why Xi is cracking down on video gaming and private tutors

The additional lessons Wang Gang bought to help his only child prepare for China’s rigorous university exam, or gaokao, were not cheap. In addition to group courses from a private education company, he also paid Rmb6,000 (€790) for his daughter to take one-on-one maths and physics sessions with a retired teacher over the month-long winter school break.

“We are just an ordinary family but we cannot have any regrets when it comes to our daughter’s education,” says Wang, who lives in Baoding, an industrial centre in central Hebei province. “Every point counts in the gaokao. It’s just too important. It will basically decide her life and career.”

Late last month, however, the Chinese government declared that parents like Wang were piling too much work on their children. In a shock decree that rocked the country’s stock markets and the share prices of Chinese education companies listed in New York, President Xi Jinping’s administration announced strict new curbs on tutoring companies that drastically reshape an industry worth more than €80 billion a year in sales.

Last week it appeared that Xi’s nanny state was targeting another lucrative industry – video gaming, which China’s president has previously criticised for increasing “the incidence of myopia among students”.

On Tuesday last a state newspaper published a commentary that criticised online video games as “spiritual opium”. The term is a particularly loaded one for the Chinese Communist party, whose history emphasises the “century of humiliation” that began with China’s defeat by the British empire in the first Opium war of 1839-42 and ended with the party’s revolutionary victory in 1949.

Even in the absence of any new regulations like those targeting education companies a week earlier, shares in Tencent, China’s largest online gaming provider, fell almost 11 per cent.

The tutoring and video game controversies provide a window on to the mounting stresses and strains of middle-class life in China’s big cities. To outsiders, the world’s second largest economy can often seem relentless, immune to even the worst pandemic in a century and notching persistently large increases in consumer spending as prosperity spreads rapidly across society.

But for many residents of its larger cities, their lives have become riddled with anxieties that belie the broader sense of progress – from seemingly unattainable home prices to the hothouse pressure of securing the best education for their children and coveted places at leading universities.

Ambitious parent

And in the background there is the fear that nags at almost every ambitious parent – the possibility that their children will grow tired of the race and seek refuge in the world of video games and the internet, which Xi has railed against for harbouring so many “dirty things”.

Rattled by parental angst, the party’s response has been to adopt the tactics of a nanny state, potentially reversing elements of the compact it has established with urban residents over the past four decades to steadily reduce its interference in their private lives.

“It is parents’ anxiety that is driving the proliferation of after-school tutoring,” says Christina Zhu, an economist at Moody’s Analytics in Singapore. “That anxiety stems from uneven school quality, intense competition and possibly even a lack of confidence in the social security system.”

At stake, Xi appears to believe, is the party’s ability to maintain unchallenged political control, which ultimately depends on its capacity to meet what the president has termed “the people’s demand for a happier life”.

In 2011, when he was still vice-president, Xi told his then US counterpart, Joe Biden, that the Arab spring that was rolling across north Africa and the Middle East had erupted because governments had lost touch with their people, according to two American diplomats familiar with the exchange.

At the 18th party congress in November 2012 that marked the beginning of his first term in power, Xi acknowledged the people’s aspirations for “better education, more stable jobs, higher incomes, more reliable social security and higher standard healthcare, more comfortable living conditions and a cleaner environment”.

Xi and the party have now demonstrated that in order to deliver they are willing to upend entire industries and intrude into deeply personal aspects of people’s lives, such as how to educate and raise their children. Shortly after Xi criticised video games in 2018 for harming kids’ eyesight, the education ministry recommended that children should have no more than one hour of non-educational screen time each day.

“Xi has made it clear that he intends every policy area to be subject to the leadership of the party,” says Steve Tsang, director of the Soas China Institute in London.

Investors

Over recent weeks Xi’s administration has demonstrated that it is not too concerned about the collateral damage investors may suffer as the party extends its reach into new areas.

“Beijing will not hesitate to completely overhaul an entire business environment if it deems it politically necessary,” says Chen Long at Plenum, a Beijing-based consultancy. “All sectors related to providing public goods traditionally viewed as not-for-profit will face greater risks.”

Xi had foreshadowed the move against China’s booming tutoring industry in March when he told a group of educators that the sector was “a stubborn disease that is difficult to manage”.

“Parents want their children to be physically and mentally healthy and have happy childhoods,” the president added. “On the other hand, they are afraid their children will lose before they even reach the starting line…This problem must be solved. Education should not be too focused on scores.”

Ironically, says Zhu at Moody’s, some of the biggest economic victims of Xi’s crackdown on education will be recent university graduates, whose average monthly salary last year was just Rmb5,290 (€700), according to Zhilian Zhaopin, a Chinese online hiring platform.

“The private tutoring sector provides millions of jobs,” she says. “The entire education sector accounted for 17 per cent of employment for recent graduates in 2020, the highest among all industries.”

For most recent graduates, buying a flat in China’s most desirable cities is out of the question. According to EJ Real Estate, a property research institute, last year the average annual home price to income ratio was 40 in Shenzhen, the high-tech hub bordering Hong Kong, 26 in Shanghai and 24 in Beijing.

Cities with ratios of 10 or lower are generally experiencing population outflows and offer little in the way of attractive employment opportunities.

Lianjia Beike, a housing agency, estimates that new graduates now spend more than 40 per cent of their income on rent.

Lie flat

In addition to worrying that some children are doing too much as they prepare for the looming pressures of Chinese urban life, officials and parents also fret about an entirely different phenomenon whereby young people react to mounting social stresses by choosing to tang ping – or lie flat– and withdraw from the world.

Another concept that has caught on this year in China is “involution”, an anthropological term used to describe a process by which some societies fail to realise their maximum economic potential. In Chinese the term is translated as nei juan, meaning to curl or turn inwards.

Che Rui, a Beijing parent, signed his daughter up for supplemental Chinese maths and English classes offered by some of the country’s largest tutoring firms a few years ago, as she moved from kindergarten to elementary school. He welcomes the government’s crackdown on the sector – but also still worries about how to keep his daughter active and motivated outside school.

“The tutoring companies were deliberately creating anxiety,” says Che, who noted that education providers were continuing to bombard him with sales messages even after the government’s broadside against the industry last month. “All discounts and benefits will expire at midnight,” one sales agent warned him over WeChat, the messaging app, if he didn’t rush to sign his daughter up for additional course offerings. “I hope you don’t regret it.”

Che says he is considering signing up his daughter for swimming, music and other recreational lessons, which are still officially encouraged by the government. “I don’t want her to turn inward,” he adds.

Many analysts and parents, however, believe that Xi is addressing the symptoms rather than the disease – the gaokao system itself.

Wang, the father who arranged winter-break cram sessions for his teenage daughter in Baoding, says that “even if there had been a ban, I would still have gone around it by hiring a private tutor”.

The Rmb6,000 he spent on a private tutor during that brief period is equivalent to about 40 per cent of his household’s monthly income, and almost one-quarter of the city’s average annual per capita disposable income of Rmb25,200.

“If you don’t let your child study on holidays, other parents with more resources will and your child will be left behind. Imposing a simple solution on a complex problem doesn’t work,” he adds. “It just shuts the door for ordinary families.”

Anxiety

Another much wealthier Chinese father, who has two teenage children and asked not to be named, says “some parents may cheer the crackdown, but the problem lies with the gaokao and the university entrance system”.

“The anxiety is not going away because it’s not like you’re not in the race any more,” says the father, who went to university in the US and is also educating his children outside China. “Are you rich enough and have connections to do one-on-one tutoring? Online education was the starting point for average people. Their anxiety will come back very soon unless the government completely reforms the education system.

“Look at South Korea, Japan and Taiwan, ” he adds. “When is tutoring ever going to go away in Asian cultures?” – Copyright The Financial Times Limited 2021