CCP Issues Contradictory Policies on Chinese Gaming Industry, Causing Sharp Stock Market Fluctuations

Experts say it’s for the regime’s ideological control and political and military purposes.The Chinese communist regime has sent mixed signals by issuing contradictory policies within less than two weeks to regulate China’s $42 billion domestic online video gaming industry, causing stock market fluctuations.Experts have pointed out that the flurry of policies are for the ruling communist party’s political control and potential military purposes.At the Chinese Communist Party’s (CCP) annual Central Economic Work Conference on Dec. 12, the party said the central government will put out “more policies to help stabilize expectations, growth, and employment,” setting economic growth as its “top priority” in its technology industry. In response, stock prices for gaming companies went up for a few days.However, on Dec. 22, China’s National Press and Publication Administration issued its “Online Game Management Measures (Draft for Comments),” which directly restricts the online gaming industry’s operations and marketing methods in detail, including setting user recharge limits.Afterwards, Chinese video gaming stocks fell sharply for two consecutive trading days on Friday, Dec. 22, and Monday, Dec. 25, losing tens of billions of dollars in market value. The people working within the industry complained that the authorities were “rescuing the market on one hand, while sabotaging the market on the other hand.”After putting out its draft policies to curb the gaming industry, the CCP’s National Press and Publication Administration approved 105 new domestic games on the same day, which was the first time it approved more than 100 games in a single announcement.Related StoriesMainland Chinese media reported that as of late Dec. 25, after the new approval, eight listed Chinese gaming companies, including Perfect World, had announced they would repurchase or increase their shares to a total of at least 530 million yuan ($75 million) to show their optimism about the industry’s prospects. Chinese online gaming companies’ stock prices rebounded sharply on Dec. 26 and Dec. 27.Political ControlWang He, a China affairs observer, told The Epoch Times on Dec. 26 that the gaming industry is rapidly expanding in China and around the world. At the same time, gaming addiction has raised serious consequences. The World Health Organization has listed gaming disorder as a new disease. Meanwhile, Mr. Wang said, the CCP is clamping down on the gaming industry in China for ideological control and “national security” reasons.Mr. Wang said that the key difference is that “the western democratic countries hold public hearings when making similar policies to allow all walks of life to discuss the issues freely, while the CCP can do whatever it wants as it is a one party dictatorship.”Nan Jifeng, former vice president of a China-based gaming company, told The Epoch Times on Dec. 26 of the new regulatory measures, “It’s not for players or for the people or for the companies, but for [the CCP] themselves; the ultimate goal is just to control everyone and make you obedient.”The CCP has repeatedly cracked down on the gaming industry, saying it’s to suppress content that promotes violence or soft pornography. However, at the same time, it acts to tighten the censorship of the content. “All actions taken by the authorities are for the security of the regime,” Mr. Nan said.He pointed out that the CCP controls online gaming companies with an emphasis on political loyalty to the party. Some gaming companies’ mergers and acquisitions go smoothly, while others do not. The reason is that the former are willing to bow to the regime and do what the regime wants them to do.He said, “So they’ve made some red games, such as Long March Road, which is not a fun game but it meets the government’s requirements and the company was willing to do it, even if it does not make money. Then, these companies can get some policy relaxations.” A Chinese man plays online games at an internet cafe in Wuhan, China, in this file photo. (Cancan Chu/Getty Images)Mr. Nan said that if the gaming companies make too much money and are beyond the control of the authorities, they will definitely be suppressed.He said that some Chinese game companies go overseas to make money but the CCP only wants them to earn foreign money to bring back to China. “If they want to invest the money overseas, it is absolutely impossible. In 2017, I wanted to invest in a company in South Korea to release video games. The first investment was only US$200,000, but the money was held by the regime for six months.”Mr. Nan pointed out that the current Chinese gaming industry is being reshuffled, “which is that they kill all the disobedient companies ... only those who are obedient, willing to give the money they earn to the regime, and willing to contribute to the regime’s ideological propaganda, can survive. This is the situation.”Potential Military Use Chinese soldiers arrive at the Grodekovo railway station to

CCP Issues Contradictory Policies on Chinese Gaming Industry, Causing Sharp Stock Market Fluctuations

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Experts say it’s for the regime’s ideological control and political and military purposes.

The Chinese communist regime has sent mixed signals by issuing contradictory policies within less than two weeks to regulate China’s $42 billion domestic online video gaming industry, causing stock market fluctuations.

Experts have pointed out that the flurry of policies are for the ruling communist party’s political control and potential military purposes.

At the Chinese Communist Party’s (CCP) annual Central Economic Work Conference on Dec. 12, the party said the central government will put out “more policies to help stabilize expectations, growth, and employment,” setting economic growth as its “top priority” in its technology industry. In response, stock prices for gaming companies went up for a few days.

However, on Dec. 22, China’s National Press and Publication Administration issued its “Online Game Management Measures (Draft for Comments),” which directly restricts the online gaming industry’s operations and marketing methods in detail, including setting user recharge limits.

Afterwards, Chinese video gaming stocks fell sharply for two consecutive trading days on Friday, Dec. 22, and Monday, Dec. 25, losing tens of billions of dollars in market value. The people working within the industry complained that the authorities were “rescuing the market on one hand, while sabotaging the market on the other hand.”

After putting out its draft policies to curb the gaming industry, the CCP’s National Press and Publication Administration approved 105 new domestic games on the same day, which was the first time it approved more than 100 games in a single announcement.

Mainland Chinese media reported that as of late Dec. 25, after the new approval, eight listed Chinese gaming companies, including Perfect World, had announced they would repurchase or increase their shares to a total of at least 530 million yuan ($75 million) to show their optimism about the industry’s prospects. Chinese online gaming companies’ stock prices rebounded sharply on Dec. 26 and Dec. 27.

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Political Control

Wang He, a China affairs observer, told The Epoch Times on Dec. 26 that the gaming industry is rapidly expanding in China and around the world. At the same time, gaming addiction has raised serious consequences. The World Health Organization has listed gaming disorder as a new disease. Meanwhile, Mr. Wang said, the CCP is clamping down on the gaming industry in China for ideological control and “national security” reasons.

Mr. Wang said that the key difference is that “the western democratic countries hold public hearings when making similar policies to allow all walks of life to discuss the issues freely, while the CCP can do whatever it wants as it is a one party dictatorship.”

Nan Jifeng, former vice president of a China-based gaming company, told The Epoch Times on Dec. 26 of the new regulatory measures, “It’s not for players or for the people or for the companies, but for [the CCP] themselves; the ultimate goal is just to control everyone and make you obedient.”

The CCP has repeatedly cracked down on the gaming industry, saying it’s to suppress content that promotes violence or soft pornography. However, at the same time, it acts to tighten the censorship of the content. “All actions taken by the authorities are for the security of the regime,” Mr. Nan said.

He pointed out that the CCP controls online gaming companies with an emphasis on political loyalty to the party. Some gaming companies’ mergers and acquisitions go smoothly, while others do not. The reason is that the former are willing to bow to the regime and do what the regime wants them to do.

He said, “So they’ve made some red games, such as Long March Road, which is not a fun game but it meets the government’s requirements and the company was willing to do it, even if it does not make money. Then, these companies can get some policy relaxations.”

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 A Chinese man plays online games at an internet cafe in Wuhan, China, in this file photo. (Cancan Chu/Getty Images)
A Chinese man plays online games at an internet cafe in Wuhan, China, in this file photo. (Cancan Chu/Getty Images)

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Mr. Nan said that if the gaming companies make too much money and are beyond the control of the authorities, they will definitely be suppressed.

He said that some Chinese game companies go overseas to make money but the CCP only wants them to earn foreign money to bring back to China. “If they want to invest the money overseas, it is absolutely impossible. In 2017, I wanted to invest in a company in South Korea to release video games. The first investment was only US$200,000, but the money was held by the regime for six months.”

Mr. Nan pointed out that the current Chinese gaming industry is being reshuffled, “which is that they kill all the disobedient companies ... only those who are obedient, willing to give the money they earn to the regime, and willing to contribute to the regime’s ideological propaganda, can survive. This is the situation.”

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Potential Military Use

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 Chinese soldiers arrive at the Grodekovo railway station to participate in war games drills, in Grodekovo, Primorsky Krai, Russia, in a still from video released on Aug. 29, 2022. (Russian Defense Ministry Press Service via AP)
Chinese soldiers arrive at the Grodekovo railway station to participate in war games drills, in Grodekovo, Primorsky Krai, Russia, in a still from video released on Aug. 29, 2022. (Russian Defense Ministry Press Service via AP)

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China has published many online game research reports in recent years, highlighting the technical aspects of the gaming industry and its role in promoting digital technology.

Mr. Wang said that the gaming industry is at the forefront of the development of digital technology and plays a strong role in the development of microchips, software, and artificial intelligence. The CCP’s gaming industry has seen military-civilian dual use, and the technologies are also transferred to other emerging industries. “This technological potential can be transferred for military use so [the regime] can compete with the United States for hegemony. It will use this technology to conduct information surveillance on the West.”

Mr. Nan said that the CCP’s development of its gaming industry doesn’t represent the high-tech future direction of the digital age. “The military simulations, for example, are common in European and American companies, and the CCP just copied them.”

He added, “I know about some game companies that have completed government-outsourced jobs, and the content [they produced] is very rough. If the People’s Liberation Army uses these things for training, it is equivalent to using a particularly weak tool to train its own soldiers. It’s just a show. I have some experience in this myself. Those projects for the government, including fire protection training, are all done by gaming companies but the work is very low quality.”

Mr. Nan added that it takes more than 10 or 20 years to develop a game engine, and Chinese companies are eager for quick success and quick profits, so there will be no such time investment. “Capital is anxious to cash out, and it wants to see results within a year.”

Ning Haizhong and Yi Ru contributed to this report.