Crackdown Streak
Last week the Chinese government continued its crackdown on private companies. They specifically conducted a regulatory crackdown that targeted tutoring and education companies with companies like TAL Education, Gaotu Techedu, and others dropping over 50%. The move was one in good spirits though and helpful for students as the government banned tutoring on holidays and weekends to lessen the burden of work on students. However, the government is once again interfering in matters related to public activity – and this time in the virtual world of video games. China has gone after one of the largest gaming companies in the world, Tencent. Tencent was bashed by Chinese state media who described the company as the “spiritual opium” of games. This media attack’s main point was that kids were spending way too many hours playing video games. The article specifically cited accounts from a first-hand witness, a schoolboy, who said some of his schoolmates played Tencent’s Honor of Kings eight hours a day.
In response to this blistering piece, the company was forced to place some regulations on screen time for minors. For one, Tencent has pledged to limit play time for minors to a mere one hour during weekdays and no more than two hours during holidays. On top of this Tencent has restricted in-app purchases, barring anyone below the age of 12 from making them. The company even went as far to suggest the possibility of the industry banning those under 12 from games altogether. China seems to be going after private companies for reasons beyond monopolization, but as a tool to control social factors key to the economy and future of the country. What do you think about China’s crackdown on students and the youth through private companies? And should they have this power?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.
