It’s one thing to talk about government interference with business in the abstract.  In the U.S. this is usually a matter of massive paperwork, taxes, red tape and restrictions on employment, environmental impact, worker safety and health care.

In China, things can get significantly weirder.

Take the Chinese Web portal and online game company Netease.com (NTES).  NetEase is a competent, thriving enterprise with lots of online services and lots of subscribers.  But the big story for people holding the company’s stock was its acquisition of the franchise for World of Warcraft, a massively multiplayer online role-playing game with a huge following.

Netease had been operating the game in a private beta version (free-to-play) and anticipating the good times when it got full government approval to go commercial.  There were just a few objections that the General Administration of Press and Publication (GAPP) had to some content.  It was all going to work out.

Then GAPP found out that NetEase had received an OK from the Ministry of Culture to begin operating the game, which it was doing.  GAPP had a hissy fit and denied the application to run World or Warcraft and terminated the approval process.

The Ministry of Culture has responded that GAPP has no jurisdiction over the World of Warcraft application and that the game is being legally run.

Now the whole brouhaha has been kicked upstairs to the State Council.  That should go well.

This is further proof that, if there’s anything worse than getting crossways with a government agency, it’s getting caught in the middle of a pissing match between two of them.

The Cabot publications that owned NTES have long since advised selling.  (We made good money, too, having bought back in April.)  As usual, identifying abnormal weakness in a stock allowed us to get out before the bad news hit.  Chart reading remains one of the more vital skills needed for successful growth investing.

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Today’s stock pick is a new initial public offering from China that has a great pedigree.  It’s Shanda Games (GAME), the revenue-producing portion of Shanda Interactive Entertainment (SNDA) that was spun off from the parent company on September 27.

Shanda has been around for a while, offering a growing lineup of online games, all the way from casual time-wasters to immersive MMORPGs like Dungeons and Dragons Online.  It’s not clear why Shanda Interactive wanted to kick Shanda Games out the door.

But after a post-IPO droop that pulled the stock down from 12 to 9, GAME has shown some life, jumping back on top of its 25-day moving average.

Like a racehorse with good breeding, GAME is an interesting bet on the popularity of online games in China because it has the experience of Shanda’s long history behind it.  It will bear watching.