China's biggest private companies are in chaos
  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.
The heavy selling has accelerated in recent months as Chinese authorities slap companies with fines, ban apps from stores and demand that some firms completely overhaul their businesses.
Hundreds of billions of dollars in market value has been erased in the last week alone, after regulators announced curbs on China's for-profit education industry and its food delivery sector.
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."
Corporate China has been rocked by Beijing's reforms.
The government first focused on tech, abruptly pulling an IPO for Ant Group in November. The company, best known for its Alipay payment app, was later ordered to restructure its operations and become a financial holding company.
No part of the tech industry has been spared scrutiny. Alibaba was hit with a record $2.8 billion fine after regulators accused the e-commerce company of behaving like a monopoly. Other firms, including social media and gaming giant Tencent and e-commerce platform Pinduoduo, have been hauled in front of authorities investigating alleged anticompetitive behavior, too.
And early last month, Didi was banned from app stores shortly after the ride-hailing company went public in the United States.
Regulators have set also their sights on other industries. On July 24, China banned education and private tutoring companies from turning a profit or raising funding on stock markets — dramatic new rules that will almost certainly force many major firms to rethink their entire business 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.
But Beijing's decision to frame its unprecedented clampdown as a necessary public good has merit, according to analysts.
The regulatory crackdown on Didi and other internet companies, for example, focused on allegations that those firms mishandled sensitive data about their users in China, posing risks to personal privacy and national cybersecurity.
There's also been a public outcry in the country against widespread data breaches, abuse of personal information, and corporate surveillance.
Inequalities within education and private learning have also spurred plenty of reform. As the government announced its restrictions on for-profit tutoring last week, it claimed the industry has been "hijacked" by capital and that has "distorted the nature of education."
The country's education system is heavily competitive and exam-focused, leading to concerns about student fatigue. Private tutoring, meanwhile, has flourished as urban middle-class families have tried to give a head start to their children by preparing them intensively for exams — but such resources are costly.
The government's focus on inequality is a "smart choice," said Sonja Opper, a professor at Bocconi University in Italy who studies China's economy and the private sector, given concerns about disparities in income and education.
That's not to say Beijing's tactics don't carry plenty of risk. Along with the $1.2 trillion in market value that Goldman Sachs says has been wiped off of prominent stocks, analysts also point to concerns that the crackdown could kill China's entrepreneurial spirit — a critical piece of the country's economic liberalization and rapid growth.
"The increase in regulation can bring some benefits to the Chinese corporate world as some sectors are very unregulated," said Steve Tsang, director of the SOAS China Institute at the SOAS University of London. "But the increase in control also signals to the private entrepreneurs that they must now watch their steps more carefully and bring their businesses in line with Party guidelines or leadership."
The reforms really come back to one thing, according to Tsang, who warned that economic inequality could hurt the legitimacy of the Communist Party if left unchecked.
"I think what Xi is attempting is not to crack down on private businesses but to enhance regulations (or party control) over private enterprises so that they all 'serve the people' or follow the leadership of the Party," he added.  Laura He is a reporter and digital producer for CNN Business. She covers news about Asian business and markets from Hong Kong.  Delta variant hits Wuhan China's spiraling Delta variant outbreaks have reached Wuhan, the original epicenter of the pandemic, prompting citywide coronavirus testing as authorities scramble to contain the city's first reported local infections in more than a year.
On Monday, seven infections were reported among migrant workers in Wuhan, the central Chinese city where the coronavirus was first detected in December 2019. As of Wednesday, a total of 20 local infections have been reported, including 8 asymptomatic cases, according to the Hubei provincial health commission.
The city of 11 million people was placed under the world's first – and arguably strictest – coronavirus lockdown in January 2020, during the height of its devastating initial outbreak. The lockdown lasted more than two months, and Wuhan had not reported any locally transmitted cases since May last year.
But now, the highly contagious Delta variant has put authorities on high alert.
On Tuesday, Wuhan launched a citywide coronavirus testing drive, with residents forming long lines at community testing sites late into the evening.
Some fear an imminent lockdown. Videos and photos shared on social media since Monday show empty shelves and long lines at supermarkets, as residents rushed to stock up daily supplies.
China is grappling with its worst outbreak in months, with more than 300 cases detected in more than two dozen cities. The outbreak first started in the eastern city of Nanjing, where nine airport cleaners were found to be infected on July 20 during a routine test.
The fast-spreading Delta variant has posed a fresh challenge to the country's hardline zero Covid strategy, which relies on mass testing, targeted lockdowns, extensive contact tracing and strict quarantine measures to quickly suppress local flare-ups.
China responded by doubling down on its containment approach, adopting stringent measures not seen in months. Several cities have been placed under effective lockdowns, ordering residents to stay in their homes and canceling flights and trains. Provincial authorities across China have urged citizens not to travel to medium and high-risk areas or leave the provinces where they live unless it is strictly necessary.  Nectar Gan is China Reporter for CNN International based in Hong Kong. She writes about the Asia-Pacific region, with a focus on China. Around Asia
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