Shares of tech firms tumble as China mulls child smartphone limits

Shares of Chinese tech firms went down after China’s cyberspace watchdog suggested limiting smartphone usage of children under 18, reported BBC.

The UK based media outlet reported that shares of companies such as Alibaba and video-sharing site Bilibili began the drop from Wednesday and it continued through till Thursday.

Shares of Alibaba declined over 3% in Hong Kong on Wednesday. While Bilibili’s shares tumbled by close to 7%.

By mid-day on Thursday, Alibaba was trading around 2% lower while Bilibili was down by 0.5%.

However, BBC reported that shares of Tencent, which closed around 3% lower, were 0.1% higher in Hong Kong.

A day earlier, Chinese authorities decided to deal with the excessive use of smartphones and internet addiction among children and teenagers.

Under the expected regulations, those below the age of 18 will have limited access to the internet and their smartphones from 10pm to 6am from September 2 this year.

The authorities will implement a tiered system to manage mobile usage time, with 40 minutes per day as the maximum for children, while those aged 16 and 17 years will be allowed usage for up to two hours.

Proposed by the Cyberspace Administration of China (CAC), the new rules are among the strictest in the world, as they aim to control and regulate the exposure of young people to smartphones as well as the internet during certain hours.

Parents, however, will be able to bypass them if they wish.

The CAC said the rules would "improve the positive role of the internet, create a favourable network environment, prevent and intervene in minors' internet addiction problems, and guide minors to form good internet use habits".

The measures would build upon existing efforts to strengthen the online protection of minors, it added, including by "enriching age-appropriate content" and reducing "the influence of bad information".

Beijing authorities have pursued expansive regulation of the domestic tech sector in recent years, due in part to concerns over the risk posed to young people by digital technology.

In 2021, China capped the amount of gaming time for children with the stated aim of fighting addiction, and froze approvals of new games for nine months, hammering the bottom lines of many companies including sector titan Tencent.