SINGAPORE—China’s Communist Party is ratcheting up its control over news media and online commentary, warning away private investors and cracking down on what it describes as misinformation, as it continues a campaign to assert itself more forcefully across the economy and Chinese society.

The country’s central economic planning agency released on Friday a draft regulation that promised to expand restrictions on the involvement of “nonpublic capital” in swaths of the news industry—a warning to news organizations with private...

SINGAPORE—China’s Communist Party is ratcheting up its control over news media and online commentary, warning away private investors and cracking down on what it describes as misinformation, as it continues a campaign to assert itself more forcefully across the economy and Chinese society.

The country’s central economic planning agency released on Friday a draft regulation that promised to expand restrictions on the involvement of “nonpublic capital” in swaths of the news industry—a warning to news organizations with private funding to step carefully, according to analysts.

On the same day, authorities in southern China detained a well-known former journalist for allegedly insulting national martyrs in a post on social media that questioned the Communist Party’s account of the Korean War.

Both events come on the heels of other tightening moves, including a decision by China’s internet regulator at the end of August to muzzle over 1,000 independent financial bloggers, some with large followings, whom it accused of spreading false information.

A large screen in Fuyang, China, showed President Xi Jinping marking the centenary of the founding of the Chinese Communist Party on July 1.

Photo: Sheldon Cooper/SOPA Images/LightRocket/Getty Images

While Chinese leaders have always maintained strict controls on the country’s media, the latest clampdown is significant for its timing, media scholars and analysts said. It comes in the midst of a campaign by Chinese leader Xi Jinping to limit the power of private business and give the Communist Party a greater say in everything from entertainment to finance to education.

“Mr. Xi wants to create a new China, and as part of his creation, he’s making these moves,” said Fang Kecheng, an assistant professor of journalism at The Chinese University of Hong Kong. “The media plays a crucial part in this re-creation of society because of its role in shaping public opinion. He wants Chinese people to be thinking in a more uniform manner and subject to less influence from private capital.”

China’s national planning agency, the National Development and Reform Commission, and its main internet regulator, the Cyberspace Administration of China, didn’t respond to requests for comment.

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The draft regulation released on Friday by the planning agency is an update to the country’s restrictions on private investment in media. It includes new bans on private investment in platforms that provide live-streaming content related to the economy, sports, education and other topics “related to political affairs, the direction of public opinion and the orientation of values.”

The draft regulation also reiterates existing rules that prohibit private enterprises from news gathering and broadcasting, and adds a new ban on hosting news-related forums or award ceremonies.

The new restrictions are aimed at undermining the influence that China’s private internet companies have over media and public opinion, said Henry Gao, an associate professor of law at Singapore Management University.

A ban on organizing events would eliminate a source of revenue that Chinese media companies have come to rely on alongside ad sales, Mr. Gao said. If approved in its current form and actively enforced, the updated list of restrictions would also compel private investors to sell their shares in media properties to state-owned enterprises, likely at a discount, he added.

Many of the restrictions described in Friday’s draft have existed in some form for years, according to media scholars, but China’s large internet companies have long operated in a legal gray area when it comes to online news content. While print and broadcast media are heavily regulated in China, internet companies such as Sina Corp. and Tencent Holdings Ltd.

have produced news, financial and entertainment coverage and commentary with much less scrutiny, according to Zhan Jiang, a retired journalism professor at Beijing Foreign Studies University.

With Friday’s draft, the government is sending a signal to internet companies to watch their step, even in areas such as sports that previously attracted little attention from authorities, Mr. Zhan said.

Gu Yonghua, the former secretary at the All China Journalists Association Secretariat, described the draft restrictions as being guided by Marxist principles.

“No matter how media companies expand, they are required to fulfill relevant rules, and they have to prevent private capital and profit motivations from intervening in mainstream public opinion,” he said in a social-media post by the state-backed Economic Media Association of China dissecting the changes.

Chinese authorities have been especially aggressive in attempting to exert greater control over financial information as Mr. Xi tries to steer the Chinese economy through uncertainty caused by the Covid-19 pandemic and mounting concerns with debt-levels in the country’s all-important property sector.

From the end of August, the Twitter-like microblogging platform Weibo Corp. said it had closed or suspended about 1,000 accounts belonging to financial bloggers, including several with millions of followers, as part of a campaign initiated by China’s internet regulator to eliminate what it described as finance-related rumors, improper comments and other information that misrepresents China’s economic situation or its financial markets.

By early September, more than 1,800 social media accounts had been shut and more than 47,000 pieces of harmful information had been erased as part of the crackdown, the CAC said on Sept. 8.

The detention on Friday of Luo Changping, former deputy chief editor at the financial news magazine Caijing, highlighted the severity of the clampdown. Mr. Luo was taken into custody by authorities in the southern island province of Hainan for making “insulting” comments about Chinese soldiers during the Korean War, according to a statement posted on Weibo by the public security bureau in Hainan’s Jiyang district.

Weibo said Friday that it had shut down Mr. Luo’s account. Weibo posts by the influential former journalist led to the dismissal of a top Chinese official in 2013.

A poster in Beijing for Korean War movie "The Battle at Lake Changjin."

Photo: noel celis/Agence France-Presse/Getty Images

Jiyang police didn’t say what Mr. Luo had written to insult the soldiers. A screenshot circulating on the Chinese internet, which the Journal was unable to verify, shows a comment that Mr. Luo ostensibly posted about “The Battle at Lake Changjin,” a Korean War film currently dominating the Chinese box office, which questioned the wisdom of China’s participation in the war.

Mr. Luo couldn’t be reached.

If China approves the new restrictions on private investment, there remains a lot of uncertainty about how stringent any content cleanup or enforcement of the rules governing news media would be, Chinese University of Hong Kong’s Mr. Fang wrote in a blog post on Monday.

“All of society has already realized that we have entered into a very different era from the past, and past experiences might not be suitable to assess current events,” he wrote.

—Xiao Xiao and Raffaele Huang contributed to this article.