Shares of tech companies in China decreased after the nation's cyber regulatory body advised restricting smartphone utilization by youth below the age of eighteen.
On Wednesday, stocks of firms such as Alibaba and Bilibili, a video-sharing website, declined and continued to decline on Thursday morning.
Under the proposed law, the maximum amount of time that children can spend on their phones daily would be two hours.
Four years ago, children in the second-largest economy globally were set limits on video games.
The Chinese Cyberspace Administration (CAC) has proposed regulations forbidding children from using mobile internet from 10 PM to 6 AM.
The CAC's proposal necessitates that industry stakeholders such as mobile phone device manufacturers, applications, and app stores create a feature called "minor mode" which would establish usage boundary lines depending on age.
Kids from 16 to 18 years old can utilize up to two hours of screen time each day, whereas younger than 8 years old are only given up to 8 minutes.
Comments related to the proposal are currently being solicited from the public.
The responsibility of enforcing the rules is likely to be imposed upon technology giants, similar to the manner in which gaming restrictions were handled, according to Ray Wang, founder and CEO of Constellation Research in Silicon Valley, in an interview with the BBC.
Mr. Wang stated that while workarounds exist where children can obtain the passwords to their parents' technology, the overall opinion is that gaming restrictions have been efficiently executed.
Alibaba stocks ended the day 3% down on Wednesday in Hong Kong, while Bilibili shares plummeted almost 7% in the region.
By noon on Thursday, Alibaba was around 2% lower in comparison to the previous trading session whereas Bilibili declined a smaller amount, 0.5%.
Tencent, a technology giant, closed around 3% lower, but its shares in Hong Kong were up 0.1%.
China has implemented various steps to restrain video game addiction, which government authorities claim is detrimental to youngsters' well-being.
In November of 2019, a curfew was established on online gaming for those under the age of 18.
Gamers under 18 were not allowed to play online between the hours of 10:00 PM and 8:00 AM. They were limited to an hour and a half of online gaming during the weekdays and three hours on Saturdays and Sundays.
After around 24 months, officials forbade kids from playing video games for over 3 hours weekly.
A state media outlet labeled online games as "spiritual opium".
The measures taken have had a negative effect on Chinese tech organizations. Due to the stricter control of the sector, the US has become the foremost gaming market in terms of revenue, as stated by market research firm Newzoo.
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