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China education crackdown rocks investors: 'Everybody's in the crosshairs'

With losses in Chinese tech and education stocks now exceeding $1 trillion since February, the questions reverberating across trading desks from Shanghai to New York

China President Xi Jinping. (Photo: Bloomberg)
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Photo: Bloomberg

Abhishek Vishnoi and Ishika Mookerjee | Bloomberg
Beijing’s clampdown on the booming private education industry has shocked even some of the most seasoned China watchers, prompting a rethink of how far Xi Jinping’s Communist Party is willing to go as it tightens its grip on the world’s second-largest economy.
 
The crash in tutoring stocks that began late last week spread Monday across the tech sector and beyond, after authorities confirmed reports they would ban a swathe of education industry from making profits. It’s the government’s most extreme step yet to rein in private businesses that regulators blame for exacerbating inequality, increasing financial risk and -- in the