China appears to be backing away from its video game crackdown
Chinese regulators appeared to backtrack Tuesday on a plan to reduce the amount of money people spend on online video games, after the proposal sent video game company shares tumbling and raised doubts about the government's commitment to China's slowing economy to breathe new life into.
The draft rules disappeared from the website of the National Press and Publication Administration, the agency overseeing the proposal, after previously being posted there for public comment. Instead, the page displayed an error.
The agency, which licenses game publishers and regulates the industry, has not issued a withdrawal notice. An employee who answered the phone said she was unclear about the circumstances surrounding the move.
Even without confirmation that the proposal had been rejected, share prices of China's two largest video game companies rose on Tuesday, with Tencent rising 3.7 percent and NetEase rising 6 percent, more than the overall market.
The expanded draft rules, first announced late last month, would have imposed spending limits on the video game platforms and banned minors from tipping video game livestreams, a popular way for fans to support their favorite online influencers. They would also have banned companies from offering rewards for frequent logins, and introduced a broad ban on any content that could endanger national security.
Authorities said the aim was to protect minors and improve regulation of the gambling industry.
The plan came as a surprise to the industry and investors dumped tens of billions of dollars of stock into Chinese gaming companies.
The sell-off came just as the government is trying to win back domestic and foreign investors amid a sluggish economy and widespread concerns that Beijing is more concerned with tightening control over the economy and daily life than with promoting growth.
Many investors are still spooked by the abrupt 2021 crackdown on China's tech industry, which helped wipe out trillions of dollars in value from some of China's best-known private companies, and by the country's three-year strict coronavirus restrictions.
Gaming in particular has also been a target before, with previous rules aimed at banning children and teenagers from online gaming on school days and limiting their screen time on other days.
Within days of the stock market's collapse last month, government officials appeared to be rethinking all their considerations. The Press and Publishing Administration issued a statement saying they wanted to promote the “healthy development” of the gaming industry and were “comprehensively listening to more opinions.”
The public comment period on the proposed rules ended Monday. But many other draft regulations remain online even after the public comment period.
Beijing's relationship with the gaming industry has been fraught for years. China's ruling Communist Party has repeatedly raised concerns about online gaming addiction, with state media likening a popular game to “poison” that can corrupt teenagers and distract soldiers from their duties. Many parents have also expressed support for stricter curbs.
But Chinese tech companies like Tencent are also cornerstones of the global gaming industry, with the number of Chinese gamers – and the money they spend – leading the world, according to Goldman Sachs. The country has embraced competitive gaming, building esports stadiums and offering college majors in the subject.
When the eastern city of Hangzhou hosted the Asia Games last year, esports was a medal event for the first time. China won the highest number of gold medals.
Joy Dong contributed research from Hong Kong