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China’s proposed limits on children’s smartphone use unlikely to hurt Tencent, ByteDance, analysts say

  • The proposed regulation puts the onus on device makers and app store operators to cap screen time for minors
  • However, parental control functions already exist on many smartphones, while adults make up the bulk of video gaming and social media users

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Children look at their smartphones on a street in Beijing on Thursday. Photo: AP Photo
Tracy Quin ShanghaiandAnn Caoin Shanghai

China’s latest proposed regulation to tackle internet addiction, which aims to limit minors’ smartphone usage to no longer than two hours a day, is unlikely to deal a heavy blow to the bottom line of Chinese Big Tech companies, according to analysts.

As part of Beijing’s efforts to keep children from being glued to electronic gadgets, the Cyberspace Administration of China (CAC) earlier this week published draft rules requiring device manufacturers and app stores to provide users with the option to deploy various “minor modes”.

A smartphone in minor mode would restrict usage to 40 minutes a day for children under 8, one hour a day for those aged 8 to 15, and two hours a day for those aged 16 and 17. Additional usage would require parental intervention.

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Inside China’s battle to keep internet addiction under control

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The proposed regulation, which is open to public consultation until September 2, puts the onus on device makers and app store operators to cap screen time for minors, but the business impact would be limited, according to Zhang Dingding, internet industry commentator and former head of Beijing-based research firm Sootoo Institute.

The reason is that video gaming and social media firms such as Tencent Holdings and Douyin owner ByteDance already make most of their money from adult users, Zhang said, after China enforced some of the world’s strictest video gaming restrictions for minors.

Chinese authorities introduced rules in the summer of 2021 that only allow minors to play online games from 8pm to 9pm on Friday, Saturday and Sunday. By the first quarter of 2023, Tencent said players under 18 contributed only 0.4 per cent of total time spent on its domestic games, and 0.7 per cent of gross receipts.

Zhang Shule, an analyst at CBJ Think Tank, agreed that the impact of the new draft rules on the industry would be minimal. “The gaming industry is already heavily regulated and companies are implementing strict rules. Rules also exist to prevent over-use of short videos and online education,” Zhang said.

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