China Hauls in Tech Giants Over Underage Gaming Rules, Shares Tumble

China’s propaganda ministry and media regulators on Thursday hauled in representatives of Tencent, NetEase, and other technology giants, ordering them to fully implement recent restrictions on online gaming for underage players.

The meetings sparked sharp falls in technology share prices. The Hang Seng index fell by 2.3 percent at Thursday’s close to 25,716.00, the biggest one-day percentage drop since July 27, while the China Enterprises Index lost 2.8 percent.

The heads of the ruling Chinese Communist Party (CCP)’s central propaganda department and the General Administration of Press and Publications (GAPP) told the companies they would be expected to comply fully with a slew of recent regulations on the technology sector, including the minor gaming ban during weekdays and restrictions on “obscenity,” “gore,” “terror,” “feminized men,” and “overblown aesthetics” in game content.

“All gaming companies have to strictly enforce the orders of the notice and thoroughly implement the play-time restrictions on minors when they are providing online games to them,” the departments said in a statement carried by state news agency Xinhua.

“Obscene and violent content and those breeding unhealthy tendencies, such as money-worship and effeminacy, should be removed,” it said.

Meanwhile, Reuters reported that China has temporarily suspended approval for all new online games, in a decision revealed at a meeting with Tencent and NetEase.

Tencent declined to comment. NetEase did not immediately respond to Reuters’ request for comment, the agency reported.

The government banned under-18s in August from playing more than three hours’ of online video games in any week, limiting their sessions to Fridays, weekends, and vacation days, in a bid to fight back against gaming addiction, which the CCP views as “spiritual opium.”

Current affairs commentator Bi Xin said it was unprecedented for the CCP’s central propaganda department to get involved in the content of video games.

“Any department in China can call in any company for a meeting, but the levels of seniority are getting higher and higher,” Bi said. “The fact that the central propaganda department did this means it’s a matter of ideology.”

Asserting full control

A scholar from the northern Chinese city of Taiyuan surnamed Ren said the CCP won’t stop at gaming, but will eventually assert full control over all sectors of the economy.

“They have already started the rectification of various sectors with these meetings, which is to say that they are tightening [government] control of every industry,” Ren said.

“Ride-sharing apps are one example; the government has rectified them to strengthen control and place restrictions on market participants,” he said.

Online gamer Song Shiwen said the gaming restrictions will also likely be enforced by government officials at grassroots level, in a reference to residential community committees and neighborhood committees across China.

“Once the central government has made an order like that, it doesn’t necessarily have to follow up with policies or crackdowns … it means departments lower down [the hierarchy] have to do it,” Song said.

“That means governments in every city and province will have to step up enforcement.”

Chinese regulators have ordered several tech giants to “rectify” their business models amid an ongoing crackdown on the private technology sector.

Officials from the Ministry of Transport, the Cyberspace Administration of China, and the State Administration of Market Supervision, met with managers from ride-sharing app Didi Chuxing, the food delivery app Meituan, and nine other transportation and travel firms on Sept. 1 and ordered them to clean up their act.

They were warned not to use “vicious” competition or disorderly expansion or to pass on operation risks to gig-economy workers like drivers.

Crackdown on private companies

The moves come amid an ongoing crackdown on large, privately owned technology companies, and as ruling Chinese Communist Party (CCP) general secretary Xi Jinping starts to implement measures aimed at achieving “common prosperity,” or moderate wealth for all.

There are also growing indicators that the government is also moving towards nationalization of user data and services.

A new data security law that took effect on Sept. 1 lays down strict regulations about what technology platforms must do with data entrusted to service providers by hundreds of millions of users.

Meanwhile, a personal information protection law aimed at setting controls on companies’ use of user data will likely take effect in November 2021.

The State Administration of Market Regulation (SAMR) said on Aug. 30 that it would regulate the sharing economy, a sector that includes companies facilitating ride-sharing, bike-sharing, home sharing, and even the pooling of battery packs for phones.

And the CCP is pushing tech giants to invest in a state-owned “cloud” storage platform, in a direct, and nationalized, challenge to tech giants Alibaba, Huawei, and Tencent.

Companies owned by the Tianjin municipal government have been ordered to migrate their data away from commercial cloud service providers to the state-owned alternative, Reuters reported recently.

At the same time, the government is tightening supervision of algorithms used to send tailor-made data, content, and advertising to users, banning algorithms that are designed to make users spend large amounts of money, or “disrupt public order.”

Translated and edited by Luisetta Mudie.

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