InformationWeek reports that China has banned trading virtual goods for real money, making the practice of "gold farming" illegal (thanks Slashdot). The report quotes a 2008 survey conducted by Richard Heeks at the University of Manchester estimating that between 80% and 85% of the world's gold farmers are in China, and says this of the new ruling:

The Chinese government estimates that trade in virtual currency exceeded several billion yuan last year, a figure that it claims has been growing at a rate of 20% annually. One billion yuan is currently equal to about $146 million.

The ruling is likely to affect many of the more than 300 million Internet users in China, as well as those in other countries involved in virtual currency trading. In the context of online role playing games like World of Warcraft, virtual currency trading is often called gold farming.

The most popular form of virtual currency in China is called "QQ coins," a form of virtual credit issued by Tencent.com.

Tencent.com, which has about 220 million registered users -- about as many as Facebook -- is quoted in the Chinese government news release as "resolutely" supporting the new rule. The government justifies its ban on virtual currency trading as a way to curtail gambling and other illegal online activities.