The rules, released by the Cyberspace Administration of China last week, also call on schools to work with “institutions” to help rehabilitate young internet addicts, raising concerns about the risks to children at “boot camp” treatment centres.
If the regulations come into force, web game developers would have to block minors from playing online games from midnight to 8 am, Hong Kong-based South China Morning Post reported.
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The games should be designed to deter young people from becoming addicted and software developed to detect under-age users.
The draft rules are open to public feedback until the end of the month, the report said.
The regulations are the latest official effort to stop young people from spending too much time on online games.
Last month a 16-year-old girl from northern China killed her mother because she was angered by the harsh treatment she received when she was sent to an internet addiction treatment centre. The girl said she had been beaten and ill-treated at the "boot camp" in Shandong province where she spent four months earlier this year.
According to the China Internet Network Information Centre, 23 per cent of China's internet users were aged below 19, as of June 2016, with the total number of internet users stated to be 750 million.
Military-style “boot camps” promoting themselves as treatment centres for internet addiction have flourished in China. Some reportedly use extreme methods such as electric shocks and other physical punishment to wean clients off online games.
Lawyer Wang Qiushi said he feared the regulations would lead to more of the boot camps.
"This is a disaster for Chinese teenagers," Wang said.
"More such boot camps might emerge after the passage of this regulation. It will encourage more people to get into the 'business'," Yue Xiaodong, a City University of Hong Kong psychologist who has studied internet addiction in China, said the problem used to be a serious social issue but was waning.
Now the smartphone is replacing computers as the new cause of addiction.
If the 'no gaming after midnight' rule comes into effect, it might affect the industry, Su Jun, a Shanghai-based senior web game developer, said the proposed regulations could make a slight dent in gaming companies' revenue.
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