The Standing Committee of the Ninth National People's Congress (NPC) made the decision at its 30th meeting, during which three draft laws were passed.

The NPC Law Committee submitted a report to the meeting in which it stated that legislators held "different views" on certain key issues for the draft law on non-public education and thus it required "further study".

"Such a case is rare in the history of law-making in China despite few precedents," an official with the NPC Standing Committee said.

A draft law usually has to go through three rounds of deliberation during the NPC Standing Committee meeting before it is put to vote to become a law.

Private education in China has burgeoned with the approval of Chinese education authorities as China's public education resources have struggled to meet the soaring demand since the 1990s.

All sides believed that it was an urgent task to enact a law so as to grant legal status to non-public education.

The draft law, however, aroused hot debate from the first round of deliberation to the third, with the focus on the profitability of private schools, ownership of non-public school assets, and equality between public and non-public schools.

In a draft after the first round of review, it said that "owners can gain appropriate economic return after deducting costs and paying fares in accordance with relevant state regulations".

After two rounds of revision, the text was changed to "investors can be granted appropriate compensation from fund arrangements in the surplus of school operations". Li Yining, a member of the NPC Standing Committee and a renowned economist, said two concepts should be differentiated. China's Education Law stipulates that educational institutions should not run for profit.

"The nature of education should be non-profitable, that is one concept. Another concept is the outcome of school operations. Surpluses obtained from school operations should not be considered as the result of profit-driven moves," he said.

He admitted that private schools may be profitable thanks to meticulous operation, but "the nature and operation outcome shouldn’t be mixed up", he added.

Chen Junliang, another legislator, suggested restoring "appropriate economic returns" in place of "appropriate compensation".

"It is acceptable to give rational economic returns for attracting private funds in education," argued one law-maker, citing that even banks should pay interests for loans.

Another major dispute was over the settlement of remaining assets if a private school declared bankruptcy.

The remaining assets, said the draft for second revision, would be used to develop non-public education under the arrangement of relevant government administrations after the liquidation of all debts.

Most law-makers considered such an article too harsh for investors.

Investors could not be rebated from the remaining assets in accordance with the shares the investors held, one law-maker said, and all remaining assets were obtained by public departments.

"Such regulations turn investors to donors, and thus dampen their enthusiasm," she said.

Official statistics show that by the year 2000, China had more than 60,000 non-state-run schools with over 10 million students.

(Xinhua News Agency October 29, 2002)