The hastily arranged call, which included attendees from several major international banks, was led by China Securities Regulatory Commission Vice Chairman Fang Xinghai, people familiar with the matter said, asking not to be named discussing private information. Some bankers left with the message that the education policies were targeted and not intended to hurt companies in other industries, the people said.
It’s the latest sign that Chinese authorities have become uncomfortable with a selloff that sent the nation’s key stock indexes to the brink of a bear market on Wednesday morning. State-run media have published a series of articles suggesting the rout is overdone, while some analysts have speculated government-linked funds have begun intervening to prop up the market.
The actions taken against the tutoring sector might be well intentioned but to say it is an isolated incident is a step too far. The war on the private sector has been waged for more than a year already. The message is clear. There is now a clear limit on how large companies can grow. We might argue about the merits of this move from a societal perspective, but it makes a nonsense of growth-based valuations. That’s something all investors have to come to terms with.Click HERE to subscribe to Fuller Treacy Money Back to top