China started its restrictions on the tech sector again, this time limiting use of personal cellphones to minor citizens.
Continuing its curb on technological corporations, China has enacted a new law restricting mobile phone use for minors. On their Wednesday opening, Chinese tech stocks plummeted following the announcement.
Specifically, the new measures forbid the use of mobile phones from 22 pm to 6 am for minors. China’s adult age is 18 years old. Moreover, children up to 8 years old cannot use a mobile phone for more than 40 minutes per day, while teenagers aged 16 and 17 are limited to 2 hours of daily use.
These laws will be implemented starting from September 2nd and only limit internet-connected activities.
Tech stocks plummeted on Chinese stock exchanges on Wednesday morning. Specifically:
- Search engine Baidu has dropped -3,75%;
- E-commerce giants Jd.com, Meituan, and Alibaba slid by -3,48%; -3,30%, and -2,76%;
- Videogame giant Tencent has dropped -2,99%.
The two Chinese stock indexes overall close in the red, with Shanghai and Hong Kong losing -0,89% and -2,47%. Both had seen a good start to the week as the American Federal Reserve signaled a halt in interest rate hikes from September.
China’s tech crackdown
This move is only the last of a three-year-long crackdown on technological companies, which seemed to have cooled down in 2023.
China’s first "victim" was the tech giant Alibaba, formerly the largest Asian corporation. In 2010, Alibaba was worth more than Amazon and eBay put together. But Alibaba’s former CEO, Jack Ma, harshly criticized China’s increasingly restrictive framework, and Beijing could not simply let it slide.
In late 2020, with a series of impositions and fines, Alibaba was forced to pay $2,8 billion to the Chinese government. Similarly, Meituan fell also victim to these restrictions, paying a $530 million fine.
Later, Alibaba was deemed "too big" by the Chinese government. In 2021, Alibaba was forced to let go of many strategic assets. Jack Ma, obviously vocally opposed to these measures, mysteriously disappeared for a month. When he reappeared in public, Ma gradually abandoned all his positions in the company, eventually fleeing abroad.
After traveling the world for two years, Jack Ma reportedly settled in Japan as a university teacher of agricultural technologies.
But China’s government was not done with the technology sector, limiting video game use to children and minors. Beijing also banned cryptocurrency mining and transactions.
From the second half of 2022, however, it seemed China started relaxing these measures. Government policies started appearing, fostering healthy growth and a sustainable environment for tech companies.
With today’s measures, however, it seems China has started its crackdown again. Beijing’s effort to control and impose restrictions on the tech sector has not stopped, if it ever will.
