Investors Rethink China Bets After Beijing Crackdown Triggers Stock Rout

American investors are asking whether China Inc. is still worth the risk following a widening series of regulatory crackdowns that have wiped some $400 billion off the value of U.S.-listed Chinese companies.

Investors ranging from pension fund Orange County Employees Retirement System in California to money manager William Blair & Co. are rethinking their portfolios following Beijing’s decision last week to curtail the operations of China’s for-profit tutoring industry along with its ongoing campaign to rein in tech companies. The moves fueled large declines across sectors of China’s stock markets and hammered Asia-focused funds stateside.

The investor retreat sent tutoring firm TAL Education Group ’s American depositary receipts down some 70% in a matter of days to $6.19 Friday morning. TAL traded above $90 in February. American depositary receipts, or ADRs, are certificates issued to U.S. investors that represent a specified number of shares in a foreign company.

New Oriental Education & Technology Group Inc. has fallen roughly 66% since July 22 and was at $2.24 Friday morning.

It was the latest of regulatory crackdowns that have hit the value of Chinese firms as large as Tencent Holdings Ltd. , even as U.S. indexes have risen to records. Earlier regulatory moves that had rattled companies such as Alibaba Group Holding Ltd. , its unlisted sister company Ant Group Co. and Didi Global Inc., which is considering going private again to placate authorities, had already caused concern among western investors.