Since the early 1990s, the central government of China has been gradually privatizing early childhood education. As the main precursor of this large-scale reform in the country, Shenzhen has witnessed several innovative as well as radical changes. The existing public early childhood settings in the city were therefore forced to transform into self-funded enterprises when municipal subsidy was cut in September 2006, and this opened doors to controversy. Aiming to understand the controversy and underlying arguments of the public and to offer suggestions to the policymakers, we collected the Internet postings and analyzed the views presented in Chinese virtual communities. We applied content and statistic analyses on the search results, and the findings indicated that: (a) most of the postings were against the transformation, pinpointing the possible problems in relation to national strategic development, governmental function, the nature of teaching profession, and the development of early childhood education; (b) some of the postings were in favor of the transformation as it was believed to bring out fair competition and reasonable distribution of educational resources; and (c) two post hoc mechanisms were suggested for this reform: one for the redistribution of the limited resources among all the settings and the other for the monitoring of the profit-making level and quality assurance in the individual setting. The lessons learned from this study and the implications for future development are discussed.