Bilibili (HKG: 9626) (NASDAQ: BILI) shares are up 6% in Hong Kong today. BILI stock has been under some pressure in the past couple of days as China mulls over - having published draft rules that is - limiting the amount of time children can be on their smartphones, be on social media and the internet. Obviously, there’s the possibility that this would reduce the traffic and advertising possibilities of the internet companies in China, Therefore there’s been that pressure on share prices.
The specific proposal: “The Cyberspace Administration of China (CAC) has drafted guidelines for preventing minors from spending too much time on their smartphones, dealing a potential blow to social media providers.” and “Those under the age of 8 will be limited to use internet up to 40 minutes per day; no more than 1 hour for those between 8 to under 16 years of age; and a default total use time of no more than 2 hours for those between 16 to under 18 years of age. The draft provides parents with exemption operations.”
There are more than a few get outs there. For example, any source, platform or app that the parents exempt from the limits is, well, it’s exempted from the limits. Which means that child poster power comes into play over how much limitation there will actually be. You can see the planning bureaucrats coming into conflict with how humans actually work here.
Bilibili share price from Google Finance
A useful assumption is that the market has digested those proposed internet restrictions and decided that they’re not going to matter very much. Markets usually having a rather better idea of how actual humans are going to react than central bureaucrats do. Some will move to having multiple terminals, as the limit won’t apply to the individual but to the device. That pester power will mean that parents acquiesce on certain sites being approved. It’s even possible to point out that children don’t have all that much money so the restrictions on advertising to them aren’t going to make all that much difference.
But our read on this is simply that no, the markets didn’t like the announcement of restrictions but are now OK about it - on the grounds that they’re not going to change very much. People do react to not being allowed to do what they want after all. And what they want to do does generally win out.