China Roundup: Games are Opium, Algorithms Need Scrutiny

China Roundup: Games are Opium, Algorithms Need Scrutiny

Hello and welcome to the China Roundup of TechCrunch, the latest events that shape the Chinese tech landscape and what they mean to people around the world. Nowadays, the question for technology news circles in China is: Who is Beijing’s next target? Regulatory clampdowns are common in China’s technology industry, but the expansion of recent measures is unprecedented.

No major technology giants have been spared and everyone is being attacked from a slightly different angle, but Beijing’s message is clear: tech businesses need to align themselves with Beijing’s interests and objectives. Government motivation is not always ideological. This could lead to policies that will curb the private tutoring sector in the hope of reducing the pressure on students and parents. Beijing’s recent orders have severely curtailed post-school education, although they have sparked a wave of sympathy for public school teachers who work in profitable tutoring centers to compensate them for their meager salaries.

China Roundup: Games are Opium, Algorithms Need Scrutiny

The impact of the education crackdown is also being felt in internet companies. Over the past few years, ByteDance has been building an online education business through partial hiring and acquisitions to diversify an ad-based video business. Its plan to lay off staff in the education department seems to have failed after the recent clampdown. Sanctions are also hurting American companies. Duolingo, a language learning app, has been removed from several app stores in China.

Although it is not immediately clear whether the move is the result of a policy change, the government recently banned foreign curricula from K-9 in schools, including a ban on additional curricula. It can be difficult to read the minds of top leaders because their messages can come through different government departments or state-affiliated media outlets, carrying different weights.

This week, Tencent is in the crosshairs of the authorities. The Economic Information Daily, an economic magazine overseen by China’s main state news agency Xinhua, removed the nearly $60 billion market cap, published an article (which was soon dropped) describing video games as “spiritual opium” and mentioned the main role. Did by acting in the Tencent industry, shares of Tencent’s small rival NetEase were also damaged.