The People's Capitalism

President Xi Jinping is putting entrepreneurs and investors on notice that ordinary Chinese come first

- Tom Hancock and Tom Orlik, with Lulu Chen, Lin Zhu, Yinan Zhao, Eric Zhu, Abhishek Vishnoi, Jeffrey Hernandez, and Yujing Liu

Xi Jinping smiled and hinted at a policy bombshell that would soon roil stock markets from Shanghai to New York.

It was mid-June, and the most powerful Chinese Communist Party leader since Mao Zedong was holding court at an after-school club for elementary students in Xining, a city on the Tibetan Plateau. Acknowledging the growing pressure on parents to spend money on expensive private tutoring for their children, President Xi promised to ease their burden. “We must not have out-of-school tutors doing things in place of teachers,” he said. “Now the education departments are rectifying this.”

Although Xi’s comments went largely unnoticed by global investors at the time, the crackdown on tutoring companies that followed has become the starkest illustration yet of the Chinese president’s commitment to a sweeping new vision for the world’s second-largest economy—one in which investors’ interests are subordinate to ensuring social stability and national security.