China has imposed new rules against private tutoring firms which will limit the profit margins.

The decision aims to limit the profit milking tendency of private online tutoring firms.

"Capitalized operations are strictly prohibited," the ministry wrote in its order, adding that such institutions cannot obtain financing through public markets, nor can they seek foreign capital through mergers and acquisitions.

"Those who have violated regulations shall be cleaned up and rectified," it added.

The ministry called the new rules a "comprehensive move to lower the workload and learning hours of students," and added that it wanted to "improve the quality of after-school services."

"Driven by utilitarianism and bound by capital, a large number of out-of-school training institutions in primary and secondary schools, especially those with a wide range of unqualified training institutions, have deviated from the purpose of non-profit education," said Dong Shengzu, director and researcher at the Shanghai Academy of Educational Sciences.