Home » US media: The CCP has taught Wall Street a lesson that Party control is above all else | Chinese companies listed overseas | Didi Travel |

US media: The CCP has taught Wall Street a lesson that Party control is above all else | Chinese companies listed overseas | Didi Travel |

by admin

[Epoch Times July 30, 2021](Epoch Times reporter Wang Xiang compiled a report) The Wall Street Journal published an editorial article on Tuesday (July 27) saying, “China has taught Wall Street a lesson. It is above the interests of investors.”

The article said that Chinese concept stocks plummeted this week, but it was surprising that Western investors said they were taken aback. The President of the Chinese Communist Party, Xi Jinping, planned for several years to place a larger part of China’s private economy under state control; this time, Wall Street finally noticed: he did what he said.

The article said that the most recent turning point occurred in recent days when Beijing issued new regulations to severely restrict the private education and training market (commonly known as the double reduction policy).

The new regulations require that companies in the education and training industry must be converted into non-profit companies, new listings are prohibited, and fund-raising is also prohibited. At the same time, foreigners are also prohibited from investing in the industry, foreign curriculum design, and the hiring of teachers outside China for distance teaching.

China’s middle-class parents are willing to invest in their children’s education, and the online education and training market is booming. Foreign investors also hope to get a share of the education stocks listed on the New York or Hong Kong stock market, such as: New Oriental Education Technology Group, Good Future ( TAL) Education Group, Koolearn Technology Holding Company, etc.

But now the good times are no longer.

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With the official introduction of the new regulations, the share prices of companies in the education and training industry fell in response, and related Chinese concept stocks were affected. The Nasdaq “Golden Dragon Index” (including about 100 Chinese companies registered in the United States) fell by 15% in two days, down by about 45% from February.

The article said that it seems that Western investors are gradually understanding the cause of the situation. “On the surface, the suppression of education and training is for a social policy-Beijing is worried that the cost of education makes young parents not want to have more children; in fact, this is the political control of the Communist Party. The Party wants to control what Chinese students learn. And to control who will teach the students. The party cannot tolerate foreigners writing lesson plans for Chinese students through Chinese private companies.” The article reads.

This political suppression by the CCP is becoming the norm for foreign investors. One thing earlier is that Didi, a taxi-hailing company, just completed its listing at the end of June and raised US$4.4 billion. The Chinese Communist Party’s regulator immediately launched a data and competition investigation on Didi and other companies.

“Beijing is nervous about high-tech companies collecting data on Chinese residents and profiting from it because they believe that only the party can control these databases,” the article said.

Ant Financial is the financial services subsidiary of the entrepreneur Jack Ma’s business empire. After Jack Ma made a slight criticism of the Chinese Communist Party’s regulators, Ant Financial was not even approved for listing last year.

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“So Xi’s signal is that China will not tolerate private competitors undermining the party’s economic or political control of China.” The article said.

The article said that perhaps investors believe that Mr. Xi’s anti-market turn is just talking, or hope that Beijing’s reformists will eventually win; or once Beijing allows Chinese companies to sell shares abroad, there will be no reversal.

“However, under Xi Jinping’s leadership, the previous rounds of economic reforms proved to be retrogressive, and Beijing did not care whether foreign investors would suffer from Beijing’s regulatory arbitrariness,” the article said.

“Wall Street is the big loser this week, but in the long run, the biggest loser is the Chinese people, because their country’s economic openness promises are under threat.” The article concluded.

Editor in charge: Li Yuan#

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