Chinese stocks overnight witnessed heavy losses for two days in a row. Today morning APAC stocks were also mostly down, including the stocks in Japan, South Korea, Hong Kong, and Australia.
Last Saturday, Chinese regulators published a key reform that will fundamentally alter the business model of after-school education providers. The new rule bans firms who teach school subjects outside schools from making profits, raising capital, or going public. It is also uncertain whether public firms such as New Oriental could still remain listed. After the announcement, New Oriental (NYSE:EDU) slipped more than 50%. This latest reform follows an unprecedented pace of regulatory tightening on private businesses, mostly targeting tech giants such as Alibaba, Didi, and, according to rumors, Meituan. In the FX market, CNYUSD also dropped sharply, from 0.1544 on Tuesday to 0.1537 at press time today.