07-26-2021, 07:46 AM
** 26-Jul-2021 World View: China clamps down on education stocks
China and Hong Kong stock markets fell sharply on Monday. In Hong
Kong, the selloff was led by education stocks (Scholar Education Group
and New Oriental Education & Technology Group Inc). These companies
provide tutoring and test preparation services for K-12 students in
mainland China.
That was triggered by the announcement on Friday by the Chinese
Communists that education companies (Tal Education Group, New Oriental
and GSX Techedu) are "hijacked by capital" and would no longer be
permitted to make a profit. They are required to re-register as "not
for profit," and cannot raise funds from stock markets, and can't have
foreign investors.
A local court in Xian has issued an injunction preventing the CCP from
implementing the new regulations. Hahahahahaha. There is no such
court in China, and anyone who tried would be shot dead.
So with a simple announcement, the Chinese Communists have shut down
overnight an entire $120 billion industry, with millions of employees,
because it was a "capitalist" business. Nothing like that has
happened in America since the Democrat regime shut down overnight
Parler.com, with millions of subscribers, because many subscribers
were Trump supporters.
China announced on Friday that TAL cannot profit from subjects in
standard tests such as language, math, English, chemistry, physics,
etc. But it is ok to arrange profit businesses on sports, humanist and
art, and science, etc. OK. So TAL won't be destroyed, but will be
crippled. Undoubtedly the company will try to restructure its courses
so that they all fit under the new regulations.
The reason given is so that Chinese students won't have to work so
hard by attending so many tutoring sessions. The stated logic is that
these tutoring sessions cost money that the parents have to pay, so
that parents no longer want to have more than one child, which means
that China's new three-child policy is failing, and China is facing
demographic disaster.
The paranoid reason is that TAL is listed on the NY Stock Exchange and
is being subjected to stronger auditing requirements, and the Chinese
Communists are afraid that the Americans will get their hands only all
that data about Chinese students in TAL servers.
---- Sources:
-- China, Hong Kong shares tumble on regulatory clampdowns
https://www.reuters.com/business/china-s...021-07-26/
(Reuters, 26-Jul-2021)
-- Another group of U.S.-listed China stocks plunge as Beijing
regulators crack down
https://www.cnbc.com/2021/07/23/us-liste...-down.html
(CNBC, 23-Jul-2021)
-- China's new private tutoring rules put billions of dollars at stake
https://www.reuters.com/world/china/chin...021-07-25/
(Reuters, 26-Jul-2021)
-- TAL Education: The Worst Is Here, But Chinese Kids Still Need
Places To Learn
https://seekingalpha.com/article/4441286...s-to-learn
(Seeking Alpha, 25-Jul-2021)
China and Hong Kong stock markets fell sharply on Monday. In Hong
Kong, the selloff was led by education stocks (Scholar Education Group
and New Oriental Education & Technology Group Inc). These companies
provide tutoring and test preparation services for K-12 students in
mainland China.
That was triggered by the announcement on Friday by the Chinese
Communists that education companies (Tal Education Group, New Oriental
and GSX Techedu) are "hijacked by capital" and would no longer be
permitted to make a profit. They are required to re-register as "not
for profit," and cannot raise funds from stock markets, and can't have
foreign investors.
A local court in Xian has issued an injunction preventing the CCP from
implementing the new regulations. Hahahahahaha. There is no such
court in China, and anyone who tried would be shot dead.
So with a simple announcement, the Chinese Communists have shut down
overnight an entire $120 billion industry, with millions of employees,
because it was a "capitalist" business. Nothing like that has
happened in America since the Democrat regime shut down overnight
Parler.com, with millions of subscribers, because many subscribers
were Trump supporters.
China announced on Friday that TAL cannot profit from subjects in
standard tests such as language, math, English, chemistry, physics,
etc. But it is ok to arrange profit businesses on sports, humanist and
art, and science, etc. OK. So TAL won't be destroyed, but will be
crippled. Undoubtedly the company will try to restructure its courses
so that they all fit under the new regulations.
The reason given is so that Chinese students won't have to work so
hard by attending so many tutoring sessions. The stated logic is that
these tutoring sessions cost money that the parents have to pay, so
that parents no longer want to have more than one child, which means
that China's new three-child policy is failing, and China is facing
demographic disaster.
The paranoid reason is that TAL is listed on the NY Stock Exchange and
is being subjected to stronger auditing requirements, and the Chinese
Communists are afraid that the Americans will get their hands only all
that data about Chinese students in TAL servers.
---- Sources:
-- China, Hong Kong shares tumble on regulatory clampdowns
https://www.reuters.com/business/china-s...021-07-26/
(Reuters, 26-Jul-2021)
-- Another group of U.S.-listed China stocks plunge as Beijing
regulators crack down
https://www.cnbc.com/2021/07/23/us-liste...-down.html
(CNBC, 23-Jul-2021)
-- China's new private tutoring rules put billions of dollars at stake
https://www.reuters.com/world/china/chin...021-07-25/
(Reuters, 26-Jul-2021)
-- TAL Education: The Worst Is Here, But Chinese Kids Still Need
Places To Learn
https://seekingalpha.com/article/4441286...s-to-learn
(Seeking Alpha, 25-Jul-2021)
