Maybe the Communists tolerate traditional martial arts schools because they are ineffective at producing people who can actually fight?
As for the occult powers (all tied to "qi") that some taiqi practitioners claim to have, perhaps an exorcism is in order.
MMA vs. Tai Chi
Being results-oriented is good.
A couple of more challenges like this and it could be the death of the wuxia stories. (Western fantasy does not have this problem as their combat training is realistic.)