Weird 2010's gamer nationalism meets china bad.
"Oh no, kids won't be able to use games to escape reality now" — Good, have them play outside or read a book or something.
"Horrible, I couldn't live without games" — Yes, this law is attempting to help people before they become like you.
"New generations won't grow up to be gamers now" — How will society survive!
"It's about controlling freedom of thought" — Ah, yes, this will stop the great dialogue had by fourteen-year-olds in LoL game chats.
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Watching tv and reading for the sake of reading are a waste of time. Reading improves your writing, which is a useful skill, so even pop fiction novels usually aren't a complete waste. Not to mention anything worth reading (which is a lot of things) teaches you stuff.
Sports are similar to reading in that they are exercise, and thus even trivial time wasting ones like hacky sack are not a complete waste.
Wasting time isn't a sin or a major character flaw, but making a waste of time the main thing you do as a hobby isn't good, and is a character flaw. It becomes it's own punishment as well, I've never meet someone who had an unproductive time waste as a hobby who was happy. They get stressed from life, run to their hobby to distract themselves, and it doesn't help. It just distracts them enough to avoid having an active breakdown until they are tired enough to fall asleep.
Counterpoint: I exercised, had a productive hobby, made art, had a social network and was still completely miserable. None of those things reduced my misery.