Chinese private educational society New visa oriental logo in Shanghai.
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BEIJING – Two Chinese stocks listed in the United States collapse more 40% in pre-market trading Friday after the reports of a government repression on the sector it included bans on foreign investment.
TAL Education shares fell by 51% in extended, soon-hours trading. New oriental education and technology shares it fell by about 47%.
Reports come when Chinese authorities intervened up restrictions in recent months on the private education industry and major controllos on list of domestic domestic companies overseas in the United States
Caixin, a great Chinese financial news place, reported Friday that new Chinese government restrictions on the education sector was starting to be implemented in Beijing and other cities nationwide.
Copies of the policy the document was circulating online Friday afternoon.
Educational training institutes are forbidden to breed money through stock quotes, while foreign capital cannot invest, according to one copy of the Chinese-language document seen and translated by CNBC. It was dated July 19 as issued by the senior executive body – the State Council – and the Central Committee of the Chinese Communist Party.
CNBC did not check in the document independently.
One of the bans on foreign investments included variable interest entities, a common structure with which Chinese companies use for list in the United States
New Oriental Oriental Education declined for comment CNBC and TAL did not immediately respond to a CNBC request for comment.
The pre-market the collapse of the shares followed a sharp decline for didactic titles exchanged in Hong Kong which began in drop in the afternoon.
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