What happened
Shares of the Chinese video gaming company Bilibili (BILI -2.13%) traded 8.4% higher as of 11:15 a.m. ET today after some positive regulatory news for the video gaming industry in China.
So what
Reuters reported this morning that the National Press and Publication Administration (NPPA), the agency that licenses video games in China, ended a nine-month freeze on licenses and handed out 45 licenses for games to several Chinese companies.
Image source: Getty Images.
That list, according to Reuters, included the likes of Baidu and XD Inc. It's unclear if Bilibili was on that list, but investors seem to take the news as positive regardless, because it may suggest an easing regulatory landscape in the industry.
Regulators in China halted video game licenses last July, which led to thousands of companies shutting down. Regulators at the time of this freeze had also been setting new time limits for how long people under 18 could play games due to concerns over addiction.
Now what
Although it was not yet clear as of this writing whether Bilibili had received a license, the news is certainly good for the industry and the company. Over the past month, Chinese regulators in many industries seem to be easing on what has been viewed as a regulatory crackdown during the past year.
In recent weeks, Chinese financial regulators have started working with U.S. financial regulators to settle a long-standing dispute over auditing practices that have prevented foreign accountants from viewing working financial documents of Chinese companies listed on foreign exchanges. If reached, a compromise could prevent hundreds of Chinese stocks from being delisted from U.S. exchanges.
I view this potential compromise and other easing regulatory stances like the NPPA's granting of video game licenses as positive developments for Chinese stocks.
