China has banned profit-led private schools from the nine-year compulsory education system, which covers primary to junior high school years, according to a revised law.
The revised law on private education was adopted Monday at the close of the National People's Congress (NPC) Standing Committee's bi-monthly session after a third reading.
China's compulsory education is a nationwide free system, supported by funding from the central government.
The system is a public service that must be provided by the government, said Zhu Zhiwen, vice minister of education, at a press conference after the law's revision was finalized.
"Profit-led private schools are unsuitable for the free education program," Zhu said.
He stressed that private schools are still allowed to offer diversified, market-oriented paid educational services, as long as they comply with the law.
China has about 162,700 private schools nationwide with more than 45.7 million students, according to figures from the Ministry of Education.
Currently none of the registered private primary and junior high schools are for-profit, and the law will only have impact on those who want to turn their schools into profit-led establishments, added Zhu.
The revised law, which will take effect on Sept. 1, 2017, clearly defines for-profit and non-profit private schools and specifies different measures to support private education.
Non-profit private schools will enjoy equal policies as public schools in land use and taxation.
All private schools should guarantee the staff's legitimate interests in salary and welfare, and are supposed to pay social insurance contributions for their employees, according to the law.
Private schools must establish a sound internal supervision system and entrust a third-party agency to inspect their educational environment. They should also establish an information publicity system.
Any institution found to have issued fake degrees or educational certificates, will be punished.
"Communist Party of China groups in private schools should carry out Party activities according to the Party Constitution and strengthen Party building," read one of the articles in the revised law.