I don’t think online education can or will replace the prestige of attendance at an established university in China or abroad, but I do believe it will complement it. I had previously thought online education would allow for individuals who could not afford to study abroad to gain access to the resources provided at those foreign universities; however, I have found that Chinese students who study abroad are not evaluated on the content studied abroad but rather their experience. Also, I have found that Chinese students are motivated to study abroad for 2 main reasons, which do not include access to foreign content: (1) It is a way to avoid the College National Exam / local university pressure and (2) younger students are able to enhance and practice their English (English is a school subject in China and is a full separate section on the College National Exam). Additionally, this past October, a group of top Chinese universities partnered to launch their own MOOC and learning portal (similar to edX launched by Harvard, MIT and Berkeley). Given these reason, I don’t think the online education opportunity is in traditional/higher education.
As China transitions from its manufacturing and export-dependent economy to a services and skills-based economy, it will require a more skilled workforce to meet those market demands, suggesting the need for increased vocational education opportunities. That vocational education has been historically perceived as a low-status education compared to academic-based education (theory over practice belief), suggests that there is a strong divide between the two and students are unable to easily gain access to both. This traditional ideology naturally encourages students to pursue an academic-based education, creating a workforce that is over-educated but under-skilled. Additionally, given the competitive job market in China right now (~16% of the record ~7 million Chinese university graduates last year were unemployed), there is increased value in additional learning/training for individuals. Finally, the need for innovation is necessary for China to maintain its growth, supply jobs and become a knowledge economy, and to fuel that innovation will require access to content beyond school borders and local resources. This may be where the online education opportunity lies.
Of course, the challenge lies in Chinese government intervention and facilitation of online education. So far, there are few foreign online education companies that have been able to successfully expand into China, with the exception of Coursera as of the end of last year, in which it partnered with an internet site to launch on that site. And local companies will struggle to compete with the government/university-backed online offerings (especially if they start to offer not only academic courses but vocational/technical trainings) as they will find it difficult to compete for online enrollment of students and brand themselves as a credible learning site. I think a company that is focused on offering courses and resources and building a community around a certain subject (become the go-to online destination to learn coding or personal finance or a language), such as Codecademy, will thrive given the current Chinese learning environment.