Fake and parody accounts pretending to be government organisations, celebrities and officials are banned, the Cyberspace Administration of China (CAC) said, as are nicknames that appear to advertise cults or pornography, or that damage state security.
CAC further said that the new restrictions were aimed at users, who took inappropriate online names such as Putin and Obama, promoted "vulgar culture," and committed fraud by pretending to be Communist Party officials.
"The rules require netizens to use registered account names on virtually all platforms, including blogs, social networking tools and messaging applications," Xu Feng, director of the administration's mobile network management bureau was quoted as saying by the state-run China Daily.
Notably, the announcement comes on a day when the US has blamed China of undermining open internet and expressed concern over the increasing curbs put on American companies in the Communist nation.
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The authorities have also promised to set up a complaint mechanism, giving users a chance to reapply for their accounts if they were shut down.
The rules will take effect on March 1 and they applies to chat rooms, blogs, instant messaging services and all other Internet services.
The regulation stipulates that avatars and account handles should not include information that violates the Constitution or China's laws, subverts state power, undermines national security and sovereignty, or is deemed rumour mongering.
Last month, the CAC shut down 133 accounts on popular instant messaging app WeChat for publishing illegal content that "disobeyed socialist core values" and "severely disturbed the online order".