The Ministry of Culture said authorities revoked permits of more than 2,000 Internet cafes last year.
Internet cafes are often forced to close due to violations of the law, including allowing minors to use the services.
While urban cafes mostly abide by the law, many in the outskirts and rural areas, where supervision is slack, choose profits over compliance.
The ministry has launched a three-month campaign against Internet cafes open to minors after three teen suspects were found hiding in one after killing of a teacher in Hunan Province last month.
In order to help Internet cafes improve their image, the ministry issued a proposal to upgrade services last year.
More than 20 billion yuan (about USD 3.14 billion) has been invested in the sector in the past year to aid the process, according to the ministry's data.