china apps

(Photo by NOEL CELIS / AFP)

China requires new apps to get state approval

The domestic tech crackdown continues in China with new apps need and updates now needing approval by the government. The crackdown has already seen several brands like Yahoo, LinkedIn and Fortnite shut down their operations over the past month.

Months earlier, Chinese regulators ordered AntGroup to separate from its main business the company’s two lending units — Huabei and Jiebei — into a new entity and bring in outside shareholders. Officials now want these lending businesses to have their own independent apps as well.

Beijing also introduced a slew of new rules in areas from antitrust for internet platforms and a bolstered data protection law. Both e-commerce giant Alibaba and food delivery firm Meituan have faced antitrust fines.

Now, the Chinese government has moved to exert more authority over the industry in the past year, citing concerns that tech giants in the country have become too big and powerful.

This latest move against embattled Tencent comes after nine of the group’s apps were found to have committed “violations” since the beginning of the year, prompting the need for “transitional administrative guidance measures”, state media CCTV quoted the government as saying.

The company must submit any new apps or updates for inspection in China by the Ministry of Industry and Information Technology before they can be uploaded or updated.

“After passing inspection, they can then be launched to users as usual,” the ministry said, according to CCTV in a report Wednesday.

A man plays a computer game at an internet cafe in Beijing on September 10, 2021, days after Chinese officials summoned gaming enterprises including Tencent and NetEase, the two market leaders in China’s multi-billion-dollar gaming scene, to discuss further curbs on the industry. (Photo by GREG BAKER / AFP)

Tencent told AFP it would comply with the requirements.

“We are continuously working to enhance user protection features within our apps, and also have regular co-operation with relevant government agencies to ensure regulatory compliance. Our apps remain functional and available for download,” it said.

China’s ruling Communist Party has relied upon success stories like Tencent to push forward a digital transformation in the country, and the biggest domestic apps have hundreds of millions of users.

But Beijing abruptly turned on the sector late last year as concerns mounted over its aggressive expansion and allegations of monopolistic practices and data abuses –- paralleling similar unease with tech firms in the United States and elsewhere.

This month, Tencent reported its slowest revenue growth since 2004.

The government’s crackdown has included measures to dramatically restrict children’s video game playing time and has slowed approvals for new titles in the world’s biggest gaming market.

In September, hundreds of Chinese video game makers, including Tencent, vowed to better police their products for “politically harmful” content and enforce curbs on underage players, as they looked to fall into line with government demands.

GFM Asset Management’s Tariq Dennison told CNBC reported that Beijing’s ongoing regulatory crackdown on technology could last up to 30 years. However, Tariq believes this wont still stop investors from investing in Chinese technology.

With new apps in China requiring approval, the reality is, the crackdown may just slow down innovation in the country. China still has sufficient tech skills but they may not be able to attract new skills if continued crackdown on technology continues.