Kendra Schaefer 凯娜

Recap: Recently, China issued "Opinions on Further Reducing the Burden of Students' Homework and Off-campus Training in Compulsory Education" - a policy which effectively kneecaps the off-campus tutoring industry. 2/12

Regulators are well aware of the results: "As of the close of the market on July 27, a number of U.S.-listed Chinese concept stocks have fallen by more than 90%, and 11 companies have fallen by about 80%, with education stocks accounting for the vast majority." 3/12

But are fine with it: "The policy has done more than just impact stock prices in the off-campus training industry, it has also conveyed that the purpose is "de-industrialization" of the education industry. The industry will likely face a new situation going fwd." 4/12

Here's the reasoning: "In recent years, [platforms have] chased money, trafficked in [parental] anxiety, and advertised excessively, disrupting the normal order of on-campus schools. They have become another education system outside the national education system." 5/12

In other words, the thinking is that parents are under too much pressure to send kids to tutoring just to keep up with basic course load: "Many parents are trapped ... thinking that if they don't send their kids to off-campus classes, they will lag behind other students." 6/12

"There is a craze for off-campus tutoring in China, which is a manifestation of 'group education anxiety.' To control the craze, it is necessary to eliminate parents’ educational anxiety." 7/12

This is part of a bigger problem: School have been criticized over the past few years for not doing their jobs, and shunting the burden of teaching off onto off-campus institutions and parents themselves - including asking parents to correct homework and oversee lessons. 8/12

The macro picture: China's population is aging rapidly. When China announced it wanted people to have more kids, society responded: "How are we supposed to have do that when the burden of educating children is so high?" This is part of a mitigation effort. 9/12