Explainer | Beijing’s Big Tech crackdown kills dreams of quick wealth among China’s ambitious young workers

Workers at private tutoring and internet platform companies have seen the value of their stock holdings plummet this year, wiping out savings overnight

Alibaba, Tencent and others minted thousands of millionaires with their IPOs, but the tech sector is less appealing to young talent amid Beijing’s crackdown

Reading Time:5 minutes

People walk along a pedestrian walkway on March 20, near the Tencent Holdings headquarters in Shenzhen, China’s southern tech hub often compared to Silicon Valley. Beijing’s wide-ranging crackdown on the tech sector has made some of the country’s biggest companies less appealing to talented young workers chasing new wealth. Photo: Bloomberg

Published: 11:00am, 4 Sep 2021Updated: 3:30pm, 8 Oct 2021

When software engineer Bruce Wang quit his job at food delivery giant Meituan last year, he gave himself two options: become a bitcoin investor or join a private tutoring company.

Both were promising industries, with the cryptocurrency and tutoring stocks exploding in value. Wang ultimately decided on private tutoring for the job security, but it proved to be an ill-fated decision.

China’s crackdown this year on both private tutoring and bitcoin mining, along with the rest of the technology sector, is affecting tens of millions of people, and it is reshaping how and where the country’s ambitious young tech workers apply their talents.

Until recently, Wang had been optimistic about the private tutoring industry. Demand for online education exploded during the Covid-19 pandemic, and venture capital was pouring into the industry, sending stock prices soaring. New York-listed New Oriental and TAL Education surged 50 per cent last year, while Gaotu Group, formerly known as GSX, doubled.

The New Oriental Education application featuring elementary school summer packages arranged on a smartphone in Shanghai on July 27. New Oriental was a darling of the private tutoring industry until a crackdown from Chinese regulators sent its stock price plummeting. Photo: Bloomberg

With that in mind, Wang took an offer from one of them with a juicy stock option package. After China banned profits in private tutoring, though, Wang’s new-found wealth disappeared overnight

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