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Private enterprise Chinese for-profit-education stocks and technology stocks are experiencing an unprecedented sell-off amid growing concerns of Beijing’s crackdown over tightening regulations.

Spooked investors and hedge funds have been selling off their holdings, which have seen many companies lose billions of dollars in market value virtually over night.

Why Are Chinese Tech Stocks Crashing?

For months now, China has been trying to rein in big tech stocks over issues such as data security, financial instability, and monopolistic business practices. For example, on July 24, Beijing announced that for-profit educators can no longer accept financial investment from overseas, raise capital through the stock market, or be directly acquired.

According to Chinese authorities, private educators are behind the country’s low birth rate and widening wealth gap.

This is not the kind of news that is going to boost share prices.

Shares in Hong Kong-listed New Oriental Education & Technology Group(NYSE:EDU) cratered more than 70% over just two trading sessions.

Chinese regulators are also calling for how food delivery companies treat their drivers. The country’s State Administration for Market Regulation said that companies should ensure that riders are paid the local minimum wage and improve training.

Not exactly earth shattering, but it did rattle the industry, with Meituan, a Chinese food delivery platform, losing more than $60 billion of its market value over just two trading sessions. The company’s shares are down approximately 35% year-to-date.

Other big Chinese tech stocks have experienced massive sell-offs, including two of China’s most valuable companies, Alibaba Group Holdings (NYSE:BABA) and Tencent Holdings ADR (OTCMKTS:TCEHY). Over a 72-hour period, shares in Alibaba, China’s biggest e-commerce company, slid 15% while Tencent shares tumbled 20%. Since peaking in February, each stock has erased hundreds of billions in market capitalization.

Ride hailing behemoth, Didi Global Inc. (NYSE:DIDI) only went public in late June, but it’s share price has cratered more than 50% since then. Just two days after it raised $4.4 billion in an initial public offering, Beijing launched a cybersecurity investigation into the company. Chinese regulators also removed its app from the country’s major app stores.

Chinese authorities could turn their attention on other fast-growing sectors they believe do not fit into the Communist Party’s philosophy, including healthcare and real estate. While some analysts believe the tough reforms will improve tech and other industries being targeted, other believe it will stifle inventiveness and crush growth.

Given the high volatility and uncertainty about just how far Beijing will go, investors are running for the hills before their portfolios become worthless. This could bring bargain hunters in from the sidelines, but, as the saying goes, don’t try to catch a falling knife.

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Chinese technology and education stocks are getting decimated as regulators in Beijing look to crack down on Internet companies and other industries they believe are running out of control and do not meet the country’s social goals. This makes it almost impossible to predict what stocks regulators will focus on next.

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