๐๐ก๐๐ง๐๐ ๐ฏ๐ฌ. ๐๐ข๐ฌ๐ข๐ค๐จ? Trade-off between ambitious tech companies and a strong-regulatory government? The Chinese government is banning an entire industry from making money, and for investors, the question is what next? China is known for its tough education system and sense of duty, which makes education and thus e-learning a high priority in the Chinese market. According to iiMediaResearch and iResearch, e-learning revenue exceeded $60 billion in 2020, and the Corona crisis has pushed the e-learning market up to a 100 billion valuation. ๐๐จ๐๐ก ๐๐๐ฅ๐ ๐ฅรค๐ฌ๐ฌ๐ญ ๐ฌ๐ข๐๐ก ๐ฃ๐๐ญ๐ณ๐ญ ๐๐จ๐ซ๐ญ ๐ค๐๐ฎ๐ฆ ๐ฏ๐๐ซ๐๐ข๐๐ง๐๐ง, as over the weekend the Chinese government reformed or away-regulated and announced to take away the business basis of e-learning platforms. According to this, companies that teach school curriculum programs are no longer allowed to make profits or go public. Furthermore, children under the age of 6 may no longer be taught at all and the programs must be discontinued.
News regarding economic intervention must always lead to a re-evaluation of one's portfolio. In the short term, many investors remain in the dark and the confidence to make money with China stocks, especially in the tech sector, has definitely disappeared. We do not like the interventions at all, of course, nevertheless, the strong correction can be used at the moment for optimistic investors and enter the Chinese market countercyclically. ๐๐ข๐ ๐๐๐ฐ๐๐ซ๐ญ๐๐ญ ๐ข๐ก๐ซ ๐๐๐ง ๐๐ก๐ข๐ง๐๐ฌ๐ข๐ฌ๐๐ก๐๐ง ๐๐๐ซ๐ค๐ญ? ๐๐๐ข๐ ๐ข๐ก๐ซ ๐ข๐ง ๐๐ก๐ข๐ง๐๐ฌ๐ข๐ฌ๐๐ก๐ ๐๐ข๐ญ๐๐ฅ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ข๐๐ซ๐ญ ๐ฎ๐ง๐ ๐ฐ๐๐ง๐ง ๐ฃ๐ ๐ฐ๐ข๐ ๐๐๐ฐ๐๐ซ๐ญ๐๐ญ ๐ข๐ก๐ซ ๐๐ข๐ ๐๐ค๐ญ๐ฎ๐๐ฅ๐ฅ๐๐ง ๐๐ร๐ง๐๐ก๐ฆ๐๐ง?
A small video recommendation can be found here from CNBC, who conducted an interview with John Rutledge (Safanad Chief Investment Strategist):