Chinese regulators on Tuesday appeared to back away from a plan to reduce spending on online video games after the proposal sent shares of video game companies soaring and raised doubts about the government's commitment to revitalizing China's slowing economy.
The draft rule disappeared from the website of the National Press and Publication Administration, the agency overseeing the proposal, after it was previously posted there for public comment. Instead, the page displayed an error.
The agency, which licenses games publishers and regulates the industry, has not issued a revocation notice. An employee who answered the call said she was unclear about the circumstances of the move.
Even without confirmation that the proposal had failed, share prices of China's two biggest video game companies jumped on Tuesday, with Tencent rising 3.7 percent and Netease rising 6 percent, more than the overall market.
The sweeping draft rules, first announced late last month, would have imposed spending limits on video game platforms and banned minors from tipping video game live streamers, a popular way for fans to support their favorite online influencers. They would also have banned companies from offering rewards for frequent logins and broadly banned content that could endanger national security.
The aim is to protect minors and improve regulation of the gambling industry, authorities said.
The plan came as a surprise to the industry, and investors poured tens of billions of dollars into stocks of Chinese gaming companies.
The selloff came as the government sought to win back domestic and foreign investors amid a stagnant economy and widespread fears that Beijing was more concerned with tightening control over the economy and daily life than growth to promote.
Many investors are still uneasy about the abrupt crackdown on China's tech industry in 2021 that helped wipe out trillions of dollars in value from some of China's best-known private companies, as well as the country's three years of strict coronavirus restrictions.
Gaming in particular has been a target of attacks before, with previous rules aimed at barring children and teenagers from online gaming on school days and limiting screen time on other days.
A few days after the stock market crashed last month, government officials appeared to be thinking about it. The Press and Publishing Administration said in a statement that it wanted to promote the “healthy development” of the gaming industry and “listen to more opinions more comprehensively.”
The public comment period on the proposed rules ended Monday. However, many other draft regulations remain online even after their public comment period ends.
Beijing's relationship with its gambling industry has been strained 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 could 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 courses on the subject.
When the eastern city of Hangzhou hosted the Asian Games last year, esports was a medal event for the first time. China won the most gold medals.
Joy Dong contributed to the research.