China - Eastern promises

Early years provision in China is a huge growth market, with UK nurseries large and small taking up opportunities to open there. So, what are the pros and cons of doing business in this very different country?

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Last year, Carlisle-based nursery Stone Eden opened an EYFS setting in China. The 120-place single-site operator sold a franchise to its first enquiry – from a couple who had run a lighting business in London and wanted to set up an English-style setting in China for their children. Now with a similar-sized setting in a state-of-the-art opera house in the business district of Guangzhou, a city of 14 million people, managing director David Farrell says it has been a ‘very, very good’ experience, adding, ‘He is English, she is Chinese – it is a very positive relationship.’

His fees total 10.5 per cent of turnover, which he says is standard for the franchising industry, but adds, ‘Profit wasn’t the driver – our motivation is getting the name out there and doing something different. We love travelling; it is exciting.’

Expanding in China is proving tempting for many: with the fastest-growing market for early years in the world, the private Chinese education market is worth around $260 billion. This is due in part to a relaxation of its one-child policy in 2013, and increasing numbers of women in work.

Mr Farrell says English-style settings are also in big demand. ‘They want to buy English culture and they want the English curriculum. I think while they initially targeted the expat market, [much of the growth] has actually been Chinese parents who want to get their children to speak English.

‘Traditionally children up to five were cared for informally by family. It is still relatively slow, but it is going to boom.’


Courteney Donaldson of property experts Christie & Co says the ‘unprecedented growth’ during the past five years was down to Chinese childcare providers and investors ‘seeking to capitalise on the existing expertise and strength of early years brands outside of China’.

One of the most well-known is Busy Bees, which opened its first setting here in 2017 and is planning 33 nurseries by 2023. But as Stone Eden’s experience shows, businesses of all sizes are also getting in on the act.

These are relationships the UK Government, amid Brexit uncertainty, is keen to matchmake. The Department for International Trade (DIT) held its first trade mission in 2017, bringing a Chinese delegation over here, and has held business matching events. It put Kangaroo Pouch, a West Midlands-based chain of 11, in touch with Chinese childcare operator Jiangsu Junyi Education Group, and the duo opened their first two British-style settings in Nanjing this month.

Managing director Anita Patel Sahota says, ‘I can’t stress enough the importance of DIT. If a [Chinese operator] comes through DIT, we know the business exists, and that they have a need. Then it comes down to the nitty gritty – if you can do business with them. Had I been contacted by a random email, I think it would be different.’

Ms Patel Sahota says she liked the fact that ‘they know children. They were seasoned operators who actually do childcare. Building relationships, and that rapport, is really important.’

The relationship between Kangaroo Pouch and Jiangsu Junyi was formed through conducting mutual visits to each other’s settings before anything was agreed. The Chinese partner will operate the Nanjing setting, which will bear the Kangaroo Pouch name, with plans for 14 more over three years.


Under the model, Kangaroo’s dedicated team (including a chief advisor for China, Steven Yang) provides training, quality assurance and inspection visits, while the operating partners deal with regulations, licensing, deciding where to open, and actually running the setting.

The EYFS will be delivered ‘using a curriculum we have designed together – the Chinese approach blended with EYFS’, while the new buildings have been renovated by both parties, with Ms Patel Sahota insisting upon child-size sanitaryware such as sinks, and outside space.

At Stone Eden, the Chinese owners will become master franchisees so they can open sites independently elsewhere in China. ‘It almost looks like our place, which is exactly what we wanted,’ says Mr Farrell. There is no outdoor space but an ‘indoor-outdoor’ room. Stone Eden China works off exactly the same model as its UK counterpart, right down to using the same policy and procedure forms – translated from English into Chinese.


Under this deal, Stone Eden’s staff go out to China three times a year, do a support and quality visit to check standards are being adhered to and provide ‘hotline’ support via WeChat. They also helped with initial recruitment (the setting then recruited its own ‘experienced British manager’), and provided three weeks’ induction training.

For future expansions, Stone Eden will work with the Guangzho ‘HQ’. Mr Farrell says, ‘We would then audit the head office in Guangzhou – not audit 50 nurseries in China, for example. It is really not for us to get involved – that is not how franchises work’.


In a country that has 65 cities with more than a million people, an entirely different political system, strict controls on certain freedoms (Google, YouTube and WhatsApp are blocked), plus a language that is not spoken by many Brits, opening in China is obviously more complex than doing so in the UK.

Ms Patel Sahota talks of the importance of having a good interpreter, adding, ‘You still have to remember it is another country. They practise in ways they are accustomed to.’

And the business side of things can take its toll. Ms Patel Sahota advises to ‘be prepared for long hours’, adding that the eight-hour time differences mean that her days can start at 3am. Agreements should be based on ‘risk and reward calculations. The finances are no different from if you were doing a nursery in the UK. Decide what sort of agreement you want – and negotiate face to face.’

Mr Farrell recommends using a franchise consultant, a franchise website to list your offer, and having a prospectus to send out. ‘Franchise consultants tell you that you need 100 enquiries to sell one,’ he says.

There are more fundamental tensions too. ‘Some providers who have ventured into China haven’t found it as easy as they hoped,’ Ms Donaldson says. ‘There have been challenges about what they were looking for and what China is looking for.’

Catherine Lyon, founder of learning journey software company Spark, and now sparkCHINA, first visited the country in 2015, an experience which ‘made me realise how lucky we are here with our EYFS’. In a blog, she described practice that was ‘very institutional, instructional and authoritarian’.

One setting used a loudhailer to move children between rooms, while exercise time at another involved every child ‘making the same movements with their bodies, the group waiting while “the teacher” placed the right limb into the proper position’. She saw ‘a water feature with very little play value (turned off) in the area named “Reggio Emilia” but void of any other resources. I saw books in the two smaller settings. The emphasis was placed upon discipline rather than learning and there appeared to be a total lack of curriculum framework.’

Now offering consultancy to UK settings thinking of expanding in China, Ms Lyon is positive about the opportunities in the country, but acknowledges ‘it is currently very difficult to have an English level of EYFS in China. It is also important to build in their own culture.’

In reality, she says, Chinese nurseries ‘may take on the theory but find it really difficult to do the practice as the EYFS is so alien to their own educational experience. It is really hard for them to understand the terminology: child-centred, play-based learning, parent participation, treating children as unique individuals, etc. So it is also difficult to keep good practice in place because as soon as things start to get a bit difficult, they go into default and back to the “Chinese way”.’

Parents are keen for something different, she adds, ‘but don’t know what that should be. Most of the kindergartens, if not all, have not yet embraced parents as partners. In China, if the weather is bad, parents just don’t take their children to kindergarten. Alternatively, if working, they have similar problems to us here but do not embrace the need to change that for the child’s benefit.’

Ms Lyon continues, ‘There are pockets of OK and good provision. I have also met investors/managers who want to influence change. It takes a lot of time building relationships with these people, then for them to accept and take on the education they need to understand what EYFS means.

‘Many see it as a USP to offer the EYFS and most still offer classes in both – Chinese or EYFS – as they are scared to commit to just one way.’

Regulation in China by Courteney Donaldson, Christie & Co

In November last year, a new policy came in banning private kindergarten businesses from seeking public listings and for-profit kindergartens from raising funds from listed companies. This was thought to be in response to the private equity money flooding into the country, driving up prices. Sudden policy changes such as this, which are part of efforts to refine China’s burgeoning childcare market, pose risks for operators and investors.

There are also increasing tensions over curriculum. While China doesn’t have an equivalent to Ofsted, with inspections being carried out by local government, both EYFS and Montessori nurseries in some parts of China have been told by local education authorities to move towards a more traditional Chinese teaching approach.

In China, fees have not historically been controlled by the National People’s Congress (NPC), with rates generally set according to the quality of the setting and the province or city in which it is based. However, the NPC is increasingly mindful of the cost incurred by parents, and local authorities introduced fee restrictions in some provinces last year.

This predominantly affects premium settings in cities. For example, a private provider which had been trading for many years in Shanghai had to drop its weekly fee from £350 to £120 for 12 months, which would have had a dramatic impact on the business’s financial performance.

At the same time as these restrictions, in March 2018, China’s premier, Li Keqiang, announced his government would be willing to spend more on childcare services, partly to help boost domestic consumption. The legislation following this is yet to be agreed.

To read Catherine Lyon’s blog in full, see

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