Children across China were no doubt overjoyed when the government announced a sweeping crackdown on the country’s notoriously high-pressure tutoring industry this summer. Many were probably less pleased when, just a few weeks later, authorities announced that online gaming for under-18s would be limited to just three hours a week.
Draconian new restrictions on tutoring and gaming are just two small aspects of the sweeping regulatory action China’s government agencies have taken in recent months, but they provide a useful keyhole through which to try to unpack a nationwide tightening of rules that is touching on everything from multinational corporations to children’s playtimes.
There’s been no shortage of attempts to divine a common theme behind the crackdowns – not least from Western investors who have been left scrabbling to work out what this means for their money. But while any single answer will be impossible to find, it’s worth taking a step back to see the issue through political – not economic – eyes.
As attention turns to readying the country for its centenary in 2049, Xi presides over a China that is cautiously confident – confident that strong performance, throughout both the pandemic and several decades of economic growth, has built up a bank of public goodwill that can withstand bold policy changes, but cautious, too, that there are very real policy challenges looming on the horizon. Chief among these are a growing chasm between rich and poor, and a demographic crisis that threatens to see more than 40 per cent of China’s population over retirement age by 2050.
Neither of these has an easy policy fix. Central government will need to find creative ways to affect genuine socioeconomic change, before these issues come to threaten the stability that the CCP prizes above all. Fixing inequality will require chipping away at a gruelling work culture that is leaving many young urbanites disenfranchised, and tackling a stark rural-urban divide. Or, at the very least, it will mean convincing the population that a certain level of individual inequality can be tolerated in the name of national prosperity.
The issue of an aging population is trickier still, but the basic principle of the solution will be the same: societal change, not just sloganeering. Calling on parents to have a second or third child as a matter of patriotic duty won’t be enough – the government will have to meaningfully address the socioeconomic chasms that mean only China’s richest can afford to have a second child.
None of this is news to central leadership. As officials gear up for Party Congress next year, “common prosperity” has emerged as the latest buzzword. Focus is increasingly shifting to look at how China can ensure the quality of economic growth, not just the quantity. In other words, China has succeeded in growing rich – now it needs to make sure that everyone is feeling the benefits.
The tutoring crackdown – the first aspect of the recent regulatory action to really make headlines abroad – is in its own way part of this push for common prosperity. Under new regulations, for-profit tutoring on any of China’s core curriculum subjects has been banned, effectively crippling an industry worth an estimated £87 billion. But, in leadership’s eyes, the industry-specific economic hit is worth the long-term collective benefit it could bring.
It’s tempting, as many have done, to read the crackdown as an assault on Western influence. But the truth is likely less outward-looking. The crackdown affects far more than foreign-language tuition, and even then, the majority of China’s English teachers are themselves Chinese. Instead, there’s a genuine concern that the current system is causing unsustainable burnout for students, with an estimated 92 per cent of urban parents enrolling their children in extracurricular classes.
And perhaps more important than the children themselves are their parents, who Beijing is hoping might start to consider the possibility of a second child thanks to their newly freed-up time and cash. Even if that’s a little too optimistic, turning down the pressure on China’s cut-throat education market might at least start to chip away at a rat-race mentality that is leaving many disillusioned.
The gaming ban is a similar olive branch to overstretched parents – at least according to official explanations. Restricting under-18s to just an hour of online gameplay on Fridays, Saturdays and Sundays aims to rein in what state media has labelled an “electronic drug” plaguing the country’s youth. This is more than just an empty threat (or promise) – players of China’s wildly popular online games are already required to register with a verified name and ID number, making it easy to ensure gaming companies aren’t letting children play outside approved hours.
But, much like tutoring, gaming restrictions are envisioned as more than just an isolated fix. Time limits have been accompanied by increasing regulation of content, both in games and media more widely, from banning depictions of “effeminate” men to promoting a focus on “core socialist values”. It’s more than just an issue of gaming addiction: it’s about curbing what central leadership sees as unhealthy cultural influences.
Seen long-term, this is once again a question of both quantity and quality. Beijing is not only trying to boost birth rates, but also to make sure that children are raised in a “quality” environment that produces citizens ready to contribute to an economically and socially prosperous country. The education and gaming crackdowns function on two levels, aiming to address parents’ immediate discontent while also shaping the cultural values of the coming generation.
When we start considering seemingly disparate regulatory action as a means to a socioeconomic end like this, puzzle pieces start falling into place. Gaming and education crackdowns are designed to foster “healthier” home lives, proposed real-estate taxes aim to make home ownership more accessible, and the regulation of tech giants is an attempt to ensure that the growing economic might of private enterprise works in service of the Party-state’s political power. All aim – however optimistically – to align state and citizen in pursuit of a common goal.
Of course, there’s more behind much of this regulatory action than simply a push for common prosperity – a desire for strategic decoupling with the West and inter-agency competition are playing their own parts too. But in general, as outsiders looking to understand Beijing’s thinking, we should be careful not to overstate our own importance in the process. For now at least, regulatory action is much more about getting China’s own house in order than taking aim at anyone else.
The past few months have made it increasingly clear that Beijing isn’t just paying lip service to the idea of quality growth. Central government has proven willing to upturn hugely profitable industries and take significant economic hits in pursuit of eventual political gain. In other words, we should make no mistake – the short term may be turbulent, but it’s being done in the name of long-term stability.
make no mistake – the short term may be turbulent, but it’s being done in the name of long-term stability.