Last week, China's Ministry of Education released a new notice regarding the high schools' diploma program curriculum, stating that besides English, Russian, and Japanese, another three languages will be involved, including German, French, and Spanish.

During the past, due to that English is “a global lingua franca" with sufficient teaching resources, it has a dominant status to be selected when students taking the foreign language test in the college entrance exam(Gaokao). When we look at the number of candidates taking a foreign language test except for English, there are only 50 thousand test-takers for Russian and Japanese in 2019.

Yet in recent years, the number of test-takers for the other foreign languages except for English(hereinafter referred to as “other languages") is growing rapidly. “Other languages", especially Japanese, receive increasing attention in the past five years, with a 30% growth rate of Gaokao candidate numbers. Based on this, it is projected that the number of test-takers who do not choose English may increase to 130 thousand by 2022, accounting for more than 1% of all Gaokao candidates.

Amid such a burgeoning market, will the new policy bring more opportunities for language learning business operators? JMDedu wants to share our insights and the observation of market trends in this article.

Policy support for learning a second foreign language

In late 2013, MOE foreshadowed that the English test will be removed from the gaokao by 2020. Now, in some piloted provinces, tests are held several times a year, and students are allowed to choose when and how often they attend the examination, and only the highest score will be counted.

And before the newly launched notice, policies encouraging high schools to introduce more foreign language teaching programs have been released these years. Some high schools in first- and new first-tier cities have started to offer second foreign language classes. Some private and international studies secondary schools have also begun similar experiments.

Even some private high schools in third- and fourth cities are offering more categories of foreign language courses designed for Gaokao, to gain more differentiated advantages for their students to compete with English test-takers. For example, in Yantai and Jining, coastal prefecture-level cities on the Shandong Peninsula, some private high schools have designed Japanese courses and other languages on a large-scale with its geographical and cultural advantages. Multiple principals and educational departments have supported this kind of reform, and language teaching institutions benefit from the process as well. 

Market status:  interest-oriented, supplemented by studying abroad and employment

However, according to the data offered by iResearch in 2019, the market size of foreign language training except English is around 30 to 40 billion yuan, Gaokao-oriented demands contribute only 4% of the market - most businesses are based on consumers' interest, study abroad, and employment. 

As it is said, motivation plays a significant role in learning a language. Different from English learning driven by Gaokao and study abroad, more than 60% of the “other languages" learners are driven by interest. Influenced by the popular cultures, Japanese and Korean language learners have taken up most of the market share.

At the meanwhile, China is the largest overseas market for the Japanese-Language Proficiency Test. According to JLPT's official data, 1.01 million candidates attended the exam, of which more than 400,000 are Chinese, accounting for over 65% of the number of overseas test-takers. Besides, the Test of Proficiency in Korean(TOPIK), the Test d'évaluation du français (TEF), and the Test of Russian as a Foreign Language(ТРКИ) are all seeing an increasing number of Chinese candidates. 

Among the test-takers, an increasing number of them are driven by study abroad and career development. Last year, the number of Chinese students studying in Japan and South Korea exceeded 110,000 and 60,000 respectively, followed by Germany, France, Russia, Italy, and Spain, which have relatively positive economic and trade relations with China.

Market Expectation under the reform of foreign language test in Gaokao

There should be more business opportunities for the education of other languages except for English in the context of the Belt and Road Initiative, the expansion of foreign language majors' enrollment, and the increasing uncertainty of Sino-U.S. relations.

Will the Gaokao-oriented foreign language learning have great potential to stimulate the after-school tutoring market, which is still in its early development stage? And will it further spur the K-12 market, as well as the sector of study abroad services outside the English speaking countries?

Firstly, let's look at the supply-side. At present, there are four most common categories of service providers in this sector, including private middle schools and high schools, Gaokao-oriented foreign language tutoring institutions, ToB educational resources suppliers, and non-profit teaching institutions. 

Due to the shortage of foreign language teaching resources, public schools, private schools, and non-profit organizations can hardly deliver high-quality education in the long term. After-school tutoring institutions dominate the supply of Gaokao-oriented language teaching except for English. Compared to overseas institutions, local companies have advantages for easy access, extensive network, and precision marketing.

Then let's deep dive into the demand-side. From the perspective of industry insiders, the following factors will drive after-school tutoring demand for the other foreign languages in terms of Gaokao in the future.

On the one hand, as we mentioned above, candidates for other language tests could gain more differentiated advantages for avoiding the severe competition with English test-takers, which is the fundamental reason behind the demand for these tests. As the MOE expects, the number of Chinese Gaokao candidates will continue to increase in the following decade. As a result, the number of students enrolling in other foreign language tutoring courses and tests is likely to proliferate.

On the other hand, the demand for a diverse set of foreign language learning and the studying abroad market potentials are unleashing. As examinations in Chinese schools at all levels include English proficiency tests with the popularity of English education in China, some students and parents from the first-tier cities are no longer satisfied with learning a single foreign language. Meanwhile, due to the increasing uncertainty of Sino-U.S. relations, changing employment policies for international students in the US, UK, and Australia, and the COVID-19 epidemic, the sector of study abroad in emerging destinations will usher in a burgeoning stage.

However, the Gaokao-oriented foreign language tutoring market is still in its initial stage and needs a long time to develop. Based on the annual growth rate of 30%, there will only be around 200 thousand test-takers in 2025, still a small portion of all Gaokao candidates. Unless significant changes in policies take place, the after-school training sector for other foreign languages is likely to be minority business for the long term. Changes such as the general acceptance of other foreign languages in high schools nationwide, extra points in Gaokao for other language test-takers, and an intensive situation in English speaking countries for international students. Yet beneficial until the market expands to a certain scale. 

Therefore, offline business operators in this market still need to build up a model involving multiple languages and facing various demands. For overseas enterprises that are planning to tap into the Chinese market as its top priority, they are recommended to do a comprehensive analysis and conduct a competitive market landscape when making a decision.