China proposes new regulations that would limit online gaming

China's ruling Communist Party released draft guidelines Friday to limit online gaming spending in its latest move to control the virtual economy.

Chinese gaming giants Tencent and NetEase fell in Hong Kong after the proposal.

China's National Press and Publication Administration prohibits online games from offering daily log-in or purchase incentives. Recharge limits and “irrational consumption behavior” warnings are also in place.

Tencent, China's largest gaming company, fell 16% before recovering to close 12% lower. Stock of rival NetEase fell 25%.

Beijing has moved against online games in recent years.

In 2021, regulators limited children's game time to three hours per week. Chinese state media called online games “spiritual opium,” referencing past drug addictions in China.