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HONG KONG, July 26 (Reuters) – Chinese group TAL Education Group said on Sunday that its operations and business prospects could suffer due to Beijing’s ban on for-profit education in basic school subjects in order to alleviate financial pressures on families.
News of the rule changes on Friday sent shock waves through China’s $ 120 billion private tutoring industry and sparked a sell-off in shares of companies such as TAL and Gaotu Techedu. New York-listed shares of TAL plunged 71%.
Under the new rules, all institutions offering tutoring on the school curriculum will be registered as non-profit organizations and no new licenses will be granted, according to an official document.
TAL said in its statement on Sunday that it expects the new rules to have “a significant negative impact on its after-school tutoring services … which in turn could negatively affect” its operations and outlook. . He did not specify.
China’s for-profit education sector has come under scrutiny as part of Beijing’s efforts to ease the strain on schoolchildren and reduce the financial burden on parents that has contributed to a drop in school fees. birth-rate.
In May, China announced it would allow couples to have up to three children, up from two previously. (Reporting by Sumeet Chatterjee; editing by Susan Fenton)
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