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A emblem of Tencent is seen in the course of the World Internet Conference (WIC) in Wuzhen, Zhejiang province, China, November 23, 2020.

Aly Song | Reuters

GUANGZHOU, China — Tencent warned more regulations will probably come for the web sector in China however stated the corporate is “confident” it may be compliant.

The feedback come after the Chinese expertise big beat market expectations to submit a 29% rise in second-quarter profit, and as Beijing intensifies its regulatory scrutiny of the nation’s web firms.

“We should expect … in the near future, more regulations should be coming,” Martin Lau, president of Tencent, stated throughout an earnings name on Wednesday.

Lau stated that web regulation is a “global trend” however China is forward of Europe and the U.S. in phrases of the “execution of a more structural regulation framework.”

“I think this should be expected because the regulation has been actually quite loose over an industry like the internet, considering it’s size and the importance,” he added.

The Tencent president stated regulators are centered on “rectifying industry misbehaviors” and emphasizing social duty. But in the end the aim is “long-term sustainable development of the internet industry,” in accordance to Lau.

“The government does recognize the importance on the economic side and social side of the internet industry and also the contribution of the industry to global competitiveness,” Lau stated.

I’d say there can be short-term uncertainties and there are lots of new regulations that can be coming, however we’re fairly assured that we might be compliant.

Martin Lau

president, Tencent

Various Chinese regulators have come out with new guidelines for the web sector over the previous few months from anti-trust to data regulation. The pace and scope of the actions has wiped billions of {dollars} price of worth from China’s web firms. Tencent’s inventory is down 23% this yr.

Still, the gaming big, which has confronted regulatory scrutiny previously, stated will probably be ready to comply.

“I would say there will be short-term uncertainties and there are a lot of new regulations that will be coming, but we are pretty confident that we can be compliant,” Lau stated.

Gaming guidelines in focus

There can also be rising concern that the net gaming sector may face tighter regulations after an article appeared in an affiliate of state-media likening online games to “opium”.

For a very long time, the Chinese authorities has been frightened concerning the affect of gaming on youngsters. In 2018, regulators froze the approval of information video games over concern that they have been affecting the eyesight of youngsters.

In 2019, China launched guidelines that banned these below 18 years previous from enjoying on-line video games between 10 p.m. and eight a.m. and restricted the quantity of time they might play.

Tencent has already introduced measures to implement this, together with facial recognition to detect youngsters who’re skirting the foundations.

“On games, I think that the key issue at this point in time is still the amount of time and the amount of money that the minors spend on games. And this is an area that we are very focused on,” Lau stated.

It is a “complicated issue requiring consensus of the regulator as well as the industry” — but it surely’s one thing the corporate needs to focus on, he added.

“If that can be achieved … I think most of the criticism on the gaming industry … will be resolved,” he stated.

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