The verb participle "thinking" modifies the noun "people". Together they form the noun phrase "thinking people" which is the subject of the relative clause. If you'd like me to explain how the relative clause works in this sentence, just put in another post.
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ccyimingDo you think the second understanding also reasonable?
ccyiming or is it used as the object of 'do' in the sentence?I assume you mean this sort of structure.