Fitch Ratings Flora Zhu on China's Education Sector

The transcript discusses the impact of China's new education policies on tutoring companies, focusing on the inability to make profits and raise foreign capital. It examines the potential effects on company revenues, liquidity, and debt service abilities. The conversation also explores future sector regulations and government support, particularly in vocational education. The implications for the onshore and offshore bond markets are considered, noting that tighter regulations may not lead to a debt crisis due to sufficient liquidity buffers in some companies.

What was the initial reaction of companies to the new Chinese regulations on after-school education?

• They assessed the impact on their revenue and liquidity.

• They ignored the regulations.

• They decided to expand their business.

• They immediately closed their businesses.

What is the Chinese government's primary focus according to the second section?

• Increasing foreign investments.

• Reducing living costs and improving welfare.

• Promoting international trade.

• Expanding the technology sector.

Which sector is expected to receive strong government support?

• Vocational education

• Real estate

• Technology sector

• Automobile industry

How are education companies expected to handle their debt obligations despite disruptions?

• By cutting employee salaries.

• By seeking government bailouts.

• By relying on their liquidity buffers.

• By issuing more bonds.

What is the expected impact of tighter regulations on the bond market?

• A major debt crisis is expected.

• Minimal impact due to low debt levels.

• Complete collapse of the bond market.

• Increased foreign investment in bonds.