Xi’s Mixed Messages Leave Whiplashed Investors Wary of China (2)

President Xi Jinping spent last year trying to woo foreign capital while continuing to reshape China’s business environment to ensure his power can’t be challenged at home or abroad. Those sometimes-conflicting goals have left investors confused and put bureaucrats on edge.

His government’s apparent backpedal this week is the latest example. Regulators shocked gaming companies on Dec. 22 with rules to cap in-game spending and prohibit mechanisms to incentivize more play time, in a bid to control a sector with growing sway over the nation’s youth. That wiped $80 billion in market value off firms such as tech giant Tencent ...