China's crackdown on private enterprise has wiped out more than $1.2 trillion in market value for many powerful Chinese companies and stoked fears about the future of innovation in the world's second largest economy.

But the end goal of Beijing's aggressive bid for control isn't about creating chaos. The government wants to make clear to its corporate champions that tapping capitalist markets is fine — as long as it is on the ruling Chinese Communist Party's terms.

Chinese authorities slap companies with fines, ban apps from stores and demand that some firms completely overhaul their businesses.

The way Beijing sees it, the efforts to rein in private enterprise are meant to protect the economy and the country's citizens from instability. They're also intended to fix longstanding concerns around overwork, data privacy and inequality in education. "Ultimately, Beijing's crackdown on private business is about control," said Alex Capri, a research fellow at the Hinrich Foundation. "The main priority is about preventing behavior amongst private companies that could engender more independent and potentially non-conformist activities, which undermines Beijing's state-centric model."

The crackdown is "unprecedented in terms of its duration, intensity, scope, and the velocity of new policy announcements," analysts from Goldman Sachs wrote in a research report last week that called the strategy a "rebalancing of socialism and capital markets."

"Chinese authorities are prioritizing social welfare and wealth redistribution over capital markets in areas that are deemed social necessities and public goods," they added.

https://edition.cnn.com/2021/08/04/tech/china-crackdown-tech-education-mic-intl-hnk/index.html