Online: A Virtual Gold Rush; Foreigners think Chinese are money-grubbing and untrustworthy even in the realm of dwarves, orcs and elves.(World of Warcraft: Massively Multiplayer Online Role Playing Game)

Byline: Melinda Liu (With Steven Levy in Irvine, California)

With his longish hair, casual polo shirt and baggy shorts, Li Zhi looks like the entrepreneurial boss of a small-town computer company, which is what he used to be. Now the thirtysomething Li runs an unusual sweatshop in the Hubei-province city of Wuxue, the kind of place where a farmer might buy a computer in town and transport it home by donkey cart. Wuxue also has high-speed Internet access and hundreds of residents playing the popular online role-playing game called World of Warcraft. Some 200 of them work for bosses such as Li, single-mindedly playing Warcraft to collect in-game currency and trade it for real-world cash. Li's so-called gold-farming operation is modest, but profitable.

If you think Chinese have an image problem in real life, take a look at the virtual world. World of Warcraft is a Massively Multiplayer Online Role Playing Game, or MMOG, that boasts more than 7 million players worldwide--with some 5 million reportedly in China. The game--which has been called an Americanized version of "Lord of the Rings"--is populated by everything from dwarfs and night-elves to orc-hunters and rogues. Then there are the gold farmers, who have just one goal: to scoop up as much in-game currency, or gold, as they can in the shortest amount of time.

They sell this for real money to other gamers who crave the gold to buy valuable magic spells and weapons. The practice is frowned upon by much of the Net establishment, including WOW's designers at the Irvine, California-based firm Blizzard Entertainment. "We're trying to make a game. We're not trying to create a second business for people," says Blizzard president and co-founder Mike Morhaime. "We do try to police the game so that this sort of thing doesn't happen."

That's because gold farmers don't play by the rules--Blizzard's rules, that is, which bar "real-money trade." Gold farmers, most of whom are ethnic Chinese, also shun much of the in-game social interaction that Blizzard's designers envisaged. Instead they obsess over "items" that translate into gold, from magical weapons to corpses that can be looted. Blizzard contends that monetary ambitions within WOW degrade the players' enjoyment; some, though not all gamers agree. But real-money trade isn't illegal in real life--and the Web is crawling with intermediaries offering to swap gold for money, quoting the latest gold-to-greenback exchange rates, or recruiting ...