UPDATE 1-China bureaucratic war over online Warcraft heats up

By Chris Buckley and Melanie Lee

BEIJING, Nov 4 (Reuters) - China's Culture Ministry has accused the publishing watchdog of abusing its authority by threatening access to the popular online game, World of Warcraft, stoking bureaucratic rivalry over control of the Internet.

The ministry scolded the General Administration of Press and Publication (GAPP), which had told Chinese online game firm NetEase.com (NTES.O: Quote, Profile, Research) not to operate the latest version of Activision Blizzard's (ATVI.O: Quote, Profile, Research) World of Warcraft, the Chinese-language Economic Information Daily said on Wednesday.

NetEase has said it is examining the demand.

The rare public turf war between the two agencies has exposed the tricky regulatory undergrowth that Internet companies must navigate in China.

"This just highlights the overall risks of investing in China, given that the Internet is a new industry and China itself is an emerging economy," said Dick Wei, an analyst with JP Morgan in Hong Kong.

China's Communist Party leadership has demanded tighter control over the Internet and online gaming, worried about images and words it sees as pornographic, unhealthy or subversive.

Government agencies have in turn been eager to enforce those demands, and competed to stake out control of the potentially lucrative and prestigious sector, and reap the regulatory fees.

"The Ministry of Culture believes the notice from the General Administration of Press and Publication does not conform to the relevant regulations, and clearly oversteps its authority," said Li Xiong, a Ministry of Culture (MOC) official in charge of market affairs, according to the Economic Information Daily.