It is possible to set up a business to offer private English teaching lessons. I like to refer to it as tutoring services. Do you mean private 1 on 1 teaching lessons? You will be amazed at the amount of people that need extra help and they seek private English teaching lessons where the teacher can focus on them and not others in the class. The students get more out of the lesson that way because they can ask more questions and get more of the answers they are looking for. Sure it is!

I ran across some good articles on this subject.  You can read them here:  http://middlekingdomlife.com/guide/opening-your-own-school-part-one.htm

Hope that helps a little.

Dont set up an official business you have to register to much hassle and BS do what I do advertise wherever and you will soon get students , keep your price reasonable not a problem , most of course  weekends when the kids arnt at school ,evenings is usually more mature students who want to improve ,some even start learning..good luck

you say to keep price reasonable,what is the going rate?

I looked in to finding a lesson teacher and she was asking 150.00 yuan per hour.

Im sure setting up a business is alotof BS, but if you are doing it as others suggest here, just advertise and pickup students, I assume that you are then working on a tourist visa. Not a great idea. I can understand the thought to setup alone, as i have encouraged a friend here to do, but he is quite right to tick with his english school company, as they have alot off pull to sort his visa. Then he doesnt have to worry about deportation and chopping visa every month...

Personally I think it would be ok to do a little on a tourist visa to setup a student base but then once you have a suitable enough amount of students to think it is worthwhile venture, setup things officially.