Chinese Flock to English Class
Learning the Language
Is Viewed as Key
To Opening Opportunities
BEIJING -- English, the language of global commerce, is itself becoming big business in China, as the country's growing middle class pays to feed its hunger for international savvy.
When Wall Street Institute opens one of its English schools in a new city, it usually takes at least a year to enroll 1,000 students. Its first school in Beijing, opened in May 2000, topped that mark in a few months. Five years later, Wall Street Institute has 14 branches in three Chinese cities and is preparing for a major expansion. In February, U.S. private-equity firm Carlyle Group bought the Baltimore company, in large part because of the venture's "tremendous" potential in China, says Brooke Coburn, the Carlyle executive who did the deal.
CHINA: SERVE THE PEOPLE
Read the other stories in the first part of this series:
? Local M.B.A. Programs Flourish
? Higher Education for Sale
The English-teaching business is booming in China, an example of the opportunities opening up as the spending power and sophistication of China's people increases. Foreign and domestic investors are flocking to serve the burgeoning group of Chinese who have both the interest and the means to learn a language seen as a vital for improving their future. Industry executives estimate there are as many as 30,000 English-teaching schools and companies across China. For some of them, the trend is proving lucrative, though profits are far from guaranteed in an increasingly competitive market.
Demand is coming from a broad swath of society. Chinese parents, who traditionally place a huge premium on their children's education, are lavishing money on English study for their children. Working adults are learning the language as a path to better-paying jobs with foreign businesses, while Chinese companies, increasingly eyeing overseas markets, are pushing their employees to learn English, too. For some, learning English has even become a kind of accoutrement, a "symbol of social status," says Terence Peng, a former Microsoft Corp. researcher who now helps run Dell English International, of Beijing.
New Oriental Education & Technology Group, China's biggest chain of English schools, expects nearly $90 million in revenue this year, on which it will earn a healthy profit, says Chairman Michael Yu. Wall Street Institute has 13,000 students in China, and expects revenue there to increase nearly 13% to about $27 million this year, from $21 million in 2004. After several years of investing to build a presence, it expects to turn its first profit in China this year. Tim Daniels, chief executive of the Baltimore company, expects China to become its biggest market within three years.
Dorothy Zhen, a 25-year-old reporter for a Beijing newspaper, plunked down 22,000 yuan, about $2,720, recently for 18 months of English lessons at Wall Street Institute, which goes by "Wall Street English" in China. She wants to land a spot at a foreign joint venture and says "fluency in English speaking and writing will give me more advantages" in the job hunt.
Chinese officialdom also is embracing the English boom. Hoping that the hordes of foreigners that will descend on Beijing for the 2008 Olympics, and on Shanghai two years later for the World Expo, will be impressed by the country's cosmopolitanism, the local governments in both cities have kicked off "Everyone Study English" campaigns. Taxi drivers are getting supplied with cassette tapes for studying while on the job.
English study long has been popular in other Asian countries, but industry executives say the speed and strength of the recent boom in China is remarkable. EF Education, a Swedish company founded in 1965, opened its inaugural English First school in China in 2000, and the country already is its biggest market for English instruction. Olaf Rietveld, who runs the company's Chinese operations, says study in China is more intense than in countries such as Indonesia and Thailand. "It's pretty serious business in China," he says.
Beyond the Classroom
English First offers classes for adults as well as corporate training, but it also focuses on younger children. In most other markets, children start its classes as early as age seven. In China, the company offers classes for pupils as young as four, in response to demand from parents. The hope is they will keep coming back. "The kids running around here, we hope that they're going to be with us when they're 18 or 19," Mr. Rietveld says.
The zest for English is creating opportunities beyond the classroom. Hogan Sun has parlayed his own language aptitude into a growing multimedia empire. He could barely speak a sentence of English nine years ago, when, while working at a Beijing television station, he stumbled into a job producing a five-minute-a-day English program. He was a quick study. Within a couple of years, Mr. Sun was hosting the program, and, by 1998, he had started his own company.
Now Mr. Sun markets a range of products under his Modern English brand, including classes, books and CD-ROMs. Last year, he reached a deal with Fairfield Language Technologies to offer online language training in China using the Harrisonburg, Virginia, company's Rosetta Stone software. He has a children's program in addition to his weekly English-education show, which is carried by 60 stations covering 300 Chinese cities. Mr. Sun still stars in the show, a role that has made him famous.
"People recognize me as the fat guy who speaks English," laughs the jowly Mr. Sun, whose smooth English is peppered with Americanisms. For its latest venture, Mr. Sun's company last month launched a TV game show modeled on "American Idol" in which contestants, instead of singing, compete by speaking English.
In China, English has been taught for decades, but it long was the province of the state-run education system. That started to change in the early 1990s, thanks in part to Mr. Yu's New Oriental. Mr. Yu learned English as an undergraduate at China's prestigious Peking University. After graduating, he spent several years fruitlessly trying to get a scholarship to a U.S. university.
When he had spent all of his money on application fees and postage, Mr. Yu decided to teach English full-time as a way to pay the bills. He quickly realized there was an opportunity in offering an alternative to the staid style of instruction he had experienced in college, where teachers tended to be older and "very boring."
So Mr. Yu set out to teach English with some pizzazz. He opened his first school in 1993, after spending six months wooing education officials for a license. His first class had just 30 or so students, he recalls, but word spread quickly. "When New Oriental came out, [students] found they could learn the same material, but that the classes are so happy and so interesting," says the affable 43-year-old, whose constant smile has etched parentheses in his cheeks.
By the end of 1995, New Oriental had about 20,000 students. Mr. Yu made his first trip to the U.S. that year, and hired some former classmates who had moved there. In 2000, as Wall Street English was setting up shop, Mr. Yu began expanding outside Beijing.
Spreading Out
New Oriental now is the biggest English-teaching company in China, with 800,000 students in 20 cities. Revenue is expected to rise more than 20% this year to about 700 million yuan, and the company's net profit margin is about 12%, Mr. Yu says. He is considering seeking a public listing, perhaps on the Nasdaq Stock Market.
For now, Mr. Yu's main goal is an expansion that will put New Oriental at the forefront of the race to spread to less prominent Chinese locales. English schools have proliferated in many second-and-third tier cities, but they tend to be less well-run, offering an opportunity for Mr. Yu's better-known operation. In the next three-to-five years, he aims to push New Oriental into nearly every Chinese city with a population of more than 500,000 -- about 100 in all, he estimates. For inspiration, he looks to an American company that has expanded quickly. "We can be like a local Wal-Mart" in the English industry, he asserts.
Pedagogical styles run the gamut in China's English-teaching business. On a hot afternoon in August, nearly 200 students crammed into a long room in a building near Beijing's university district for one of New Oriental's classes for beginners. Teacher Duran Weng, a 30-year-old with spiky hair and a goatee, leads the students in basic grammar lessons, interspersed with his own observations on cultural distinctions between China and the West. Students in the back of the room watch him on closed-circuit TVs suspended from the ceiling. About 80% of the lesson is in Chinese.
At the other end of town, at Wall Street English's main Beijing location, students crowd around Dell computers in a language lab. Wall Street English uses proprietary software to teach its lessons, with students checking their pronunci
ation by speaking into microphones monitored by International Business Machines-based voice-recognition programs. That is supplemented by small English-only classes with foreign teachers. In one such session, four students practice how to buy and sell a used TV, their British instructor offering pointers. Only English may be spoken.
The English-teaching business in China can be thorny. Because education remains a sensitive industry, government regulation is heavy. Finding qualified managers to run facilities is often difficult. Foreign investors must work with local partners, and licenses for new schools and visas for foreign teachers can be hard to get. Consumer loans for English -- widely available in other countries -- aren't allowed in China. Competition is rampant, with cut-rate copycats quickly emulating any new idea. "There's a lot of cowboys out there," says Mr. Rietveld of English First.
Wall Street English has had its struggles in China, acknowledges its founder, Luigi Tiziano Peccenini. Although he sold the business he founded several years earlier to a U.S. education company, Mr. Peccenini retained rights to the Chinese franchise (Wall Street Institute is run as a franchise in most of the countries it operates.) But he had delegated hands-on management to someone else, who wanted to slash the premium prices it demands in other markets.
"They didn't understand that China...would emerge to what it is today," he recalls. "China may be a third-world country in [some parts], but not in Beijing or Shanghai."
Back on Track
The Italian native took the cue to plunge back into the business, successfully opening the first branch in May 2000. Its immediate success created another problem: a lack of space. Education officials waited for months before approving a second location.
With new licenses in hand, Wall Street English began expanding too quickly, taking on more students than it could comfortably handle. By early 2003, things had settled to a steadier pace, and the company had expanded to eight locations. Then SARS struck. Widespread fear and government bans on congregating kept students from coming to class. "We lost a fortune," Mr. Peccenini says. "That was a disaster."
More was in store. As the outbreak of severe acute respiratory syndrome faded, Wall Street English was hit by competition from a spate of imitators. The company's advertisements were copied almost exactly, down to the font, recalls David Kedwards, its chief executive in China.
It took Wall Street English until early last year to get business back on track. Executives say the tribulations have been helpful. "We've been through a lot of learning," Mr. Kedwards says.
One lesson they have learned: how to avoid red tape. With the advice of a former Chinese Ministry of Education official, Wall Street English is finalizing what Mr. Kedwards calls a "fairly cutting-edge" legal structure that will reclassify it as a training company and thus remove it from the purview of education regulators.
Wall Street English is embarking on another major expansion. It already has expanded into one new city in the south -- Guangzhou, near Hong Kong -- and expects to open in nearby Shenzhen in November. Next year, it plans to open as many as 10 schools.
Other companies have moved more aggressively. English First, which uses a franchise model outside of Beijing and Shanghai, has opened more than 70 schools; it is present in all but three of China's 31 provinces and territories.
After English First opened a school in a remote oil town called Kelamayi in western China's Xinjiang territory, one of its students there did well enough to land a job far away in Shanghai. Word of that generated new sign-ups back home. "We're the talk of the town in Kelamayi," Mr. Rietveld boasts.
英语，中国人为之疯狂
在中国，作为全球通用商业语言的英语本身正在成为一项巨大的产业，越来越多的中国中产阶级为提高自己了解、掌握国际动向的能力不惜投入大量时间和金钱学习英语。
英语教学机构华尔街学院(Wall Street Institute, 简称WSI)在一座新城市开设分校的时候，通常它招收到1,000名学生至少需要一年时间。但它在北京的第一所学校在2000年3月成立后，仅仅几个月就突破了这个数字。5年后的今天，WSI在中国三大城市已经有了14家分校，并正计划开设更多分校。今年2月，美国股权投资公司凯雷集团(Carlyle Group)买下了这家总部位于巴尔的摩的公司。参与此项交易的凯雷集团管理人士布鲁克?柯本(Brooke Coburn)说，决定买下该公司在很大程度上是看好它在中国的“巨大”发展潜力。
中国的英语教育市场方兴未艾，这是伴随中国人消费能力和知识需求的提高而产生诸多发展机遇的又一实例。有越来越多的中国人将外语视为改善个人未来前途的重要工具，他们有兴趣也有实力在外语学习上加大投入，这一市场的巨大潜力吸引国内外投资者纷至沓来。据业内人士估计，全中国目前大约有30,000所英语培训学校。虽然日益激烈的市场竞争使它们的盈利很难得到保证，但这一市场的发展势头还是给一些学校带来了可观的利润。
英语教学的市场需求来自社会的各个层面。在中国，一向重视子女教育的父母们在他们的英语教育上非常舍得投入。在职人员则将学习英语作为到外资企业找到好工作的必要条件，与此同时，对海外市场越来越重视的中国公司也鼓励员工学习英语。曾在微软公司研究部门工作、现在戴尔国际英语学校(Dell English International)任职的Terence Peng说，对某些人来说，学英语甚至已成为一种社会身份和地位的象征。
据中国最大的连锁英语教育机构新东方教育科技集团(New Oriental Education & Technology Group)董事长俞敏洪透露，今年集团的业务收入有望接近9,000万美元，以此集团将实现可观的利润。在中国提供“华尔街英语”课程、学员数已达13,000人的WSI则表示，预计今年的收入可达2,700万美元，较2004年的2,100万美元增长13%。该公司预计，经过在中国大陆数年的投资和经营，今年有望首次实现盈利。该公司首席执行长蒂姆?丹尼尔斯(Tim Daniels)预计，中国将在3年内成为其最大的市场。
25岁的北京某报社记者Dorothy Zhen最近花22,000块钱（约合2,720美元）报名参加了WSI的一个18个月的英语课程。她希望将来到外资企业工作。“找工作时，如果能说、写流利的英语能增强我的优势”，她说。
中国政府也支持国人学习英语。北京和上海两地分别将在2008年和2010年举办奥运会和世界博览会，两地政府希望届时自己城市的国际化色彩能给远道而来的外国人留下深刻印象。为此，两个城市都开展了“人人学外语”活动。比如，出租汽车公司就给司机们配备了英语学习磁带，让他们在开车间隙学点英语。
英语学习在其他亚洲国家长期以来一直很受重视，而业内人士说，中国最近几年这股英语热的升温速度和力度尤其突出。创立于1965年的瑞典教育机构EF Education 2000年在中国开设了第一家英语学校，目前，中国已成为其最大的英语教学市场。该机构负责中国业务的奥拉夫?里夫特(Olaf Rietveld)说，中国的英语学习比印尼和泰国等国家的热度更高。他说，英语教学在中国是一项非常严肃的事。
EF Education开设有成人英语教育和面向企业的英语培训，但它同时也有针对年轻人乃至低龄儿童的课程。在其他英语教育市场上，孩子们通常在7岁以后才开始学习英文，而该机构为满足中国父母的要求甚至还有为4岁儿童开设的课程。公司表示，开设此类课程也是希望这些孩子长大后还会回来做进一步的学习。里夫特说，希望他们到18、19岁的时候还有可能再次走进EF的教室。
伴随英语热而产生的机会并不局限在教室里。孙震就凭藉他自己学习语言的天赋拓展出一个不断成长的多媒体帝国。9年前，当他还在北京一家电视台工作的时候，他基本上一句英文也不会说，但一个偶然的机会台里安排他制作一个每天5分钟的英语口语节目。于是孙震开始学习英语口语，而且他学得很快。一、两年后，他自己已能主持教学节目了。1998年，孙震创办了自己的公司。
现在，孙震的公司在“洋话连篇”(Modern English)的品牌下推出了一系列产品，包括培训、图书和教学光盘。去年，孙震与Fairfield Language Technologies达成协议，运用该公司的Rosetta Stone软件提供网上培训服务。现在他们在全国60家电视台播出英语教学节目，覆盖面达全国300个城市。此外，他们还提供儿童英语节目。因主持“洋话连篇”节目而出名的孙震目前仍在主持这个节目。
“大家都记住我就是那个说英语的胖子了，”长著一付宽下巴的孙震笑著说，他流利的英语还带有一点美国味。他的最新一个举动是推出了一档模仿美国电视唱歌比赛“美国偶像”(American Idol)的节目，不过比赛的内容是讲英语而不是唱歌。
中国开展英语教学已有几十年的历史，但长期以来，这项工作主要限于政府教育系统的范围，直到九十年代末情况才有所变化。从某种意义上说，这种变化要归功于俞敏洪的新东方学校。俞敏洪在北京大学读书期间学习英文专业。毕业后，为申请到一所美国大学的奖学金他努力了好几年，但一直没有成功。
当俞敏洪再也无力支付申请美国大学奖学金的相关费用时，他决定开始教英语，并将其作为一项全职工作。很快他就意识到，如果抛弃他念大学期间所接受的那种呆板、乏味的教学模式，他将找到一条新的生路。
于是俞敏洪开始在教英文上投入相当的精力。1993年，在花了6个月时间获得有关单位的批准之后，他开办了自己的第一所学校。今年43岁的俞敏洪回忆说，第一批学生只有30人左右，但学校的名声很快传播开来。
俞敏洪说，学生们发现，大家用同样的教材，但新东方的课堂非常好玩，大家学得很愉快。两颊上总是带著笑容的俞敏洪看上去很和善。1995年年底前，新东方的学生人数已经达到20,000人。那年，俞敏洪第一次到了美国，他聘请到几位以前的大学同学回国任教。2000年，华尔街英语开始在北京出现时，俞敏洪随即开始到北京之外的城市拓展业务。
如今新东方已然成为中国最大的英语学校，在全国20个城市设有分校，拥有学生80万人。据俞敏洪称，新东方今年收入有望增长20%，达到人民币7亿元，公司净利润率为12%左右。他已经开始考虑公开上市，上市地可能选在那斯达克市场。
眼下，俞敏洪将扩展二线城市的市场作为主要发展目标，力争在这些不知名的城市中拔得头筹。英语学校在很多二、三线小城市已经遍地开花，但它们大多在管理上仍有缺陷，在俞敏洪的广泛知名度面前只能甘拜下风。俞敏洪计划未来三至五年内将新东方渗透到人口超过50万的所有城市，他估计这样的城市大约有100个。在这方面，俞敏洪始终以一家美国公司为榜样，他说，“我们要在英语教学行业中成为中国的沃尔玛(Wal-Mart)。”
中国英语教学行业的教学风格五花八门。8月份一个天气炎热的下午，在北京海淀区的新东方英语初级班上，近200名学生簇拥在长长的教室里，一位剃著平头留著小胡子的30岁左右老师正在向他们讲授基础语法课程，其间还不时穿插著他对中西方文化差异的见解。坐在后排的学生大多通过从顶棚悬下来的闭路电视听课。讲课中80%使用中文。
而在北京的另一端，华尔街英语的北京主校区，学生们则坐在语音教室里，每个人面前都摆著戴尔电脑。华尔街英语主要通过专有软件教学，学生们可以通过麦克风发音，由国际商业机器公司(IBM)提供的语音识别程序进行监控。这是一种完全由外教授课的纯英文环境小班课程，在其中的一个课堂，4名学生练习如何表述买卖二手电视，他们的英籍教师在一旁指点。整个教学完全用英语进行。
中国英语教学的大环境可以说是荆棘密布。教育仍然属于敏感行业，政府监管非常严密。学校通常很难找到有经营头脑的经理人。外商投资者必须与本土合作伙伴共同运营，学校获得经营执照和外籍教师获取教师资格都不是很容易。其他国家广泛推行的英语学习贷款在中国基本上还是空白。竞争无度，一个好点子会很快被他人拿来效仿。“这里有很多缺乏责任感的人，”English First的里夫特说。
华尔街英语在中国就遇到了很多困难，其创始人李文昊(Luigi Tiziano Peccenini)如是说。尽管他已经将几年前创办的这项业务出售给了一家美国教育公司，但仍拥有在中国开展这项业务的特许权（华尔街英语在大多数国家以特许权方式运营）。他曾经将日常管理交给了另外一些人，而这些人一直希望能在其他市场上降低收费。
“他们根本没想到中国会发展成为现在的样子，”他回忆说。“从某种角度讲中国可能属于第三世界国家，但北京和上海绝不是。”
这位意大利人后来重新投入到了中国业务中，并于2000年在中国成功开办了第一家华尔街英语的分校。但突如其来的成功又带来了新的问题：教学场所不够用。而教育部门的官员批准成立一家分校要花上几个月的时间。
拿到新的许可证后，华尔街英语开始迅速扩张，学生增长量甚至超过了学校的负荷。到2003年初，局面逐渐稳定下来，华尔街英语扩展到8家分校。但不久非典型肺炎(SARS)爆发。整个社会的恐慌情绪加上政府明令禁止人群聚集导致上课的学生寥寥无几。“我们损失了大笔财富，那简直是灾难，”李文昊说。
更糟糕的还在后面。随著SARS疫情逐渐平息，华尔街英语遭到一系列仿效者的恶意竞争。它的广告几乎被原样照搬，其中国首席执行长柯大卫(David Kedwards)回忆说。
直到去年年初华尔街英语才重新走上正轨。公司管理人士表示，经历一些磨难对公司是有好处的。“我们从中总结了很多经验，”柯大卫说。
其中一条经验是：如何规避政府的繁文缛节。经一位中国教育部前官员指点，华尔街英语最终将自身确切定位为一家培训公司，这样它就可以不受教育管理部门的监管了。
如今华尔街英语正在发起新一轮扩张攻势。它已经将触角伸向了中国南方的一座城市──毗邻香港的广州市，并准备于11月份在广州附近的深圳开设分校。明年，华尔街英语计划开设多达10家分校。
其他公司也不甘示弱。English First在北京和上海之外采用授予特许经营权的模式运营，目前已经开办70多家分校；在中国31个省市自治区中，只有三个省份尚无English First的足迹。
English First在边远的新疆克拉玛依市开办分校后，那里一个成绩优异的学生还在上海找到了工作。“我们在克拉玛依已经家喻户晓，”里夫特骄傲地说。
