BEIJING, July 28 (Reuters) - China’s Ministry of Education said on Wednesday that it had begun implementing a campaign to stop paid after-school tutoring services provided by teachers working for public primary and middle schools.

Two weeks ago China issued sweeping rules that bar for-profit after-school tutoring in core school subjects, in an effort to boost the birth rate by lowering family living costs. The policy also restricts foreign investment in the sector.

The ministry said in a statement on its website that it would also tackle teachers illegally receiving bribes, and show “zero tolerance” towards teachers who “teach only after classes but not during classes”.

The new rules threaten to decimate China’s $120 billion private tutoring industry and triggered a heavy selloff in shares of tutoring companies traded in Hong Kong and New York, including New Oriental Education & Technology Group and Koolearn Technology Holding Ltd.

Under the new rules, all institutions offering tutoring on the school curriculum will be registered as non-profit organisations.

More than 75% of students aged from around 6 to 18 in China attended after-school tutoring classes in 2016, according to the most recent figures from the Chinese Society of Education, and anecdotal evidence suggests that percentage has risen.

China International Capital Corp said the rules are “tougher than market expectations, and we expect material impact on future business and capital market activities.”

The pressure for children to succeed in an increasingly competitive society has given rise to the term Jiwa, or “chicken baby”, which refers to children pumped with extracurricular classes and energy-boosting “chicken blood” by anxious parents.

Existing online tutoring firms will be subject to extra scrutiny and after-school tutoring prohibited during weekends, public holidays and school vacations, the document said. China’s State Council did not immediately respond to a request for comment.

Curriculum-based tutoring institutions would be barred from raising money through listings or other capitalrelated activities, while listed companies would be banned from investing in such institutions, according to the document.

China’s for-profit education sector has been under scrutiny as part of Beijing’s push to ease pressure on school children and reduce a cost burden on parents that has contributed to a drop in birth rates. In May, China said it would allow couples to have up to three children, from two previously.

The policy aims to reduce burdens on students and family finances “effectively” within one year and “significantly” within three, the document said.

Three sources told Reuters last month that the crackdown is being driven from the top. In June the official Xinhua news agency quoted President Xi Jinping as saying schools, rather than tutoring firms, should be responsible for student learning.