It used to be a case of when the US sneezes… Now it’s China. The Chinese government’s crackdown on the tech sector, the latest edu-tech, is sending ripples across the world, with local internet heavyweights Naspers and subsidiary Prosus also catching the cold.
For years, China’s private education companies had been the darlings of investors from New York to Shanghai, building a $100bn industry on the promise of the world’s largest and arguably most competitive schooling system, reports Bloomberg. Then they got caught up in the Chinese government’s sweeping efforts to rein in the country’s technology giants.
The move wiped billions off the stock market, and one teacher-turned-billionaire, Larry Chen, alone lost $15bn, stripping him of his billionaire status. The promulgation of the sweeping regulations that bar foreign investors and listed companies from participation in the edu-tech sector comes at a time when the Covid-19 pandemic has forced many students worldwide to embrace online schooling.
So, what’s driving the crackdown? Bloomberg believes the industry’s future hinges on two of the ‘most powerful and anxiety-inducing forces’ in China today: the pursuit of wealth and status, and the Communist Party’s enduring obsession with maintaining social order. Which begs other questions: Will it ever be resolved and where does this leave investors? With such a huge exposure to tech behemoth Tencent, how will Naspers and Prosus hold up? Seems we’ll just have to wait and see.
Here’s a roundup of the world’s top and most interesting headlines:
SA Business
- PwC and Nkonki: The auditors who clipped SAA’s wings – Daily Maverick
- Cyber-attack on Transnet causes chaos – MyBroadband
- Mango unions grew tired of govt promises, filed for business rescue, court documents show – News24
Global Business
- Ethereum co-founder says safety concern has him quitting crypto – Bloomberg
- Bezos offers NASA $2 billion in exchange for moon mission contract – Reuters
- Tesla shrugs off chip shortage to post $1bn quarterly profit for first time – Sky News
Markets
- Asian markets mixed but traders on edge after China crackdown – AFP
- Markets are expensive, but some stocks aren’t – Forbes
- Oil up, hopes rise that vaccines, tight supply will offset Covid-19 worries – Investing.com
In-depth
- South Africa’s political crisis is far from over: The fallout is likely to be chaotic and violent – Daily Maverick
- Military not a magic bullet: South Africa needs to do more for long term peace – The Conversation
- Everything you need to know about vaccines – our only viable strategy for living with Covid-19 – Daily Maverick
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