Chinese regulators retract gaming rule proposal after stock market turmoil
- The National Press and Publication Administration, which oversees the video game industry, removed the notice of the proposed regulation from its website on Tuesday
- While it is not uncommon for Chinese regulators to make amendments to published draft rules before finalising them, it is rare for one to completely drop a regulation
Chinese regulators have retracted a proposal to rein in spending on games, a reversal that comes after the original move battered stocks of the country’s video gaming champions including Tencent Holdings and NetEase.
In an unusual move, the National Press and Publication Administration (NPPA), the regulator answering to China’s propaganda department, removed the notice of the proposed regulation from its website on Tuesday. The draft rule, published in late December, was open for public feedback until January 22.
The previous link to the draft regulation showed a “404” error code on Tuesday, which means the webpage is no longer available for the public to see.
The proposal, which required video game developers to implement measures to cap user spending in games and ban “excessive” rewards, caused a bloodbath among China’s gaming stocks, wiping out at least US$80 billion of market value in Shanghai, Hong Kong and New York.
While it is not uncommon for Chinese regulators to make amendments to published draft rules before finalising them, it is rare for one to completely drop a regulation. The NPPA did not immediately respond to a request for comment on Tuesday.
The move comes as the Chinese government is trying to shore up investor confidence in its capital markets. Tencent’s share price gained 5 per cent in Hong Kong on Tuesday afternoon.
Feng Shixin, a veteran official, relinquished his role as the publication bureau chief at the Communist Party’s Central Propaganda Department, which manages the NPPA.
While it is not known whether Feng’s departure was directly related to the new gaming rule, one source told the Post at the time that it was a sign that China might walk back some of the proposed restrictions.
Chinese regulators have been vowing to create a “transparent and stable” regulatory environment for the nation’s internet companies, according to Luo Wen, head of the State Administration for Market Regulation, who made the remarks last April.
Over the past year, China has sought to ease its crackdowns on video gaming and internet platforms by throwing more support behind the private sector to revive uneven economic growth.
