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The Real Agenda Behind China’s Crackdown on Educational Technology

China has been conducting a massive, society-wide crackdown this year

By Paula SuarezPublished 2 years ago 7 min read
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China has been conducting a massive, society-wide crackdown this year. We've seen it in pop culture with the recent suspension of K-Pop accounts via Weibo, a Chinese social networking platform. The banning of Marvel's latest blockbuster was due to comments by the star that were deemed anti-communist. It has been evident in the tech sector with the Chinese Communist Party (CCP), tightening the belt on Chinese tech companies like Didi and Meituan because of their "disorderly growth." We have also seen Beijing transform the private cram school sector inside-out.

Although the Chinese leaders claim that they are trying to make society more equitable, their real motives should be a red flag to all Western entities, organizations, and individuals who seek to do business or invest in China.

A more just society or one that is better controlled?

One exam is used to determine the future of an individual in many Asian countries, including South Korea, China, and Taiwan. It is known as the "gaokao" in China. This refers to the multi-day, intense process that makes Western university entrance exams seem like a walk in the park. Because the test is so difficult and fiercely competitive, and the result so important, parents from all socioeconomic backgrounds spend huge amounts of money to send their children "cram schools," which are after-school tutoring academy where students study late into the night. Because tuition fees are so high, middle-class and low-income parents can't afford to send more than one child to these schools.

One reason for China's low birthrate is the high cost of schooling. This presents a problem to any nation that wants to be an economic powerhouse and eventually, to replace the U.S.A as the dominant global superpower.

Due to the pandemic, there has been an increase in online cram schools. The educational technology or EdTech sector has seen a rise in China's EdTech startups, which have collectively raised billions in investment. Although this did not alter the harsh financial realities faced by Chinese parents with regard to cram school, it gave Beijing an opportunity to address declining birthrates and tighten its grip on society.

Private cram schools have many teachers who are Westerners. This is because it's common to believe that Chinese teachers are superior to those from the West. It's easy to see why the CCP would view this as a problem if Western teachers were allowed to teach students without any government interference.

Cram schools were the only place in which the state didn't control every aspect of curriculum, as they have been doing with regular schools on Hong Kong and here. This includes private, American-run schools . Beijing decided to fix this problem by removing all Western teachers from the schools and confiscating their ownership.

This allows officials to do multiple things simultaneously. It allows them to encourage citizens to have more children in order to continue economic growth. They can also use the claim that they have "solved the problem of expensive and unjust cram schools" and made them affordable for all. The next step is to seize ownership of private cram school cram schools. This allows them to control all education students are exposed too, from grade school to university. It also ensures that all content is approved by the Communist Party and in support of its agenda. They can also stop students being exposed to the independent and creative thinking of the founders of tech-centered tutoring platforms, who have been pushing the boundaries of what they were allowed to do under Beijing's watchful eyes.

Who is Boss in the Tech Industry

Every move made by the Chinese government is part of a long-term strategy. This is something that most people, including the West, are often unable or unwilling to see. We now come to another item on CCP's agenda. Keeping the large state-owned enterprises, the center of China's economic power and its economy, centered in manufacturing rather than tech. The Party believes that one of the problems that tech companies who go public on global stock exchanges are facing is that they have to comply with international accounting standards that require transparent auditoring. China has always refused to be held accountable for any international standards, claiming that they have their own standards and are sovereign nations. (Of course, this resistance to international standards leads to problems like the Luckin Coffee debacle in which the chief operating office of the company notoriously falsified its sales reports.

Beijing wants to preserve the economic base in manufacturing. However, Beijing also needs to forcefully remove private cram school founders from their businesses. This helps Beijing to fulfill another agenda item: limiting the economic and social power of tech companies. China's recent actions against online cram schools are understandable when viewed in this context. It is part of a larger plan to keep tech companies in their proper place in society. WeChat, Didi, Alibaba and Didi have pushed the boundaries of what Chinese companies have historically been able do. This has not been well received by President Xi Jinping or Party officials who have, over the past year been making examples of tech companies as well as the entrepreneurs behind them. The argument is usually about protecting users' information, preventing monopoly or making society more equal. The truth is that the Party is the law and no one can be above it.

Affecting the West, Maintaining Dominance

CCP's chess moves are not based on a long-term, big-picture strategy. Instead, they consider how each move can serve multiple purposes. It may be limiting the power of tech companies or taking control of online cram schools as it did recently. One of the desired consequences for the Party is that Western investors are hurt or disabled. This is not only a retaliation against the U.S.-China Trade War, but it is also part of the Party’s multifaceted strategy to secure China's future manufacturing and economic dominance. It is also a way for the Party to ensure that no one outside (e.g. the West) can threaten the Party's central control and dominance.

Beijing has a modus operandi that allows companies doing business in China first to grow and succeed. This applies to both Chinese companies that are heavily backed in part by Western investors and Western-owned Chinese companies. Party-approved entities learn from these companies, and the next step, almost always, is one of the following:

These businesses and their investors can be destroyed by inventing a reason for confiscating the companies or their intellectual properties and then expulsion all Western managers and employees.

Or, in the case of influential and powerful Western companies, to leverage them for the Party's nationalist agenda.

It has already done this with Tang Energy Group in Texas, an American-based clean energy company. It is doing the same thing as it did with online cram schools, just like it has done in the past with Western companies. If both Disney and Western banks don't tread carefully, they could find themselves being subject to both the strong-armed and the weak-willed options of supporting the Party's agenda and having their businesses in China confiscated by the state.

The question is: Will Western and international organizations be able to recognize the risks associated with doing business in China, or investing in Chinese companies? There are some signs they are starting to. However, it remains to be seen if anything is going to change.

Investors and businesses in Western countries have been blinded by China's huge market. This is why they continue to make the same mistakes no matter how many times the story plays out. This could be especially problematic if some of the most influential universities in Western countries, such as Yale and Harvard, who are currently collaborating with China and Harvard, which have received $97.3million in giftsfrom mainland sources, become trapped into compromising situations. These institutions are the future leaders of West. It is frightening to think about what might happen if they are forced to support China's policies, or their efforts to punish China.

It's dangerous, and China excels at it. It is something we need to improve on.

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