[Report] 'Muk-twi Warning' Amid Academy District Bankruptcies... Shadows of COVID-19 and Low Birthrate

Closure of Medium to Large Franchise Ballet and Swimming Academies Continues
Closed Doors Display "Hit by Epidemic" Apology Notes
Local Authorities and Public Security Bureau Busy Seeking Solutions
Declining Birthrate Causes Sharp Drop in Students, Fire Prevention Regulations Also Hinder

"I heard it was a nationwide franchise academy with branches in Shanghai and Qingdao, so I didn't suspect anything. Because the discount rate was high, I recently purchased additional prepaid class vouchers worth tens of thousands of yuan, but..."

On the 27th, Mr. Xunmo, a Chinese national met in front of a large shopping mall in the Wangjing area of Chaoyang District, Beijing, could not hide his bewilderment over the suddenly disappeared academy. He rarely spared expenses for his 7-year-old daughter's tuition, but now he was furious that both the classes and tuition fees had vanished in an instant.

On the third floor of a large shopping mall located in Wangjing, Chaoyang District, Beijing. In front of the closed ballet academy's door, a closure notice, an apology letter from the business owner, and a notice about the resumption of classes at some branches are posted side by side.
Photo by Kim Hyunjung

An educational facility for children located right next to the ballet academy. This place also has a notice stating "Already closed." (Photo by Kim Hyunjung)

The 'Baekjo-ui Hosu' (Swan Lake) academy, where Mr. Xun registered his child’s classes, is a professional ballet academy with 16 branches in Beijing alone. It abruptly closed all branches last month, with estimated damages exceeding 30 million yuan (approximately 5.5 billion KRW). The problem is that such cases are gradually spreading like dominoes. During the three years of zero-COVID, classes were not properly conducted, and private education business owners, burdened with debt, tried to expand recklessly. At the same time, the demand for enrollment sharply declined due to the low birthrate effect.

Until yesterday, they induced additional payments then absconded
The business owner who disappeared apologized citing "COVID impact"
The government intervened to attempt early resolution

The situation of the ballet academy first became known to the public in mid-last month. It seemed to close for a few days, then the facilities were completely dismantled, and the lights never turned on again. A few days later, an 'apology letter' from the founder citing COVID-19 as the cause of business deterioration was posted on the doors of each branch. Liu Tiejun, the CEO and franchise founder, wrote in the letter, "Since the epidemic began in 2020 until now, we have been hit hard, but the rent was not significantly reduced." He added, "Although we took measures such as layoffs, consumption sharply declined after the epidemic, increasing operating costs and making it difficult to continue operations."

As the situation escalated, Beijing’s cultural tourism and public security authorities intervened, and it is known that the Wangjing and Pudong branches have found new operators and resumed operations. At these locations, external students can attend classes equivalent to the tuition paid at nearby branches, but seats are limited and refunds are not possible.

The large swimming academy 'Longgeqinzi' in the Tianjin Aocheng commercial district is firmly closed. The academy's director disappeared after closing the business without refunding the tuition fees.
Photo by Kim Hyunjung

The large swimming academy 'Longgeqinzi' in the Tianjin Aocheng commercial district is firmly closed. The academy's representative disappeared after closing the business without refunding the tuition fees. (Photo by Kim Hyunjung)

Similar incidents are occurring frequently in Tianjin, one of China’s four direct-controlled municipalities, where about 10,000 Korean residents live. In the Ao Cheng commercial district, a hub for academies, large academies have repeatedly absconded without refunding tuition fees, causing 'eat-and-run' incidents. Two branches of the swimming club 'Longgeqinzi' closed consecutively from the end of last month to early this month, and the representative has been unreachable. On the 27th, the entrance to Longgeqinzi was firmly closed, with a notice about a messenger chat room created by parents for legal action. Local authorities are also investigating the situation.

A Korean resident running a business in Tianjin said, "Most members suffered losses of 10,000 to 30,000 yuan each, with a total estimated loss of about 9 million yuan." He added, "A large store suddenly closed at the end of last month, but the academy representative was still encouraging top-ups a week before fleeing." Top-up (chongzhi) is a commonly used prepaid membership culture in China, where the more you deposit in advance, the higher the discount rate or additional service value you receive. The resident explained, "The franchise contract had already ended at the end of August, so there is no way to recover the losses. The staff were just on leave, and some did not even receive their wages."

Another Korean resident said, "When I tried to purchase an additional membership for my child’s balance bike academy, the counter staff hinted, 'It seems we will close soon. Conscience-wise, I can’t accept more money,' so I realized there was a problem." He added, "Besides that, language institutes with many Korean students suddenly closed and even removed all desks, showing a chain of such incidents."

Another language institute within the Tianjin Ao Cheng commercial district. The door is firmly closed. (Photo by Kim Hyun-jung)

Enrollment sharply declines due to overlapping low birthrate
Fire prevention regulations become stricter, worsening business difficulties

Some analysts diagnose that the recovery of the face-to-face private education market, hit by COVID-19 prevention guidelines, has been delayed due to sluggish consumption, compounded by chronic low birthrate and recently strengthened fire prevention regulations, worsening business difficulties.

According to China’s National Bureau of Statistics, the number of newborns last year was 9.56 million, falling below 10 million annually for the first time in 73 years since 1949. Until 2016, the number was as high as 18.83 million but has since declined by about 1.5 million annually, dropping to half the previous level. Last year, the number of first marriages in China was 10,517,600, the lowest in 37 years since records began in 1985.

There are even cases where formal educational facilities are closing one after another. According to local media, the principal of a famous kindergarten in Bozhou, Hefei City, fled after collecting tens of thousands of yuan in advance from parents, and authorities are investigating. In Linquan County, Anhui Province, the most populous among China’s 1,600 counties with 2.29 million people, 50 private kindergartens, accounting for 11.8% of the local total, reportedly closed within this year.

Opening educational facilities in relatively high-rent locations due to safety regulations is also cited as a negative factor. According to China’s national building fire prevention regulations, since August, authorities in some regions including Beijing and Tianjin have regulated that academies and educational institutions cannot operate above the third floor or in basements due to safety concerns in case of fire or other emergencies.

Beijing and Tianjin = Correspondent Kim Hyun-jung

This content was produced with the assistance of AI translation services.