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How have academic tutors crashed one of the biggest financial markets in the world?
The Shanghai Stock exchange, China’s equivalent of the New York stock exchange has lost over a trillion dollars in value since the start of 2021 and everybody seems to be blaming… tutors?
Like, what the?
Well you see the Chinese government recently decided that they did not like tutoring companies operating to give rich children who could afford their services an unfair advantage in nation wide exams like the Gaokao.
The Gaokao is basically the Chinese equivalent of the SAT’s and it’s unbelievably competitive, so these tutoring companies are surprisingly big businesses. But because of the perceived inequality the Chinese government intervened and mandated that all tutoring companies must be run as not-for-profits.
It was hoped that this would open these services up to poorer children, but instead is basically just crushed the entire industry.
This heavy-handed government intervention has investors worried that the businesses they are invested in might be next so they have sold up en mass, tanking the stock market.
#Shorts
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