Status: 07/26/2021 2:40 p.m.
The week started with heavy losses on the stock exchanges in China. The reason for this is a reform of the government, according to which tutoring institutions are no longer allowed to earn money. That hits a billion dollar industry.
Tutoring institutes are no longer allowed to earn money in China. This reform of the education system, announced by the government in Beijing at the weekend, brought the stock exchanges in China heavy losses at the start of the week. The Hangseng in Hong Kong fell by four percent – the leading index had not plunged as much in 14 months. Similar tendencies in Shanghai and Shenzhen, if not quite as extreme.
The new Beijing rules affect an industry valued at $ 100 billion. Educational institutions for schoolchildren are no longer allowed to go public. They are not allowed to offer tutoring for the weekend and no academic courses at all for children under the age of six.
Schoolchildren have almost no free time
Companies like “New Oriental Education” in Hong Kong posted a loss of more than 40 percent in value. On the mainland, some tutoring institutes went up to the highest possible loss limit of ten percent.
The background to this is the pressure to perform, which has been increasing for years, which leaves students with almost no free time even on the weekends. Chinese parents have to spend up to half of their income on additional tuition in order to compete for coveted university places. And not just in core subjects. There are even classes in robotics, moderation, golf, calligraphy or oil painting.
Additional courses cost up to 30,000 euros annually. Analysts expect further rules for the education market because Beijing wants to stop the aging of society with its new three-child policy.