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DaFranker comments on Teaching English in Shanghai - Less Wrong Discussion
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Probably. I'm not sure how large a market it is, though.
The obvious problem is that of finding teachers, or for teachers to find students. A large public website might attract too much government attention. Word-of-mouth friend-knows-someone methods alone sound like each case would be isolated, and so we probably wouldn't hear about it.
Host it off-shore. Hell, you can even live in another country while teaching Chinese people English. I've heard of people who do that, though it's harder to make a living that way than teaching in person.