China is planning to open its education sector to foreign investment with the development of an “education city” where international schools and universities will be allowed to operate.

Zhang Zhen-de, director of China Education City, said that foreign-owned schools set up in this district would be allowed to admit local children. Until now, the education ministry has banned international schools in China from enrolling locals.

“China Education City will be a test area before the system opens further, ” he said.

The “city” is a joint venture between the education ministry and the China women’s development foundation. It will be built on 882 acres of land on the outskirts of Guangzhou.

Mr Zhang is now inviting foreign schools and universities to invest and development is due to begin next year.

Mr Zhang said that overseas institutions would be able to offer both local and foreign qualifications. Individual schools would need to apply to the ministry for permission to open in the district.

“Our final aim is to attract branches of famous universities to organise any universities they want,” he said.

The campus would also include kindergartens, primary and secondary schools, as well as vocational colleges and training institutions of major foreign companies. Dormitories would be provided so students could attend from all over China, even at kindergarten level.

“Only 2 per cent of young people in China can go to universities and colleges. There is a huge market for us to organise more tertiary education,” said Mr Zhang. The city would be non-profit making, he said, but would make money from subsidiary services.

The education city wants to tap the growing demand for private education, catering for China’s new rich. Thousands of elite private schools now operate in the communist country.