The Chinese government blocked Tencent from updating its existing apps and mobile games.
Temporary Administrative Guidance
The block is part of the temporary administrative guidance, according to the South China Morning Post. The country’s Ministry of Industry and Information Technology also ordered app stores to stop Tencent from rolling updates or releasing new apps.
Tencent stated that it’s cooperating with the relevant government agencies to comply with the rules. It added that all existing apps remain functional. They are also available for download.
This year, Tencent violated several data protection rules. Thus, the app approvals from this tech company are suspended. The Ministry of Industry and Information Technology will review new apps and updates before they are released. The review can take seven days.
Rules on Tech Sector
China is tightening its rules on domestic tech companies over the past year. For many years, the tech sector in this nation has been hampered by regulation. China has also passed several regulations this year and one of them is the personal data protection law.
The country’s regulators focus on how companies collect and process data. The move against Tencent is just part of the process.
The latest move is a huge blow for the said tech company which felt the effect of a regulatory crackdown in China. In August, regulators launched rules that prohibited children under 18 years old to three hours of online video games per week. Tencent said that only a small portion of its revenue comes from the said age group.
In recent months, there’s been no day without news of a crackdown on one part of the country’s economy. The slew of new regulations and strict enforcement of rules is part of President Xi Jinping’s policy initiative, which is also known as common prosperity.
However, this initiative isn’t new in China. It has been around since the 1950s. Mao Zedong, the founding leader of the People’s Republic of China first used it.
The country’s attempts to narrow the wealth gap between China’s richest and poorest citizens are the key to the common prosperity policies. Some experts argue that the policies endanger the rise of China’s economy while it poses threat to the CCP.
The new rules are considered by many as a way to control the billionaire owners of the country’s biggest companies, instead of giving workers or customers a voice on how firms operate or distribute their earnings.
Tencent isn’t the only company that has been impacted by the local rules. The rhetoric affected an array of Chinese business interests. Every company in the country is under intense scrutiny, even those companies that plan to sell shares in the US.
But the tech industry is mostly affected. Online finance services, gaming companies, and cryptocurrency miners and exchanges have experienced the effects of the crackdown.
The effects of the new rules are also being felt around the world. China is known as the factory of the world. With the regulation, companies from overseas find it difficult to make decisions about investing in the nation.
