China wants to fight intellectual opium

China wants to fight “intellectual opium”

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The Chinese Communist Party has been taking action against the power of the tech companies for months, and now the authorities have taken on the computer game industry – with consequences for company share prices.

In China these days it is once again becoming clear who is in charge of the economy – and expressly also in the private sector: It is the communist state and party leadership. A state business newspaper yesterday described computer and smartphone games as, literally, “intellectual opium”. Excessive computer games are harmful to children’s development, the article says. Experts were cited who called for stricter regulation of the Chinese computer game industry. Even if the online article was revised and defused after just a few hours: The message from the state business newspaper did not fail to have an impact. The stock market prices of companies that earn their money with gaming collapsed.

Just one hour of gaming a day

First and foremost, the course from Tencent: The paper of the largest computer games and social media group in the People’s Republic temporarily lost more than ten percent. Tencent announced new rules within a few hours: anyone under 18 can only gamble for one hour per working day, and two hours a day on weekends. This is technically relatively easy to implement in China because everyone who uses smartphone games has to log in with their ID card data. Today, Tencent shares bounced back a little in trading on the Hong Kong Stock Exchange. The trend is clear, however: China’s state and party leadership is interfering more clearly in the business of private companies than it has been in decades. Kenny Wen, an analyst at the investment firm Everbright Sun Hung Kai, spoke on the Australian broadcaster ABC of “great uncertainty” for investors in the industries concerned.

 

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Amy Michaels

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