In the last two decades, China's education has experienced significant transformations and restructuring on account of privatization and marketization. Unlike the Mao era when the state assumed the major responsibilities in financing and providing education, individuals and families have now to bear increasing financial burdens in paying for education. The marketization and privatization of education has undoubtedly intensified educational inequalities and widened regional disparities between the economically developed areas in the eastern coast and the less economically developed areas in the middle and north-western parts of the country. The growing inequalities in education and the increasing financial burdens presented by education have been a source of social discontentment, which have in turn prompted the central government to revisit its approaches to educational development. This article sets out to examine, how in this wider policy context, China's education has been transformed following the adoption of more pro-competition and market-oriented reform measures. This article is based on intensive secondary data analysis, fieldwork observations, and findings from a household survey conducted in eight different Chinese cities about people's perceived education hardship. The article concludes by considering how the Chinese government has attempted to address the problems of educational inequalities that have intensified on account of two decades of education marketization. (Contains 1 figure and 7 tables.)