Privatization news: China delivers a blow to it's own ed profiteers

I doubt it. 

U.S. companies have raked in billions of dollars in super-profits, especially during the pandemic, from a burgeoning, privatized global ed-tech and remote-learning sector. Now they are turning apprehensive eyes towards China. 

This week China announced a sweeping overhaul of its $100 billion education tech sector, barring companies that teach the school curriculum from making profits, raising capital, or going public. Companies and institutions that teach the school curriculum must now go non-profit. 

Bloomberg reports:

The new regulations threaten to obliterate the outsized growth that made stock market darlings of TAL Education Group, New Oriental Education & Technology Group and Gaotu Techedu Inc. They could also put the market largely out of reach of global investors. Education technology had emerged as one of the hottest investment plays in China in recent years, attracting billions from the likes of Tiger Global Management, Temasek Holdings Pte, and SoftBank Group Corp.

Like the proverbial butterfly effect, China's latest anti-privatization moves have sent tremors down Wall Street with losses in Chinese tech and education stocks now exceeding $1 trillion since February. 

The new policies stem from a deeper backlash against the industry. Chinese educators say that excessive tutoring "torments youths, burdens parents with expensive fees, and exacerbates inequalities in society."  The out-of-school education industry has been “severely hijacked by capital,” according to a separate article posted on the site of the Ministry of Education. 

They say the new regulations are focused on compulsory subjects, meaning critical material like math, science, and history. Classes for art or music mostly would not fall under the new restrictions.

What impact all this will have on China's heavy reliance on standardized testing is unclear. 

Also unclear is what impact this will have on current U.S. ed policies which are increasingly tilted towards the privatization of public education, school vouchers, privately-run charters, remote learning, and standardization.