The uproar was caused by a joke made by Chinese actor Li Haoshi in Beijing last week, marking the biggest scandal yet for a form of entertainment that has gained popularity through small shows.
Comedy shows became popular in China during the COVID-19 pandemic, as people spent more time indoors watching them.
The most popular of these was a show produced by Chao Guao Culture Media, the company that was at the center of the current buzz.
Comedian Li shot to fame when someone posted a description of a joke he made at a show on May 13, seen as insulting to the Chinese military.
Beijing police said on its Weibo account that they were investigating Li.
The Beijing Culture and Tourism Bureau imposed a fine of 14.7 million yuan ($2.13 million) on Chao Guao and banned it from hosting any performances in Beijing and Shanghai.
“We will never allow any company or individual to use the Chinese capital as a stage to deliberately slander the People’s Liberation Army’s glorious image,” the office said.
Other comedy companies have canceled scheduled shows without giving a reason.
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