China: What are you doing to your young people?

This column has previously been published in L’Opinion on August 31th 2021

The curb put on private Chinese companies offering private lessons — whose business had rocketed during the health crisis — goes counter to the pattern of reforms that we have got used to seeing from Beijing. This ideological crackdown could have serious consequences for Chinese society.

At the end of July, the Chinese government introduced a measure that more or less amounted to nationalizing the whole of the private educational sector concerning children aged 5 to 18, without compensation. This was a purely ideological measure whose consequences could well be extremely damaging to China, both in the short and long term.

This totally arbitrary decision stands out in that it meets none of the objectives that are officially being pursued. Although it is supposedly a measure to combat inequality, it merely reinforces it, and leaves the single children of the ruling class with the illegal possibility of getting private tutoring. Also, whilst it is supposed to boost consumption, it slows it down even faster because it will cause a stock exchange crisis and a negative “weath effect”, even though the sector only accounts for 2% of Chinese household expenditure. Finally, although it aims to reverse the sudden fall in the birthrate — at 12 million instead of the expected 20 million — it simply prolongs the effect. By officially closing itself off to foreign capital, it is even more of an incitement for the most brilliant young Chinese to flee to the West.

The sector did not fulfil any of the criteria that are considered to justify government action against the tech giants. First of all, there was no risk of monopoly in a highly fragmented industry whose leaders held no more than 5% of the market. Neither was there any specific risk of personal data gathering. The risks were linked to the usual scams — as in any sector in China showing an extremely high growth rate — such as the ones identified by the American market research company Muddy Waters.

17% of the young graduates taken on by the new EdTech industry will join the ranks of the 15% already unemployed, leaving almost a third of educated young people currently without jobs.

The paradox is that, with China, we have become used to the exact opposite in terms of reform: a reliance on privately-owned newcomers to force the state-owned dinosaurs to adapt to the new situation –privatization being ineffectual. In the present case, the government has chosen to do the opposite: to protect public-sector inefficiency by killing off the newcomers in the private sector. However, the latter were contributing — online — to democratizing high-quality education: 100 million young Chinese were being tutored in this way — essentially in Chinese literature, mathematics and English — for only $1,000 a year, i.e. almost one-tenth of the cost of equivalent courses in the West.

New order. If there are no counter-measures correcting this in the coming months, this new order seems to intend to offer “extra-curricular” activities as an alternative, a possible reminder of the Maoist nostalgia that was being advocated in 2012 by Bo Xilai, the former leader of the provincial city of Chongqing and the unlucky adversary of Xi Jinping.

Young Chinese are adopting a “lie flat” attitude to protest against culture of overwork. Lau Ka-kuen for SCMP

As always where education is concerned, the full consequences of these measures will not be known for several years. In the very short term, they are yet another headache for the Chinese leaders: 17% of the young graduates taken on by this new industry will join the ranks of the 15% already unemployed, leaving almost a third of educated young people currently without jobs.

Cultural clampdown. Hence the government has felt it necessary to initiate a general cultural clampdown, strengthening censorship of video games, karaoké, and alcohol consumption after working hours. There is undoubtedly less risk of a violent reaction among young Chinese people than a rift within the same generation of only children, between “Generation Z” brought up on ultra-nationalism, and disenchanted Millennials, taking refuge in the latest trend of “lying flat” (i.e. on the sofa) and contenting themselves with living off their family’s savings.



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David Baverez

David Baverez

Business angel / demon. Based in Hong Kong since 2011. Columnist, author of “Paris-PekinExpress”, “Beijing Express” and “Génération Tonique”.