recruitment can be incredibly challenging, particularly in a newly emerging market. Compounding this, there has been growing demand from aspirational Chinese parents seeking premium early years bi-lingual education, so the requirements for both British curriculum nurseries and English speaking, qualified teachers and early years practitioners in China may be greater than in other markets.
With a new policy allowing parents to further grow their families, teamed with a current shortage of childcare facilities and a desire for ‘western education’, opportunities are abundant for providers looking to capitalise on the market. Chinese operators are keen to work with experienced British and European day nursery groups, for example one of the UK’s largest groups, Busy Bees, recently announced a five-year partnership with the Chinese Oriental Cambridge Education Group to open 32 nurseries across China.
The introduction of a three-child policy would undoubtedly fuel further upsurges in expansion interest, as was the case with the introduction of the two-child policy. However, expansion does not come without risk. As with all business development, considerate research, planning and due diligence should be undertaken – this will mitigate, albeit not entirely alleviate, the associated risks.