China bans foreign investment in online gaming

[Trippy]

China bans foreign investment in online gaming

Xinhua, October 11, 2009

China's press and copyright authorities have banned foreign investors from operating online games "in any form" in the country.

A circular jointly released by the General Administration of Press and Publication (GAPP) and the National Copyright Administration Saturday said foreign businesses were banned from investment in China's online game operations through setting up wholly owned enterprises, joint ventures and cooperatives.

Foreign investors were also prohibited from joining and controlling Chinese enterprises' online game operations by such indirect means as contracting relevant agreements or offering technological support.

The rule also tightened control over domestic online gaming businesses. It stated that no organizations or individuals could run online gaming business without permits from the GAPP and online games without a prior approval from the administration would not be allowed to go online.

"The new rule is a good beginning in approving the online games in accordance with laws and will be conducive to the regulation of online gaming businesses," said Kou Xiaowei, vice director of GAPP's technological and digital department.

The GAPP had carried out a campaign recently to crack down on online games operating illegally and featuring unhealthy contents. As of Thursday, more than 200 online games had been investigated and 45 overseas online games run without prior approval had been shutdown.

China had about 338 million Internet users as of June 30, topping the world, according to a latest report by the China Internet Network Information Center (CNNIC).

[Trippy]

Dunno if this will have any affect on the Blizzard/NetEase (new operator of WoW in China) relationship.

[Merusk]

I think it pretty much shuts it down, unless Blizzard outright sells the rights to whomever is going to run the game in China.

China: We PK in economics.

[Fordel]

It reads to me that they'll just need approval of whatever governing board is in charge of MMO's or whatever. Something Blizzard already gets and tweaks WoW for accordingly.

[Merusk]

Foreign investors were also prohibited from joining and controlling Chinese enterprises' online game operations by such indirect means as contracting relevant agreements or offering technological support.

The first part is the thing most relevant to WOW, I believe.  Blizzard probably doesn't offer tech support, but they are controlling game operations  (thou shalt not sell gold, items, make druids into koalas) and contracting the day to day out to the Chinese firm.   I could be misunderstanding the intent of that clause, though.

[Mavor]

 This seems to be a very prudent economic move.. protecting Chinese online game companies and allowing them to develop more without getting wiped out by giants such as "WOW". Online games are not very good for the Chinese economy if they are being operated by a foreign company because all of the money that goes into it is pretty much a black hole as far as the Chinese government is concerned.

 Many countries did this same thing back in the days of the early tech industry, the steel industry, and the automobile industry. I think what we are seeing here is just that the Chinese government is recognizing how important it is to foster the development of their own online game companies.

[Kageru]

It's nothing new though. It was their market protection that led to Blizzard having to work through a Chinese company in the first place. I guess if you are a huge, and centrally controlled, market you can write the rules to favor yourself. Make the local gamers unhappy but ensure the money stays in China and even potentially develops to the point where you can get export dollars. They tried to do the same with avoiding a windows dependency (though I suspect piracy solved that problem).

[tazelbain]

So protectionism is awesome when China does it?

[Tearofsoul]

The truth is:

Cultural Affairs Bureau and GAPP (General Administration of Press and Publication) are fighting for the right of allowing foreign online gaming operating in China. What's that mean? It means if you wannna publish your game in China as a foreign game company, HAND THEM $$$.

And the story behind WoW back online in China was:

Instead of dealing with GAPP, Blizzard/NetEase skipped GAPP this time. Handed their $$$ to Cultural Affairs Bureau of China, then boom! WoW is back online in China. And guess what? GAPP is pissed.

[Pendan]

Wouldn't the World Trade Organization have something to say about a ban? China did become a member in 2001.

[LK]

Can you sue a government if they made you do all these things to make your game sell there, creating a huge expense, then rewriting the rules to invalidate all that work?

[Teleku]

China is one the the most protectionist countries in the world (all the while lecturing everybody else about the evils of protecting their economies from the Chinese).  This is par for the course.  They do keep getting taken to the WTO, and losing every time because of how blatant they are about it, but its slow going and takes years, which means the damage they want to inflict is already done.  We really should retaliate against this (and many other things frankly), not sure if enough people care though.

[El Gallo]

:Insert analogy to opium trade here:

[slog]

China is one the the most protectionist countries in the world (all the while lecturing everybody else about the evils of protecting their economies from the Chinese).  This is par for the course.  They do keep getting taken to the WTO, and losing every time because of how blatant they are about it, but its slow going and takes years, which means the damage they want to inflict is already done.  We really should retaliate against this (and many other things frankly), not sure if enough people care though.

Can't afford to piss of the people that finance your budget deficit.

[tmp]

Can you sue a government if they made you do all these things to make your game sell there, creating a huge expense, then rewriting the rules to invalidate all that work?

the Chinese government? Yeah, sure. Good luck

[Teleku]

China is one the the most protectionist countries in the world (all the while lecturing everybody else about the evils of protecting their economies from the Chinese).  This is par for the course.  They do keep getting taken to the WTO, and losing every time because of how blatant they are about it, but its slow going and takes years, which means the damage they want to inflict is already done.  We really should retaliate against this (and many other things frankly), not sure if enough people care though.

Can't afford to piss of the people that finance your budget deficit.

When they desperatly need to finance your budget deficit to keep their own economy afloat, yes you can 

[Merusk]

China likes playing economic hardball.  We need them as much as they need us.  However, they know we'll blink first, every time.

Even if we don't and the whole world economy crashes, who do you think it will hurt more?  The hundreds of millions of Chinese still living in rural farmland doing the same thing their ancestors did a few hundred years ago or the Americans who consider 'poor' to be folks who only have one TV and can't afford cable?  (The Elite of both nations will, of course, suffer very little if at all. Such is the way of things.)

[Mavor]

 Hey let's not forget that before the British and America were on top of the heap in terms of industrial capacity and intellectual development, they both used heavy protectionist policies to keep their young industries afloat while they grew. It's nothing new, and America and the rest of the developed countries are just pissed because China represents a huge market for them to rape. Protectionist policies are the only way to allow China to get into the high tech and IT markets without getting slaughtered by the leading giants.

 But as some of you might know, if you can't penetrate, then it's not rape-rape.

[rattran]

This is not the Politics Board. Go be stupid where it can be confined.

[ghost]

Online gaming is clearly bad for the gubment.