How Xi’s Four Pillars of Regulation Will Reshape China’s Big Tech

How Xi’s Four Pillars of Regulation Will Reshape China’s Big Tech

From the US to the European Union, governments are clearly uneasy with the pervasive power of Big Tech: The influence of their social media platforms on elections, the security of the vast amount of consumer data they store, and the exploitation of gig economy workers who don't enjoy health insurance or receive overtime pay. In the US, Congressional hearings have been conducted and anti-trust lawsuits filed, but nothing substantial has come about. Judging by the Nasdaq 100 Stock Index, Big Tech in the West is still thriving.

China's political leadership perceives the same set of problems as well. But China is willing to go a lot further to rein in the clout of its tech giants.

Look at what's just happened to after-school tutoring providers be a good warning. In a sweeping overhaul, China is banning companies that teach the K-12 school curriculum from making any profit. On Friday, New Oriental Education & Technology Group Inc., a blue-chip, tumbled down 54% to close at $2.93 per share, or $5 billion market cap. The company's net cash, adjusted for deferred revenue and refund liabilities, pegs this stock's worth to $2.30, according to a Goldman Sachs Group Inc. estimate. Essentially, investors appear to be