Hello and welcome to ‘s China Roundup, a digest of recent events shaping the Chinese tech landscape and what they mean for the rest of the world.
This week, the gaming industry again became the target of Beijing, which imposed arguably the world’s strictest limits on underage players. China’s tech titans, on the other hand, are hastily responding to Beijing’s call to take on more social responsibilities and take a break from autocratic expansion.
China dropped a bomb on the young players of the country. Beginning September 1, users under the age of 18 are limited to only one hour of online gaming time: between 8-9 p.m. on Fridays, Saturdays and Sundays
The strict rule adds to the already strict gaming policies for minors, as the government blames video games for causing myopia as well as impairing mental and physical health. Remember that China recently announced restrictions on after-school teaching? The joke goes that working parents will have an even harder time keeping their kids busy.
Some aspects of the new regulation are worth unpacking. For one, the new rule was instituted by the National Press and Publishing Administration (NPPA), the regulatory body that approves gaming titles in China, and in 2019 halted the approval process for nine months, which led Tencent such as Gaming stocks fell.
It is curious that the instruction on playtime came from the NPPA, which reviews gaming content and issues publishing licenses. Like other industries in China, video games are subject to the regulations of several authorities: NPPA; China’s Cyberspace Administration (CAC), the country’s top Internet watchdog; and the Ministry of Industry and Information Technology, which oversees the country’s industrial standards and telecommunications infrastructure.
As analysts have long observed, the powerful CAC, which sits under the Central Cyberspace Affairs Commission headed by President Xi Jinping, has gone into a “bureaucratic conflict” with other ministries unwilling to give up power. . It could be a case of regulating the lucrative gaming industry.
For Tencent and other major gaming companies, the impact of the new rule on their balance sheets could be minor. Following the news, several listed Chinese gaming firms, including NetEase and 37Games, were quick to announce that underage players made up less than 1% of their gaming revenue.
Tencent looked at the change in its second-quarter earnings and revealed that “children under the age of 16 accounted for only 2.6% of China-based gross receipts for games and just 0.3 for children under 12.” % was accounted for.”
These numbers may not reflect reality, as minors have long found ways to get around gaming restrictions, such as using an adult’s ID for user registration (just as previous generations did by asking adult friends over the Internet). Borrowed ID to enter the cafe). Tencent and other gaming firms have vowed to wean off these workarounds, forcing kids to look for even more sophisticated tricks, including Using a VPN to Access Foreign Versions of Gaming Titles. The mouse and cat game continues.
While China has curtailed the power of its tech giants, it has pressured them to take on greater social responsibilities, including respecting the rights of workers in the gig economy.
Last week, China’s Supreme People’s Court declared the “996” schedule, which operates six days a week from 9 a.m. to 9 p.m., illegal. The announcement followed years of activist resistance against the tech industry’s burnout culture, which has manifested in actions such as the GitHub Project listing companies practicing “996”.
Meanwhile, diligent and obedient employees are often cited as the competitive advantage of China’s tech industry. That’s why some Silicon Valley companies, especially those run by people familiar with China, often set up branches in the country to tap their pool of tech talent.
The days when hard work is glorified and tolerated seem to be coming to an end. ByteDance and its short video rival KuaiShou both recently ended their weekend overtime policies.
Similarly, Meituan announced that it will introduce mandatory break times for its food delivery riders. The on-demand services giant has been slammed for “inhumane” algorithms that force riders into brutal hours or dangerous driving.
In unprecedented moves, ride-hailing giant Didi and Alibaba’s e-commerce rival JD.com have set up unions for their employees, though it’s still unclear what tangible impact the organizations will have on protecting workers’ rights .
Tencent and Alibaba have also worked. On August 17, President Xi Jinping delivered a speech calling for “shared prosperity”, which attracted widespread attention from the country’s ultra-rich.
“As China moves towards its second century goal, the focus should be on promoting the well-being of the people so as to promote common prosperity in order to strengthen the foundation of the party’s long-term rule.”
This week, both Tencent and Alibaba pledged to invest 100 billion yuan ($15.5 billion) in support of “shared prosperity.” Their fund’s objectives are similar and neatly align with Beijing’s national development goals, from developing the rural economy to improving the health system.