This is Exchanges at Goldman Sachs and I'm Allison Nathan, senior strategist in Goldman Sachs research and creator and editor of the and tightening cycle in China and President Gee Jingping's new common prosperity agenda to promote more sustainable and equitable growth. We touched on this topic in a recent

episode but the situation has continued to evolve with regulations targeting

specific sectors now wiping out more than a trillion and a half dollars of market cap from Chinese

equities since their recent peak in mid-February.

Here we focus on what these ongoing regulatory and policy shifts,

as well as potential future actions, might mean for the Chinese economy, its markets, and beyond.

We first turn to a number of China Watchers to better understand the motivations behind

the government's actions and whether they mark a meaningful shift in the relationship

between the government and the private sector in China. Fred Hu, founder,

chairman, and CEO of Primavera Capital, and David Lee, who is an economics professor at Chingway University, see the

latest wave of regulations as largely consistent with the government's goal of

achieving sustainable and socially responsible growth.

And they argue that the government is targeting certain behaviors and industry practices,

especially in the tech sector that work against these goals rather than the private sector itself

and that this is not unlike actions that Europe, the US, and the other major economies are taking

to address the disruptive effects of digital innovation.

Here's Lee.

If you put the current regulatory changes into a larger context than just the previous

five, three, two years, then you will see a big picture a clear big

picture that is President Xi Jinping since coming to power in 2012 has been saying that China will seek quality growth rather than rapid growth.

By quality growth he actually meant three things.

Number one he wants economic growth to be based on

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