Shares of Chinese tech giants, including Alibaba and video-sharing site Bilibili, experienced a decline on Wednesday following the recommendation by China’s cyberspace regulator to impose limitations on smartphone usage among children under 18. The proposed measure aims to restrict children’s phone usage to a maximum of two hours per day. This initiative comes four years after the implementation of gaming restrictions for children in the world’s second-largest economy.
The Cyberspace Administration of China (CAC) has proposed new rules that not only limit screen time but also ban children from accessing the internet on mobile devices from 22:00 to 06:00 local time. As part of the proposed regulations, industry players such as mobile phone manufacturers, apps, and app stores will be required to develop a “minor mode” function that sets usage limits based on different age groups.
Under the suggested guidelines, children between the ages of 16 to 18 would be permitted two hours of screen time daily, while those under the age of eight would have a mere eight minutes allotted. These proposals are currently open to public feedback before finalization.
Industry observers anticipate that technology giants will be responsible for enforcing these rules, similar to the enforcement of gaming restrictions. Ray Wang, founder and CEO of Silicon Valley-based consultancy Constellation Research, explained that while there may be workarounds such as children using their parents’ devices, overall, gaming restrictions have been implemented effectively.
As a result of this news, Alibaba shares closed over 3% lower in Hong Kong on Wednesday, while Bilibili experienced a drop of nearly 7% in the same region. By mid-day on Thursday, Alibaba’s stock was trading around 2% lower, and Bilibili was down by 0.5%. However, technology giant Tencent, which initially closed about 3% lower, saw a slight recovery with a 0.1% increase in Hong Kong.
China has previously taken measures to combat video game addiction among children, citing its negative impact on their health. In November 2019, the country implemented a curfew on online gaming for minors, prohibiting gameplay between 22:00 and 08:00. Additional restrictions were introduced, limiting gaming sessions to 90 minutes on weekdays and three hours on weekends and holidays. Nearly two years later, authorities further tightened regulations by capping children’s gaming time at three hours per week. State media referred to online games as “spiritual opium.”
These efforts to regulate the industry have affected Chinese tech companies, contributing to the United States overtaking China as the world’s largest gaming market in terms of revenue, according to research firm Newzoo.
