China's esports industry is staging a comeback by reversing a two-year revenue slump in the first half of the year, fueled by a growing user base, stronger international influence and government support, said a recent industry report.

According to the report by the China Audio-Video and Digital Publishing Association, China remained the world's largest esports market by user base in the first half of this year, with approximately 490 million users, up 0.52 percent from last year.

Revenue from the esports sector hit 12.02 billion yuan ($1.65 billion) in the first six months of the year, an increase of 4.43 percent year-on-year. Such momentum is largely driven by game livestreaming, which accounted for nearly 80 percent of the total.

Zhang Yijun, vice-chairman of the association, said that since the beginning of the year, the industry is benefiting from fresh policy initiatives from both central and local governments to nurture high-quality growth.

Cities like Shenzhen, Guangdong province, have rolled out generous rewards for esports game development and competitions. For example, new games achieving significant popularity can receive up to 2 million yuan, while high-profile tournaments are eligible for up to 5-8 million yuan in subsidies.

In addition to hosting international esports events, China is collaborating with international organizations to create new standards for esports through initiatives like the International Esports Federation's working group.

Also, esports has been recognized as an official profession, leading to the creation of university programs and professional training paths to meet the growing demand for skilled talent in the industry.

"The policies have clear goals and structured plans, which aim to enhance the esports ecosystem and promote the sector's international reach," Zhang said, adding that the global appeal of Chinese esports has been expanded.

Overseas tournaments have reached peak audiences of over 2 million viewers per match, with events in Southeast Asia becoming some of the most popular in Indonesia, the Philippines and Malaysia.

Zhang said that China is also targeting new markets. While Japanese, Southeast Asian and Latin American audiences remain vital, recent tournaments in Europe, North Africa and South Asia indicate a strategic push to broaden global influence, he said.

"The industry's dual strategy of going global and bringing events to China has deepened international exchanges and elevated China's esports profile as a whole," he added.

Another milestone is the fact that esports was included as an official medal event at the 19th Asian Games, which was held from Sept 23 to Oct 8 of last year in Hangzhou, capital of Zhejiang province.

Kenneth Fok Kai-kong, president of the Asian Electronic Sports Federation, said at a sports summit in July: "The Asian esports industry is booming, and has already unleashed its huge potential. It has the power to connect people from different backgrounds, cultures, countries and regions."

Mars Hou, vice-president of Tencent Games and general manager of Tencent Esports, said: "Esports is a booming new industry in the digital era, and we have millions of esports players and spectators.

"We expect to have further communication and cooperation with more partners in sectors such as international communication, talent selection and nurturing, digital sports studies, and industry standardization."