Authorities last week fined Xiaoguo Culture Media millions of dollars and suspended their performances indefinitely after a comic made an oblique joke about the People's Liberation Army (PLA).
Stand-up comedian Li Haoshi referenced a well-known PLA slogan when joking about watching his dogs chase a squirrel -- which officials subsequently announced had "caused a bad social impact" and broken the law.
The Chinese arts scene has always been heavily censored by the ruling Communist Party, and under Xi's decade-long rule, authorities have tightened that oversight.
But the swift retribution meted out to Xiaoguo represents "a sad, 'new low' in Chinese official tolerance for unorthodox speech", the University of Oxford's Vivienne Shue told AFP.
In the past, "it would have been more common to let such public transgressors off with just a stern private warning", she said.
Instead, officials fined the company 14.7 million yuan ($2.13 million) and opened an investigation into Li.
- 'Scare the monkeys' -
The penalty "was clearly issued in line with the old Chinese practice of 'killing a chicken to scare the monkeys'", said Steve Tsang, director of the SOAS China Institute.
"Most cultural workers and comedians are likely to act on the deterrence effect," he added.
The days after the announcement saw a spate of last-minute cancellations of musical and comedy performances nationwide.
In some cases "force majeure" was blamed, but others gave no reason and did not say whether the performances would take place in the future.
Japanese musician Kanho Yakushiji, whose Buddhist choral group's shows in Hangzhou, Shanghai and Beijing were nixed, said on Instagram he didn't understand the cancellations.
A staff member at a venue in the southern city of Shantou said a rock show had been postponed while "a new application was made for (official) approval" but that they did not know the exact reason why.
Multiple performers contacted by AFP would not comment on the current climate, fearing it would worsen the backlash.
Stand-up may be particularly risky as it is a relatively new form of comedy in China and "it is difficult to know the appropriate boundaries", SOAS' Xiaoning Lu told AFP.
It is also seen by some nationalists as a Western import undermining Chinese "cultural confidence", she said.
- 'Appropriate laughter' -
The Communist Party has historically kept a tight rein on the arts -- coopting them for political propaganda and quashing anything verging on dissent.
Leader Mao Zedong once said there was "no such thing as... art that is detached from or independent of politics".
"Censorship and self-censorship have always been present, although the intensity may vary from time to time," said Hong Kong Baptist University's Sheng Zou.
In recent years the government has published new "moral guidelines" demanding that performers embody positivity and patriotism.
It has also taken aim at "abnormal aesthetics" in media, including "sissy men" -- a pejorative term for men with an effeminate look.
Xi last week wrote to staff at the National Art Museum of China, urging them to "adhere to the correct political orientation", according to state media.
Announcing the comedy studio's fine, authorities said they hoped "all literary and artistic workers (would) comply with laws and regulations, correct their creative thinking, (and) strengthen moral cultivation".
"The boundaries of appropriate laughter have always been elastic in China, contingent upon political climate," said SOAS' Lu.
With the Xiaoguo incident, a new red line has been set, said Oxford's Shue.
"The military establishment is to be regarded as 'sacred' -- there is to be no public laughter whatsoever, even tangentially, at the expense of the PLA," she explained.
- Public nationalism -
The new boundaries are an extension of the muscular, hardline nationalism Xi has personally promoted since coming to power.
He has frequently used the slogan referenced in Li's joke, and extolled the strength of the armed forces in domestic information campaigns.
That fierce nationalism has trickled down -- Li was investigated after a complaint from a member of the public, authorities said.
His transgression was the topic of heated discussion, with hundreds of millions of hits on social media platform Weibo.
The widespread attention had created "mounting pressure... demanding serious treatment", said Zou.
Many online comments supported Li's punishment, although Weibo is heavily censored.
"In China, anything that involves insults to national dignity and pride is no trivial matter," Baptist University's Zou said.
"It is where the state's interest and public opinion most likely converge."
mjw/reb/dva
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