The Chinese authorities deal a severe blow to a service sector worth billions of dollars

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The Chinese authorities deal a severe blow to a service sector worth billions of dollars

AFP

Forbes magazine reported that the Chinese authorities caused the collapse of a multi-billion dollar online education business.

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The magazine pointed out that this was after a ban imposed on the largest companies that created an “empire” for private lessons in the country over several years.

It was reported that Chinese regulators decided to eliminate online education services in China, causing these institutions to lose about $27 billion in a few months.

The three national companies most affected were “Gaotu”, “TAL Education” and “New Oriental Education & Technology”, as the first lost 90% of its value due to government sanctions, and since early 2021, the capital of Larry Xiang Dong Chen, owner of the company, has declined. Gaotu from $16.5 billion to $1.6 billion.

The second company specialized in teaching services for primary and secondary students lost more than 60 percent of its value during the same period, while its owner lost $2.1 billion due to the measures taken by the Chinese authorities.

It was pointed out that the measures of the ruling party in China came in the wake of calls by Chinese President, Xi Jinping, to reduce the additional burden on schoolchildren.

Analysts at a research company stress that the Chinese government is fighting fraud and abuse of pricing policy by Internet companies, by restricting private lessons.

In this regard, fines were imposed on the three giant companies in April for cheating in the prices of online courses, worth $76.9 thousand.

In early June, 15 tutoring companies, including Alibaba-backed Zuoyebang, were fined a total of $5.73 million.

Source: lenta.ru





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