A pretty good move for many reasons. Rampant money laundering being one of the more serious ones.

Sure trying to curb money laundering is good, but talk about throwing out the baby with the bath water. If people choose to place a real-world value on virtual currencies I think that is none of the government's business. Many people just want to "pay to play".

I feel happy at the same time sad when I read this news. I'm happy because as a gamer I think that other players who buy wow gold are being unfair. I feel sad because I read an article about a student who "starved" but was able to go on by selling his virtual currency for real money. It's kinda touching story --
http://www.procontentsite.com/articles/index.php?page=article&article_id=82346

For two main reasons - that gold farming is not the target here; and that there's a big gap between announcement and implementation - I suspect this will not have a great deal of impact on gold farming. More analysis on the ICTs for Development blog at: http://ict4dblog.wordpress.com/2009/07/01/china-bans-gold-farming-er-but-in-fact
-it-hasnt/

1. virtual currency still can be traded through trade service companies, not the game operating companies, and this is a big movement that the government confirms that virtual currency can be trade for the first time;
2. forbid the "gambling" system in games, which is common in almost all games in China. This will push the Chinese game companies to put more energy on improving the game quality and contents, but this is bad news to those small game companies and studios for they will lost the most "valuable" revenue source, some games revenue will be reduced by 50%-80%.