Chinese technology stocks were falling on Wednesday. Proposed new rules on smartphone usage by minors could puncture hopes of easing regulation on the sector.
The Cyberspace Administration of China published a draft set of rules for smartphones that would limit daily internet use by minors, in a post seen by Barron’s and translated using online tools.
The rules would limit smartphone internet use to a maximum daily limit of one hour for children between the age of eight and 16, and two hours for those aged 16 to 18. It would also prohibit the use of smartphones by minors from 10 p.m. to 6 a.m. Educational and parent-approved applications would be exempt from the restrictions.
Chinese internet stocks dropped on Wednesday amid a broader market decline. American depositary receipts of videogame company
NetEase
(ticker: NTES) were down 2.7% in premarket trading Wednesday, while search company
Baidu
(BIDU) was down 2.6% and
Alibaba
(BABA) fell 2.6%.
Efforts to control internet use by young people aren’t new in China. Videogame stocks were hit in 2021 when new rules were introduced to restrict the time young people play online games.
However, there were hopes that Chinese technology companies would enjoy a looser regulatory regime as Beijing looks to the sector as a growth engine while its economy struggles. The latest proposed restrictions suggest investors shouldn’t get too excited.
Write to Adam Clark at [email protected]
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