China’s sweeping reforms on private education companies has precipitated a stock freefall for the country’s largest after-school tutoring firm. Shares of New Oriental Education, dual-listed in New York and Hong Kong, have plunged approximately 70% since Thursday.
On Saturday, China’s State Council announced a broad-based overhaul of the private education sector, citing the need to “protect students’ right to rest, improve the quality of school education and reduce the burden on parents.” The directive stipulated that education firms teaching core curriculum subjects such as math, science and history for kindergarten through 9th grade will be barred from making profit and must be turned into non-profit entities. Such companies are also banned from going public, raising capital, and offering tutoring services during weekends and holidays.
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