MERICS China Essentials
16 min read

Regulatory crackdown + Afghanistan + Delta outbreak

China’s tech, education and real estate sectors all took a beating from regulators in late July and early August. They joined a wide range of companies and sectors that have found themselves on the wrong side of China’s regulators in recent months. The result has been over one trillion USD worth of market value eradicated. The takeaway: China’s leaders appear increasingly comfortable with accepting considerable economic damage to achieve non-economic goals. 

Data governance: With growing consumer concerns about data privacy and private companies gathering more data on citizens than the government, data governance has become a top priority for China’s leadership. The current cybersecurity investigation of Didi, the ride hailing giant, sends a message to get in line and boost compliance.

For-profit tutoring: Chinese parents are still reluctant to have more than one child, with many naming the high costs of education as a factor. Xi Jinping spoke in 2018 about the need to rein in private tutoring. At the end of July 2021, that industry was essentially smothered out of existence overnight.