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Education is state-run, with little involvement of private providers in the school sector, and increasingly decentralized. County-level governments have primary responsibility of the governing and delivery of school education¹¹.

State budgetary allocation is the main source of funds for education in China. China’s central treasury and local treasuries contribute to education funding¹¹.

The education system in China is funded by a number of sources. Government appropriations are the major source of funding. Government appropriations are comprised of budgetary and non-budgetary funds, of which budgetary funds are the main component. Budgetary funds, or public expenditure on education, include funds from both the education sector and other sectors. Non-budgetary funds include taxes for education levied by local government, educational funds from enterprises and other funds that belong to government appropriations. Additional financial sources for education include tuition fees, donations and fundraising. Other than government appropriation for education, private organizations and individuals are the principal sources of funding for schools run by these organizations or individuals¹¹.

Among government supporting, central government’s contribution is estimated at around 16% between 2015-2017[1]^,[2].

2018 total national contributions according to MOE:[3]

	¥, in billions
Pre-school Education[4]	367.2
Compulsory Education[5]	2,085.8
Regular Senior Secondary Schools[6]	472.1
Secondary Vocational Schools[7]	246.3

[1] http://www.21jingji.com/2019/6-5/wMMDEzNzlfMTQ4OTYwMw.html

[2] http://www.cnki.com.cn/Article/CJFDTotal-DYLC201903006.htm

[3] http://www.moe.gov.cn/jyb_xwfb/gzdt_gzdt/s5987/201904/t20190430_380155.html

[4] http://www.moe.gov.cn/s78/A03/moe_560/jytjsj_2017/qg/201808/t20180808_344728.html

[5] http://www.moe.gov.cn/s78/A03/moe_560/jytjsj_2017/qg/201808/t20180808_344722.html

[6] http://www.moe.gov.cn/s78/A03/moe_560/jytjsj_2017/qg/201808/t20180808_344797.html

[7] http://www.moe.gov.cn/s78/A03/moe_560/jytjsj_2017/qg/201808/t20180808_344778.html

Series B-4: Curriculum requirement

The following discussions are according to The Basic Education Curriculum Reform Outline (Ministry of Education, 2001) [1], and the 2016 OECD report mentioned previously.

Primary education

The primary school curriculum should consist of courses that encourage all-around development of individual learners. This document suggests that schools offer courses like morality and life, Chinese, mathematics, physical education and art to primary students in lower grades. Morality and society, Chinese, mathematics, science, foreign language, comprehensive practical activity, physical education and art should be offered to primary students in higher grades.

Junior secondary education

The curriculum for junior secondary students mainly includes morality, Chinese, mathematics, foreign language, science (or physics, chemistry and biology), history and society (or history and geography), physical education and health, art and comprehensive practical activity. Schools are encouraged to choose comprehensive courses, and to offer optional courses as well. The government emphasizes that Chinese, art and painting courses in compulsory education should attach more importance to Chinese character (script) writing.

Senior secondary education

When it comes to senior secondary school, the government suggests that schools offer various elective subjects in addition to the compulsory subjects. The requirements in elective subjects should be different from the requirements in compulsory subjects. Throughout primary and secondary education, the comprehensive practical subject is emphasized as a compulsory subject. The subject covers information technology, research study, community service, social survey, and labor and technology for primary and junior secondary school students. It covers research study, community service and social practice for senior secondary students. The comprehensive practical subject aims at improving students’ creativity and research capability, as well as helping students develop a sense of social responsibility through practical experiences.

[1] http://old.moe.gov.cn//publicfiles/business/htmlfiles/moe/moe_309/200412/4672.html

Series B-3: Enrollment

The following discussions come from a 2016 OECD report “EDUCATION IN CHINA: A Snapshot”[1].

In China, students usually enroll in pre-school at age two or three, and leave pre-school at the age of six. Pre-school education is not compulsory, and many pre-schools are privately owned. However, the government has taken on a more proactive role in promoting access following a national commitment to progressively universalize one to three years of pre-school by 2020.

In China, students must complete nine years of compulsory education. Most students spend six years in primary school, though a few school systems use a five-year cycle for primary school. Primary education starts at age six for most children. This is followed by three to four years of junior secondary education.

After finishing compulsory education, students can choose whether to continue with senior secondary education. Senior secondary education takes three years. There are five types of senior secondary schools in China: general senior secondary, technical or specialized secondary, adult secondary, vocational secondary and crafts schools. The last four are referred to as secondary vocational schools.

Although senior secondary education is not part of compulsory education in China, in 2014, 95% of junior secondary graduates continued their study in senior secondary schools (National Bureau of Statistics of China, 2015). This figure is notable because in 2005 only around 40% of junior secondary graduates attended senior secondary schools (National Bureau of Statistics of China, 2005).

[1] http://www.oecd.org/china/Education-in-China-a-snapshot.pdf

Series B-2: Number of schools in Chinese K-12 system

According to China’s Ministry of Education (MOE) statistics for 2017,

	Number of schools
Pre-school Education[1]	254,950
Primary Schools[2]	167,009
Junior Secondary Schools[3]	51,894
Regular Senior Secondary Schools[4]	13,555
Secondary Vocational Schools[5]	8,181

[1] http://www.moe.gov.cn/s78/A03/moe_560/jytjsj_2017/qg/201808/t20180808_344728.html

[2] http://www.moe.gov.cn/s78/A03/moe_560/jytjsj_2017/qg/201808/t20180808_344722.html

[3] http://www.moe.gov.cn/s78/A03/moe_560/jytjsj_2017/qg/201808/t20180808_344763.html

[4] http://www.moe.gov.cn/s78/A03/moe_560/jytjsj_2017/qg/201808/t20180808_344797.html

[5] http://www.moe.gov.cn/s78/A03/moe_560/jytjsj_2017/qg/201808/t20180808_344778.html

Series B-1: Number of students in Chinese K-12 system

According to China’s Ministry of Education (MOE) statistics for 2017,

	Entrants	Enrolment	Graduates
Pre-school Education[1]	19,379,530	46,001,393	16,526,663
Primary Schools[2]	17,665,544	100,936,980	15,658,999
Junior Secondary Schools[3]	15,472,209	44,420,630	13,974,699
Regular Senior Secondary Schools[4]	8,000,548	23,745,484	7,757,292
Secondary Vocational Schools[5]	4,515,235	12,542,893	4,063,981

[1] http://www.moe.gov.cn/s78/A03/moe_560/jytjsj_2017/qg/201808/t20180808_344717.html

[2] http://www.moe.gov.cn/s78/A03/moe_560/jytjsj_2017/qg/201808/t20180808_344720.html

[3] http://www.moe.gov.cn/s78/A03/moe_560/jytjsj_2017/qg/201808/t20180808_344762.html

[4] http://www.moe.gov.cn/s78/A03/moe_560/jytjsj_2017/qg/201808/t20180808_344796.html

[5] http://www.moe.gov.cn/s78/A03/moe_560/jytjsj_2017/qg/201808/t20180808_344777.html

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Series A-5: What problems are these companies facing in hiring talents, conducting trials or launching products?

Talents

The lack of talents has been a well-recognized problem for China’s biotech industry[1]. China lacks seasoned experts with at least 10 years’ industry experience, say insiders. Companies are especially keen on experience in translational medicine, early-stage clinical trials and antibody manufacturing. Start-up biotech firms need experienced managers at every level, from clinical trials to drug manufacturing processes, to help build their companies[2].

This path from multinational drug company to biotech is clearly seen in the bios of many of the more ambitious start-up founders. Returnees with a few years under their belt in China and an ability to effectively navigate the system are far more valuable to employers than new arrivals. It becomes fairly common that multinational biopharma firms are finding themselves battling Chinese biotechnology startups to attract talent^38,[3]. Those startups flush with cash from venture-capital financing are willing to pay top dollar (and upsides with options).

Trials

In terms of conducting trials, a historical lack of clinical research infrastructure in China has led to problems adhering to Good Clinical Practice, the international gold standard for maintaining ethical and quality standards in clinical trials. As an example, nearly all clinical research sites in China are hospitals, as there are no private practices. Because of that, clinical trial participants are treated exactly the same way as regular patients. That’s a problem because study staff — who are regular hospital employees — don’t have experience complying with Good Clinical Practice, putting the trial’s integrity, not to mention patient protection, at risk[4]^,[5].

Meanwhile, the rapid growth of Wuxi AppTex (and its affiliated Wuxi Biologics) has made itself one of the largest CRO/CMO players in the world[6], helping to facilitate drug discovery/development/manufacturing globally.

Launches

As most Chinese biotech startups are still in the r&d stage, only a few were approved recently. The most relevant example here might be the PD-1/PD-L1 space.

CFDA has long been seen as “slow” in terms of new drug approvals. A 2016 discussion quoted that usually a new drug needs 5-10 years for approval[7].

However, for the recent domestic PD-1 drugs for cancer, the approval speed was amazingly fast. Junshi won the first made-in-China PD-1 drug approval by NMPA (formerly CFDA) in December 2018[8]. Ten days later, the second PD-1 drug by Innovent was approved[9]. Each took 284 and 255 days respectively[10].

Two foreign PD-1 drugs, Merck’s Keytruda and Bristol-Myers Squibb’s Opdivo, were approved earlier in 2018. During 18Q3, Keytrude and Opdivo recorded ¥150 and ¥190 million in sales respectively[11].

Junshi started its sales in February 2019 and recorded nearly ¥80 million in the first quarter[12]. Innovent’s PD-1 launched its sales in March 2019 and finished the first quarter with $9.9 million in revenue, both of which are deemed as successful in media reports[13].

[1] https://www.kornferry.com/institute/download/download/id/17053/aid/219

[2] https://www.huamedicine.com/upload/down/5870180130135508.pdf

[3] https://www.ft.com/content/d3a2de0e-6fbb-11e8-92d3-6c13e5c92914

[4] https://www.statnews.com/2018/08/03/china-clinical-trials-infrastructure-transparency/

[5] http://www.appliedclinicaltrialsonline.com/running-clinical-research-china

[6] https://explorebiotech.com/top-cros-usa-contract-research-organization/

[7] http://journal.healthpolicy.cn/html/20160304.htm

[8] https://endpts.com/junshi-wins-the-race-for-first-made-in-china-pd-1-approval-as-execs-reap-394m-ipo-harvest/

[9] https://endpts.com/china-greenlights-second-homegrown-pd-1-in-10-days-as-innovent-celebrates-its-first-drug-ok-with-eli-lilly/

[10] https://www.bjcancer.org/Html/News/Articles/9321.html

[11] https://www.yicai.com/news/100135300.html

[12] https://xueqiu.com/8965749698/125984469