China's cyberspace regulator said children under the age of 18 should be limited to a maximum of two hours a day on their smartphones, sending shares in tech companies tumbling.

The Cyberspace Administration of China (CAC) said it wanted providers of smart devices to introduce so-called minor mode programs that would bar users under 18 from accessing the internet on mobile devices from 10 pm. to 6 am.

Providers would also have to set time limits under the proposed reforms, the CAC said. Users aged 16 to 18 would be allowed two hours a day, children aged eight to 16 would get one hour while children under eight would be allowed just eight minutes.

CAC said service providers should allow parents to opt out of the time limits for their youngsters.

Xia Hailong, a lawyer at the Shanghai Shenlun law firm, said it'll take "a lot of effort and additional costs" for internet companies to implement these new regulatory requirements.

"And the risk of non-compliance will also be very high. So I believe that many internet companies may consider directly prohibiting minors from using their services."