The Chinese film “American Dreams in China”, released in 2013, was an instant box office hit in China, capturing the country’s optimism about Western-style entrepreneurship. It tells the story of a young man who lands a seat at a prestigious Beijing university and starts a wildly successful tutoring company called New Dream. The events are loosely based on the real-life journey of Michael Yu, the founder of China’s largest tutoring company, New Oriental. The Yu-like character studies Dale Carnegie mantras, teaches students KFC, and woos a gorgeous classmate while preparing for a US visa interview. At the end of the story, he swapped his school uniform for a business suit and turned his tutoring service into a billion dollar business. He doesn’t end up with the girl or the visa in the end, but he gains fame and capital – the American dream, in other words, at home in China.
The film is a kind of love letter to capitalism. It opens with a danceable remix of the socialist anthem “The International” and ends with an inspiring montage featuring real-life Chinese entrepreneurs, from Alibaba’s Jack Ma to chili sauce tycoon Laoganma Tao Huabi. by Yu himself. The film suggests that any underdog with a sense of street and bustle can rise to the top. By the time the film was released, Yu had become a household name, known as the “Godfather of Education”. New Oriental was a thriving empire of learning centers, online courses, and bookstores, all built on the promise of leading students to “success.”
Last year, any vestige of China’s entrepreneurial optimism was abruptly shattered. On July 24, the Chinese government introduced a policy known as the “double reduction,” which directly targeted the country’s hypercompetitive education system. Schools were ordered to limit the amount of homework assigned to students, and tutoring companies that taught a core K-12 curriculum weren’t allowed to prioritize profit, go public or to raise foreign capital. Overnight, the tutoring industry faced an existential crisis. New Oriental laid off 60,000 of its employees, online English course platform VIPKid shut down some of its services, and NLP Education Group, renowned for its math Olympiad-style classes, has moved to a “quality education” program that teaches calligraphy instead of calculus. One of China’s biggest education companies, Yuanfudao, has started posting fashion designer job vacancies, sparking rumors that it is shifting its focus to winter jackets. “The era of private lessons is over,” Yu wrote in a somber post on his WeChat account.
In reality, the promise of that era—that with the hustle and bustle, hard work, and help of New Oriental, anyone could climb the ladder of meritocratic success—had long since faded. Instead, young Chinese have found themselves trapped in an “involution crisis,” endlessly vying for college places, white-collar jobs and apartments. It’s a race that apparently begins in the womb. Overworked children are nicknamed soul, or “baby chickens,” which refers to a 1950s pseudoscientific health treatment in which patients were injected with fresh chicken blood to boost energy, except now fresh blood is an extra math lesson. “Come, and we’ll tutor your kid,” read an ad that went viral on Chinese social media in 2020. “Don’t come, and we’ll tutor your kid’s rival.”
The private education industry, which Chinese President Xi Jinping condemned in March 2021 as a “stubborn disease,” expected some sort of judgment. What surprised everyone was the suddenness and severity of the government decree. In cutting tutoring, the government seemed to have multiple objectives: to rein in unchecked capital in the education system, to relieve pressure on overworked students and parents, to tackle the slow birth rate (assuming fewer money spent on tutoring would mean a greater incentive to have babies), and impose greater ideological control on students in general. In August, foreign textbooks were banned from elementary schools and middle schools, and teaching the “Xi Jinping Thought” was made compulsory for all Chinese students from elementary school through college. English language learning, a traditional route to Western universities, has also fallen out of favor; last year a government adviser proposed removing English from core subjects taught in schools and from university entrance exams.
Skeptics have been watching to see how the double reduction will work in practice. Yan Yifei, a social policy researcher at the London School of Economics, believes that as long as China’s highly competitive university entrance exam – the gaokao— still decides who enters elite schools, students and parents will seek every advantage. Already, the tutoring industry has continued underground, with wealthy families hiring expensive private tutors as “professional nannies”. Some schools in Beijing and Shanghai have launched pilot programs offering free after-school tutoring, creating a new problem: overworked teachers.
But private education was not the only symptom of unfettered capitalism the Party wanted to tackle, and the double reduction proved to be one of the first of several drastic government policies that affected many sectors of Chinese society. The policies were so broad in scope that they were described as a “summer blizzard” and a “crackdown on everything”: not only on after-school tutoring, but also on Big Tech monopolies, cryptocurrencies, real estate speculation, “excessively high income”. ”, high-frequency stock trading, idol fandoms and weekday underage video games.
In August, Xi appeared to give the regulatory blizzard a name: common prosperity. For three decades, China has been living the first half of a famous saying by Deng Xiaoping: “Let some get rich first”. Last summer marked the transition to the second semester: “with the aim of achieving common prosperity more quickly”. The old neoliberal laissez-faire of Deng’s time was over; Xi’s top-down and tightly controlled vision of equitable development was in order. Some commentators have called the common prosperity the coming of a second cultural revolution, a sort of ideological cleansing of decadent Western values. The country is going through a “deep revolution”, retired editor Li Guangman wrote in an article that has gone viral. The “red” would return, he proposed, and the Chinese capital market would no longer be a “haven for capitalists to get rich overnight”. Others have offered more sober analyses, viewing common prosperity not as the end of China’s market economy but as a technocratic curtailment of its excesses – not a reversal towards a Maoist utopia but a pivot towards a self-defeating capitalism. state with un-American characteristics.
Dan Wang, a technology analyst, explained that Beijing has become disillusioned with the US economic model, which he sees as being led by Wall Street on one side and Silicon Valley on the other. He sees Chinese leaders as “trying to reject capitalism with American characteristics. . . in favor of a capitalism with German characteristics, characterized by a dynamic ecosystem of industrial enterprises and a more egalitarian society. Seen in this light, the Chinese government may be building an education system and development model that aspires to divert talent away from what it calls “bloated growth,” like cryptocurrencies and tutoring. for-profit, towards what he calls “high-quality growth”. » such as infrastructure construction and agriculture. Last October, the central government issued a directive pushing for the “high-quality development” of vocational education, which prioritizes training in areas such as advanced manufacturing and alternative energy sources. In this new era, ideal young government graduates are not joining hedge funds, flipping properties, or listing metaverse-related startups; they work in what Wang calls “the physical world” and proceed to “make babies, make steel, and make semiconductors.”
In response, tech giants from Tencent to Alibaba have set up Common Prosperity Funds: multibillion-dollar pledges for “high-quality growth” initiatives, such as village revitalization. rural areas and improving the welfare of gig workers. In 2020, Jack Ma fell out of the Party’s good graces and saw his influence curtailed and the IPO of an Alibaba-affiliated company suspended. Subsequently, he undertook a trip abroad, to Spain, to study agricultural technology. Michael Yu also jumped on the quality growth bandwagon, announcing during a live stream in December that New Oriental was turning to a new venture: an online farmers market. Instead of giving English lessons, Yu’s employees had been reassigned to new jobs to help him sell rice, apples and beef.