China’s government has just launched the latest salvo against its own technology industry:
China on Monday issued strict new measures aimed at curbing what authorities describe as youth videogame addiction, which they blame for a host of societal ills, including distracting young people from school and family responsibilities.
The new regulation, unveiled by the National Press and Publication Administration, will ban minors, defined as those under 18 years of age, from playing online videogames entirely between Monday and Thursday. On the other three days of the week, and on public holidays, they will be only permitted to play between 8 p.m. and 9 p.m.
This is likely to have a substantial effect on major Chinese tech companies like Tencent and NetEase, leaders in videogames. The new regulation is the latest development in a crackdown on companies in ride sharing, food delivery, educational tech, and more.
I see two major issues with this crackdown:
If you can have your business regulated out of existence at any time, you might not start one. And if you do, it will be a lot harder to attract investors.
Tech companies rely on venture capital to grow. That funding is already beginning to dry up. No wonder the number of Chinese companies reaching $1 billion valuation (“unicorns”) is falling off a cliff:
I invest in American startups regularly. There is zero possibility I’d invest in a Chinese one. The odds of the government one day deciding your industry is bad for “social stability” are just too high.
Without capital, Chinese tech companies will wither.
Imagine the U.S. government telling you, “Sorry Timmy, you can only play video games from 8 to 9pm on weekends. Oh, 7 is better for you? Well too bad.”
In the context of a free society, this is unthinkable. In China, the government is taking on the role of a parent. It’s another step to totalitarianism, where the government controls all aspects of life.
And China’s crackdown goes way beyond tech:
Zhao Wei, one of China’s most prominent actresses, saw her presence mostly scrubbed from the country’s internet overnight. Her fan page on Weibo, China’s heavily censored version of Twitter, was shut down. Movies and television shows she starred in — some going as far back as two decades ago — were taken off streaming platforms, with her name also removed from the cast lists.
On Chinese social media, some comments said the crackdown was reminiscent of the Cultural Revolution, a decade of political and social turmoil between 1966 and 1976 during which arts and culture were restricted to promoting party propaganda.
It was not immediately clear why Zhao was targeted.
The message from Xi Jinping is clear: he wants the people quiet and obedient. Anyone who stands out for any reason, be it an actress or a tech tycoon like Jack Ma, will be dealt with.
If you’re in China now, I urge you to emigrate. This will not end well.
More on China and tech:
If you found this post interesting, please share it on Twitter/Reddit/etc. using the buttons at the bottom of the page. This helps more people find the blog!
Photo: “Chinese Soldiers in The Forbidden City – Beijing, China” by Patrick Rodwell is licensed under CC BY-NC-ND 2.0
Save Money on Stuff I Use:
You already shop on Amazon. Why not save $100?
If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.
Best of all: No fee!
This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.
If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account.
The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.
Use this link to save 5%!
My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.