From classroom crackdowns to shifting cabin crews, China adapts to new realities

“Well, Chinese women are supposed to hold half of the sky, aren’t they?”

By Doug Young & Rene Vanguestaine

Two recent developments in China, one in the capital markets and the other in the airline industry, appear disconnected at first glance. Yet, together they tell a larger story of a nation grappling with the consequences of past policies and adapting to profound demographic shifts. The tentative return of private education companies to the stock market and a budget airline’s novel recruitment strategy both highlight an environment of unpredictable policy and the unavoidable pressures of a changing society.

A new Hong Kong IPO application from a vocational educator called Hiducation is noteworthy simply for its existence. The private education sector has been largely absent from capital markets since a brutal 2021 government crackdown. That campaign, aimed at easing the financial and academic burden on families to encourage higher birth rates, effectively wiped out the lucrative after-school tutoring industry by banning for-profit operations in core school subjects. The policy was intended to solve a demographic problem but created another: the collapse of these companies led to the loss of hundreds of thousands of jobs, many held by recent university graduates, which in turn contributed to soaring youth unemployment.

We believe the government has recognized this unintended consequence. Over the last year or so, without any official reversal, Beijing has quietly allowed these education companies to get going again, likely as a pragmatic move to create jobs for young people. This has led to a tentative investor return, though we think it is defined by selectivity and a short-term horizon. The policy ground can shift without warning, making long-term bets a risky proposition.

Hiducation’s focus on vocational training for the construction industry seems smart on the surface, as Beijing supports practical skills training. However, its connection to China’s sluggish property market makes its future uncertain. Even the sector leader, New Oriental, illustrates the ongoing volatility. After a strong rebound built on its study-abroad services — a business line exempt from the original crackdown — the company’s growth is now flatlining. This new headwind comes not from Beijing, but from anti-immigrant rhetoric in the U.S., which could dampen demand for American university education. It’s a stark reminder that for Chinese companies, regulatory and political risks are both domestic and international.

An airline breaks the mold

In a separate but equally telling development, budget carrier Spring Airlines is making waves by announcing it will hire “older women” as flight attendants. The company is considering women up to age 40, including those who are married and have children — a stark departure from the industry norm across Asia, where flight attendants are typically young and single. While Western travelers are accustomed to seeing flight attendants of all ages, this is a rarity in China.

Spring Airlines stated it wants more experienced people for the roles. However, we believe deeper forces are at play. First, there are simply fewer young people in China today due to decades of falling birth rates. Second, educated young women now have far more career options and are increasingly pursuing professions in fields like law, finance, and accounting that were once dominated by men. The pool of young women available for flight attendant jobs is shrinking just as domestic air travel is growing, creating a labor crunch.

The move has generated some backlash online, with one commenter bizarrely calling it “disrespectful” for highlighting that the women are older and married. This reaction underscores a contradiction in modern China, where official laws against employment discrimination often clash with widely accepted, albeit illegal, ageist hiring practices.

From our perspective, what Spring Airlines is doing is likely the beginning of a broader trend for airlines in Asia. The demographic and social changes that prompted this move in China are also present in other parts of the region, such as Japan and South Korea. Just as the industry evolved in the U.S. and Europe, we expect Asian carriers will increasingly have to adapt to a new reality where experience and professionalism take precedence over youth.

Taken together, the cautious re-emergence of education companies and the shifting hiring practices in the airline industry reveal a China in transition. Both are market-driven responses to the complex interplay of government policy, economic pressures, and powerful demographic trends that will continue to shape the nation’s future.

About China Inc

China Inc by Bamboo Works discusses the latest developments on Chinese companies listed in Hong Kong and the United States to drive informed decision-making for investors and others interested in this dynamic group of companies.

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