China Tech Stocks Fall on Child Smartphone Limits
Chinese technology shares faced a decline following a recommendation from the country's cyberspace regulator to impose restrictions on smartphone usage for children under the age of 18.
Notable companies like Alibaba and the video-sharing platform Bilibili witnessed a drop in their share prices on Wednesday, with the downward trend continuing into Thursday.
The suggested legislation proposes a maximum limit of two hours per day for children's smartphone usage.
This initiative comes after four years of restrictions imposed on gaming activities for children within the world's second-largest economy.
The Cyberspace Administration of China (CAC) is behind the proposed regulations, which would also prohibit children from accessing the internet on mobile devices between 10:00 PM and 6:00 AM local time.
To facilitate these restrictions, the CAC's proposal mandates various industry players, including mobile phone manufacturers, apps, and app stores, to introduce a “minor mode” feature that enables setting usage limits based on different age groups.
The proposed screen time limits vary according to age: teenagers between 16 and 18 years old are allocated two hours, while children under eight years old are limited to eight minutes of screen time per day. The proposal is currently open for public input and feedback.
Enforcement of these rules is expected to fall upon technology giants, similar to the approach taken with gaming restrictions. Despite potential workarounds, such as children gaining access to their parents' devices, the consensus is that previous gaming restrictions have been largely successful.
Alibaba's stock closed more than 3% lower in Hong Kong on Wednesday, while Bilibili experienced a nearly 7% decrease.
By midday on Thursday, Alibaba's stock was trading around 2% lower, and Bilibili had declined by 0.5%.
Interestingly, shares of Tencent, a major technology company, closed around 3% lower but saw a 0.1% increase in Hong Kong.
In response to concerns about children's health, China has introduced various measures to combat video game addiction.
In November 2019, a curfew was placed on online gaming for minors, prohibiting gaming between 10:00 PM and 8:00 AM. Additionally, minors were restricted to 90 minutes of gaming on weekdays and three hours on weekends and holidays.
Subsequently, children were prohibited from gaming for more than three hours per week, with state media referring to online games as “spiritual opium.”
These regulatory moves have impacted Chinese technology firms and contributed to the US surpassing China as the world's largest gaming market by revenue, according to Newzoo, a research firm specializing in games and esports.
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