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New Oriental Education Drops; China's Xi Calls for Tougher Rules

New Oriental Education shares fell after China's President Xi called for tougher regulations on after-school education and tutoring institutions.

U.S.-listed shares of New Oriental Education & Technology Group  (EDU) - Get New Oriental Education & Technology Group, Inc. Sponsored ADR Report fell on Monday after China's President Xi Jinping called for tougher regulations on after-school education and tutoring institutions.

American depositary receipts of the Beijing company, which calls itself the largest private provider of educational services in China, at last check dropped 14% to $9.55. 

The shares are trading at about their 52-week high near $20, set Feb. 16. 

Xi on Friday emphasized "resolute rectification" of issues attracting widespread public attention in the education sector. 

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He stressed the importance of reforming the evaluation system and developing education that people are satisfied with, according to media reports.

Authorities are planning to crack down on before- and after-school tutoring for kindergarten to pre-college students, according to a Reuters report.

The aim is to lower living costs and help boost the country’s birth rate.

Valuations for education-technology companies in China have tracked higher than those of their global peers because anxious parents are keen to get their children through the notorious gaokao exams and into top universities.

Tutoring companies Zuoyebang and Yuanfudao in Beijing have been fined nearly $400,000 for false and misleading promotion and advertising, according to Chinese media reports.