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China Plans To Crackdown On Private Tutoring Companies: Reuters

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  • China is planning a tough crackdown on the country's $120 billion private tutoring industry, Reuters reported.

  • Sources told Reuters that the new rules would include trial bans on vacation tutoring and restrictions on advertising.

  • The trial vacation ban, along with a bar of online and offline tutoring on weekends during term time, could severely affect tutoring companies' revenues to the tune of 70-80%.

  • Gaotu Techedu Inc (NYSE: GOTU), New Oriental Education & Tech Grp (NYSE: EDU), TAL Education Group (NYSE: TAL), LAIX Inc (NYSE: LAIX), and Bright Scholar Education Holdings Ltd (NYSE: BEDU) are some of the companies that are expected to be affected.

  • President Xi Jinping last week said schools should be responsible for student's learning rather than tutoring companies.

  • Apart from protecting students from the cutthroat competition, the new rules are expected to act as a financial incentive for couples to have more children as it seeks to shore up a rapidly declining birth rate.

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