The country has a history of censoring its media platforms and this latest move isn't terribly surprising. Combing through and removing all of the content it deems inappropriate takes a fair amount of resources and livestreaming adds a layer of difficulty to those processes. Recently, Chinese authorities have shut down celebrity gossip accounts, made VPNs illegal and began requiring app stores to register with the government. They've also added restrictions on internet news outlets.
This latest move has already hurt companies like Weibo -- China's version of Twitter -- which rely on livestreaming to bring in revenue. After the announcement of the ban, Weibo's shares fell over six percent, shaving nearly a $1 billion off of the company's market capitalization. It's not clear if the ban is permanent.