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Outside, immaculate fields fill with the cheers of soccer teams while inside kayaks race across a heated swimming pool. From both locations, it’s possible to hear the strains of a melodious live symphony. It’s tough to get in here, but this isn’t Club Med – it’s the Shanghai American School (SAS) in Puxi, and there’s a waiting list at almost every grade level. For 1,700 lucky students last year, the applications came through. The school expects total enrollment at its 29-acre Puxi and 22-acre Pudong campuses to increase from 2,700 this past semester to 2,900 in the fall.

SAS’s numbers are merely one barometer of an educational industry that is experiencing mercurial growth. Currently, there are nearly 30 international schools in Shanghai and more than 40 in Beijing, ranging from pre-kindergarten to high school. Some schools, such as Concordia International School Shanghai have recorded as much as a steady 20% increase in applications across grade levels over the past few years.

Part of the reason for the booming demand for seats in international schools is because many Chinese schools still do not accept foreign nationals. As more and more foreigners pour into Shanghai, Beijing and other first- and second-tier Chinese cities for work, most expatriate parents can only look to the service of international schools. Another reason for the demand is the expectations of parents, including those from Hong Kong and Taiwan, who have the cash and cite English-language curriculum, high-tech facilities and qualified faculty as major factors in their decision in choosing international institutions, which typically charge an astounding RMB 75,800 per year for pre-kindergarten and over RMB150,0000 for grades 1-12.

Also, almost all international schools in China today offer courses for credit in overseas schools, such as Advanced Placement (AP) and International Baccalaureate (I:cool: classes, and more are offering bilingual programs for study in both English and Chinese language. The ability to prepare students for a globalized world is the selling point of international schools.

As a result, as the kids return to school this August, it’s not just their futures that administrators and investors are studying – it’s also the market these kids have created. The booming demand for seats in international schools has instigated expansion and transformation in the industry. Schools are scrambling to grow and beat out competitors for the new kids. However, expansion can be expensive, as international schools do not enjoy tax breaks or other incentives to set up in China. Schools thus remain bullish as demand currently exceeds supply.

In response, some schools have turned to new opportunities in new markets. For example, Dulwich College, a preschool through year 13 institution, opened a new school in Suzhou this August. Others, like Concordia’s Jinqiao campus in Shanghai, have been focusing on constructing special features, such as a fine arts center, slated for fall completion, which will feature a 450-seat theater, drama, music and art rooms and a rooftop garden.

But it’s not just infrastructure and facilities that these schools are investing in – it’s also faculty and philosophy. According to John Stadler, CEO of the Institute of Digital Design and editor of the Stadler’s Education Guide series, international schools in China are similar to Western schools, where approximately 80% of expenditures go to payroll. Also, many of the schools hire faculty from overseas, pushing up cost. Chinese schools – even Chinese private schools – are sometimes the reverse (20% to payroll, 80% to hardware such as facilities and equipment, plus return to investors, etc.). “Partially, this reflects different labor markets, as international teachers are about ten times the cost of local hires,” he says. “Partially it reflects the willingness of consumers to spend on high-quality teaching.”

Despite this high rate of expenditure, like all industries in China, attracting and retaining talent is also a challenge for international schools, where the average turnover rate was a high 7.7% last year. Today, teachers expect greater fringe benefits than that apple on the desk. At Concordia, over 70% of the operating budget was dedicated to faculty salaries and fringe benefits in the 2006-2007 semester. Michael Dougherty, board member of Shanghai Community International Schools (SCIS) says, “In addition to salaries, we pay Chinese income tax on teachers’ behalf, and for overseas hired teachers, we provide furnished apartments, annual airfare, health insurance, and so forth.” Dougherty says that although compensation is the greatest expense, the money is worth it because “what parents see as ‘the school’ is our teachers.”

Yet the challenge for international schools doesn’t end here. The development of new competition via innovative new programs offered by local Chinese schools ensures certain new competition. One of the major developments over the past five years is a marked increase among Western parents for more emphasis on Mandarin fluency, says Dougherty. To meet this need, some parents are turning to local schools with an international division – programs with a bilingual curriculum that allow both Chinese and foreign nationals to enroll.

Moreover, since Chinese students were prohibited from attending international schools due to government regulation, the demand for this mix is growing as more parents, both foreign and local, hope to immerse their children in an international and multicultural environment from an early age. Yew Wah International Education School is one of these local schools. Originally established by the founders of Yew Chung International School, Yew Wah International Education School runs under different jurisdiction than international schools and thus may also service local students. 

Tuition at such programs is also significantly less than traditional international schools, which is a major consideration as fewer companies include children’s education in expatriate benefits packages. For example, Shanghai Pinghe International School, another local school with an international division, offers an International Experimental Program, which teaches in both Chinese and English at a tuition of RMB45,500. Yearly tuition at Yew Wah International Education School ranges from RMB56,000–RMB70,000, depending on grade. In comparison, annual tuition fees in international schools in Shanghai average RMB140,000.

But the curriculum and culture at these schools can be very different from what many parents expect, and some have discovered they aren’t prepared to sacrifice their children to the rigorous demands of Asian academic practices. U.S.-native Laurie Underwood had enrolled both her 10-year-old son and 12-year-old daughter at one of the local schools to ensure that they grew up bilingual. During the first grade her daughter was in school from 7:30 a.m. to 7 p.m. every day, and the little girl had difficulty sleeping at night due to anxiety about exams. When Underwood’s daughter’s English proficiency fell behind her peers attending international school, Underwood decided to transfer her daughter to Concordia.

Hong Kong-nese mother Edith Lin also transfered her daughter from a local school to Yew Cheung International School since she noticed some problems created by a classroom comprised of only-children. She claimed her daughter was not learning basic values such as how to share, and becoming materialistic as she observed her sibling-less classmates being showered with gifts by their parents and grandparents. Both Underwood and Lin are paying tuition out of pocket, without aid. For them, as long as they can afford it, their children are worth the best.

International schools adhere to heavily Western-focused curriculum and the more Western style of teaching, which requires less memorization and shorter hours. The Chinese government maintains the loosest of regulation, and international schools currently enjoy the liberty to write their own curriculum and operate independently. According to Dougherty, China’s Ministry of Education rarely interferes in curricular issues, aside from occasionally rejecting objectionable history textbooks at customs.

In the future, “I believe the government will be more closely scrutinizing international schools, not so much to interfere but to adapt what they like to their own system,” Dougherty says. If so, Chinese youth have swimming pools to look forward to in their after-hours rather than study hall.