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Preschool Education: A Promising Industry
The pre-school education sector (for children ages 0 to six) has become a promising industry in Beijing.

Over 20 pre-school education institutes have been established in the city, most of which are chain enterprises, according to official statistics.

Companies such as Oriental BabyCare and US-based Baby Care and Fun Dazzle all have different operation and education methods.

As the only professional and privately funded baby care center in Beijing, Oriental BabyCare opened in 1998 and now has five locations. Four of the centers are for children age between 0 and three and one is for pregnant parent training. Investments total 10 million yuan (US$1.2 million).

Jia Jun, general manager of Oriental BabyCare said she uses the PAT (Parents As Teachers) education model, which was first introduced in Western countries and has revised it to make it compatible with Chinese culture.

"We plan to add 30 centers in 26 Chinese cities by May and hope to open another 20 by the end of the year," Jia said.

US-based Baby Care, a multinational company well known for its baby health care food, started offering free baby care and infant education courses for Chinese clients in 1998.

Eyeing the new sector's potential, Baby Care created its consultant and education component as an independent business in 1999.

It has opened two centers in Beijing with parental training courses that teach nutrition, baby intelligence and child psychology

"The teachers are all experienced mothers, many with a medical and baby education background," a manager with Baby Care said.

It also has another baby care center in Dalian, Northeast China's Liaoning Province.

"From 1999, we have pooled US$13 million in China, which were all from our six shareholders, including Bank of America, DDB Investment Bank and Baby Care Ltd," the official said.

Fun Dazzle entered China in 1994 and is mainly engaged in business of entertaining children.

"We provide multiple services for children, such as entertainment, education and restaurants," said Zhang Yonghong, general manager with Fun Dazzle China.

"Our method is to teach children through entertainment, helping them establish healthy mindsets."

Fun Dazzle's first phase of investment in China was 12 million yuan (US$1.45 million) for a center in Beijing and one in Shanghai.

The company hopes to establish 80 more institutes across the country, each with a franchise participation of no less than 200,000 yuan (US$24,000), Zhang said.

All three pre-school education companies said due to high costs and peoples' limited understanding of professional pre-school education, profits are currently limited.

But they believe the market has huge potential due to rapid economic development in China and an increasing awareness of pre-school education.

There are currently over 20 million families in China with children between 0 and three years old and the annual birth rate is estimated at 7 percent between 2001 and 2005, according to the China Population Statistical Yearbook.

Experts say that in a one-child family, over 30 percent of household expenses is for the child.

The government has taken measures to administrate the market. The Beijing municipal government issued regulations on pre-school education last June.

However, experts say there are still problems that investors should carefully consider.

Since most education models are introduced from Western countries, revising them in accordance with Chinese culture might pose a great challenge for institutes.

Qualified teachers are also one of the core elements in maintaining education quality, but regulations have not listed specific requirements for teachers.

(China Daily February 20, 2002)

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