As a seven year China expat, and (since leaving China in January 2020) an online teacher who lost about a third of his clientele to this (I've been restructuring to minimize dependence on Chinese clients for about 8 months because I've seen this coming for more than a year, though I didn't realize how suddenly it was going to happen), I feel your wife's pain but I also have to ask, "how did this catch you by surprise?"

The motives are simple. China cannot abide the idea that their children are being taught by anyone who is beyond the reach of the Party and thus cannot be punished if they teach something that shatters the CCP's myths (which are all pervasive and cover everything from evolutionary biology to history to geography to cooking). Even the most off-handed remark runs the risk of making a student question what the "Holy Communist Church" and it's Pope, Xi, have taught.

This entire industry was one gigantic window through which millions of impressionable young Chinese students were getting the one thing the Party fears most: contact with the outside world. And Chinese money was leaving China and going into overseas pockets to pay for it. Did you really think a paranoid, isolationist state like the Self-Anointed "Central Nation" was going to allow this to go on?

Sorry if I sound callous. I know how worried your wife must be, having her entire career ripped out from under her with minimal notice like this. That's China. Believe me, I've suffered the same before and I don't know a China expat who hasn't. For those of us who lived there, we simply know "you roll in the mud with China, don't expect to stay clean." For those back home whose only contact with China is online through work, it's not so obvious. But believe me, this is simply the nature of how China works, and anyone whose career is dependent in any way upon China, can and WILL have this happen to them at least once every few years.