China Said to Mull Turning Tutoring Firms Into Non-Profits
Comment of the Day

July 23 2021

Commentary by Eoin Treacy

China Said to Mull Turning Tutoring Firms Into Non-Profits

This article from Bloomberg may be of interest to subscribers. Here is a section:

China is considering asking companies that offer tutoring on the school curriculum to go non-profit,
according to people familiar with the matter, as part of a sweeping set of constraints that could decimate the country’s $100 billion education tech industry. Shares sank.

In rules currently being mulled, the platforms will likely no longer be allowed to raise capital or go public, the people said, asking to not be identified because the information is not public. Listed firms will also probably no longer be allowed to invest in or acquire education firms teaching school subjects while foreign capital will also be barred from the sector, one of the people said.

Eoin Treacy's view

Capitalism with Chinese characteristics is rapidly morphing into a “heads I win, tails you lose” mentality. If a company is successful, they had better have strong central government sponsorship or they are likely to fall foul of heavy-handed regulation.

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