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Your're going to see a lot of reactionary "Animal Crossing banned in China" stories over the next week. So I wrote the thread below to explain the full situation, which still sucks, but is a bit more complicated than what headlines will suggest.
User generated content will always be an issue in China because the government wants to be able to control platforms strictly.

If the govt does not have any control over a platform (or game in this case) and that platform becomes big then it will likely be blocked in some way.
For example. Facebook and Twitch are blocked in China because it is an overseas service that the govt cannot control.

A Chinese version of Minecraft was able to be approved and release because it is controlled by NetEase who can monitor user generated content in game.
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