Purpose: The purpose of this study is to identify the factors and issues within the policy context of education and the school inspection system which might affect education quality in China and examine stakeholder perceptions of inspection content and context in one city region in China. Design/methodology/approach: A mixed-methods design was used. In all, 365 teachers, headteachers and administrative staff from ten schools across the urban and rural area have responded the questionnaires. A total of 13 interviewees including teachers and headteachers from two urban schools and a rural school, city and national inspectors and an educational officer were conducted. The interview instrument was informed by both international and local literature and some of the quantitative findings. Findings: This paper argues that student non-academic outcomes were perceived by participants to be more important than academic achievements in demonstrating education quality. The prevailing exam-oriented evaluation system still sets barriers for student all-round development. Educational equity in student performance has not drawn sufficient attention from the inspectorates of Shandong province. Practical implications: School inspection standards remain to be improved to better support student all-round development and equity in educational outcomes within and between schools, and better accommodate policy contexts and local needs. Originality/value: This study examines the school effectiveness factors which have been rarely tested in Chinese context and collects new empirical evidence to explore participants' perceptions on the quality of school inspection criteria and education quality in Shandong province.