Foreign agents locked out

Foreign-owned agencies providing services for Chinese students hoping to study at universities overseas may soon be locked out of the Chinese market entirely as part of a government plan which will also strengthen supervision over domestic operators.

Chinese businesses have welcomed the move, though critics have claimed that it unfairly protects locally-based businesses.

The draft regulation, issued by the Ministry of Education on October 29, will allow provincial-level authorities to approve or reject licenses for domestically owned companies, while also requiring that they set aside an emergency 500,000 yuan fund ($80,100). They will also be subject to fines of up to 100,000 yuan if their fraud prevents customers from attending universities overseas.

However, it will also ban foreign intermediaries from entering the market entirely. It states that foreign agencies and their representative offices in China, foreign-invested enterprises and schools cooperatively run by Chinese and foreign parties, as well as individual foreigners, are not allowed to engage in any form of intermediary services in China.

Hu Benwei, executive director with a Beijing-based consulting center on intermediary agencies, said foreign-owned agencies had been increasing in number and "If students are cheated by them, it is difficult for the authorities to track down who should be held responsible." However, some Chinese operators disagreed, noting that foreign agencies also provide assistance to locally owned agents.

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