China's Crackdown on After-school Tutoring and Gaming Provides New Opportunities to Monetize Kids' Free Time

The after-school hours of underaged children in China are going through a revolution in recent days. Almost in a targeted sequence, the Chinese government killed off for-profit after-school tutoring, limited the number of hours for gaming to one per day, and if that is not enough, reemphasized that children are not supposed to go through private tutors giving lessons in private homes. For tens of millions of kids who have heretofore been occupying their hours after school with homework, cram schools, and video games, their nights have just become much freer, to a degree that probably worries their parents. 

The Chinese government is not just banning certain after-school activities, but also channeling what "types" of activities are permissible even among those that are still allowed. Children are still allowed to watch TV without any restrictions, but the government has put out notices on what values TV shows are not supposed to instill in their viewers. Gone are talent shows that glorify men who are not masculine and do not uphold patriotic or vaguely defined "correct" moral and social values. Entertainers who lead decadent private lives from being paid too much and/or evading taxes are now off the air.

Indeed, the series of new regulations are almost designed to reshape the very sense of right and wrong among both children and adults. Even when kids turn off TVs and get on social media, they will not be able to partake in "excessive" behaviors extolling the greatness of certain artists and musicians. The organizing power of some fan clubs has drawn the ire of the authorities. As social media services become calmer, cleaner, and less passionate (thanks to the hard work of government censors keen to take down anything remotely problematic from the policy perspective), there will surely be many bored kids.

Yet, as Chinese kids suffer in newfound boredom, there will surely be shrewd businessmen keen to sell time-killers that please the kids, their parents, and an overweening Chinese government. Those that can come up with new ideas that are educational without restricting delivering classroom teaching, entertaining without resorting to moral dilemmas, and espousing "socialist cultural values" without being overtly propagandistic will surely win hordes of parents willing to part with their cash and political support from both the local and national government.

Of course, this is easier said than done. Companies that attempt to monetize kids' after-school hours will be facing a regulatory environment that is fraught with yet-unforeseen uncertainties. As the government comes up with slogans such as "common prosperity" to limit the influence and power of big business, it will be difficult for businessmen to simply go and ask their political contacts what are now fair game for them to make more money on. And even if they had the courage to ask, it is very much possible that their political contacts also have no idea what are the next steps in terms of these "cultural reforms."

And if some businessman is brilliant enough to come up with a "Goldilocks" idea of after-school entertainment that is politically correct and profitable, s/he will likely find a hard time recruiting workers to put the idea into sellable products. After all, it is conceivable that part of the purpose of putting down tutors and gamers is for the Chinese government to suppress the burgeoning services industry so that the best workers the country has naturally flow toward high-tech industries, whether they are electric vehicles, semiconductors, or next-generation batteries and telecommunications equipment.

But the moves to free up the kids' after-school hours may benefit the services sector anyways. There are only so many kids who will tinker with industrial gadgets in their free time. Most may find themselves using other sorts of services, whether they'd playing sports, going shopping, eating out in restaurants, or taking small trips around where they live. As online lives become boring and classroom time curtailed, the physical world of shops, restaurants, gyms, and sports arenas maybe finding a bigger and bigger audience among the younger crowd.

Perhaps, without knowing so, the Chinese government has hit upon a way to boost the country's perennially underperforming consumption segment of the economy. As governments speak of redistributing more wealth as wages and cracking down on a culture of excess overtime, parents will have more time to hang out with their kids and spend money. More parents, the government hopes, will choose to have more kids, giving a further boost to consumption. Perhaps, to find the best new ideas to monetize kids' free time is to look toward the old ones, found much before the Internet and TV became dominant.