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       Will China Ease Its New Video Game Controls? Investors Think So.

       After a market rout, gaming companies like Tencent and Netease rally on signals that regulators might apply proposed curbs on users less harshly than feared.

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       Gamers at an internet cafe in Beijing. Credit...Greg Baker/Agence France-Presse — Getty Images

       By John Liu

       Reporting from Seoul

       Dec. 27, 2023Updated 3:30 a.m. ET

       The stock prices of Chinese video game companies rebounded Wednesday after investors seized on signals that the government was having second thoughts about proposed regulations on gaming.

       Since the weekend, regulators have attempted to calm the market after shares of the two largest video game companies, Tencent and Netease, plunged on Friday.

       When trading resumed after the four-day holiday weekend in Hong Kong, Tencent rose about 4 percent and Netease jumped 12 percent, recovering some of their losses.

       The events of the past several days underline the push-and-pull forces in Chinese policymaking. The country’s top leaders have acknowledged they need to stabilize the economy, which has been slow to recover from being virtually locked down during the Covid pandemic. But the government’s tight control of how companies do business continues to inject uncertainty into the markets.

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       China’s National Press and Publication Administration, which issues licenses to game publishers and oversees the industry, unveiled a proposal on Friday aimed at effectively reducing how much people spend playing games. The plan took the industry by surprise, and investors dumped tens of billions of dollars in company stock.

       More on China Rebuilding a Secretive Base: New satellite images show that Beijing is investing heavily in the modernization of Lop Nur, a sprawling military site where China long detonated atom bombs and thermonuclear warheads. A Rebel Influencer: In 2022, Li Ying used social media to help tell the world about the most widespread protests that China had seen in decades. He has paid a high personal cost for his activism. Electric Cars: China’s electric vehicle market is the world’s largest and fastest growing. But the country is struggling to hire the skilled workers it needs to keep up, amid a shortfall in vocational training and a surplus of young people who aren’t interested in factory work. A Heavier Hand: In his decade as China’s top leader, Xi Jinping has asserted greater control for himself and the Communist Party over the country’s economy. Now, he has moved to extend that power more forcefully than ever over China’s financial system.

       The regulator issued a statement on Saturday stressing that the draft rules aim to “promote the prosperity and healthy development of the industry,” and said it is “listening to more opinions comprehensively and improving regulations and provisions.”

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       John Liu covers China and technology for The Times, focusing primarily on the interplay between politics and technology supply chains. He is based in Seoul. More about John Liu

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