China's recent punishment of a comedy studio has sent a chill through the country's cultural sphere — a striking reminder of the increasingly limited public space for artistic expression under leader Xi Jinping.

Authorities earlier this month fined Xiaoguo Culture Media millions of dollars and suspended their performances indefinitely after a comic made an oblique joke about the People's Liberation Army.

Stand-up comedian Li Haoshi referenced a well-known PLA slogan when joking about watching his dogs chase a squirrel — which officials subsequently announced had "caused a bad social impact" and broken the law.