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The governing body of women's tennis took the decision after Peng made an allegation of sexual abuse against a Chinese official. WTA chairman Steve Simon said he worried about player safety at tournaments in China.
Peng Shuai made an allegation of sexual abuse against former Vice Premier Zhang Gaoli at the beginning of November
The Women's Tennis Association (WTA) has suspended all tournaments taking place in China, the sport's governing body announced on Wednesday.
The announcement comes after Peng Shuai posted an allegation of sexual assault against a top Chinese government official on November 2.
"I don't see how I can ask our athletes to compete there when Peng Shuai is not allowed to communicate freely and has seemingly been pressured to contradict her allegation of sexual assault," WTA Chairman and CEO Steve Simon said in a statement.
Simon said Peng's allegation "had to be listened to and taken seriously" and that she had shown "strength and courage" in speaking out, particularly as "she knew the dangers she would face, yet she went public anyway."
In response to the ban, China's foreign ministry said it stood opposed to politicizing sport.
The Chinese Tennis Association (CTA) also expressed its "indignation and firm opposition to this decision," saying in a statement in English:
"The unilateral decision of the WTA, in name of 'protecting its players,' was made based on fictitious information. It not only beset and hurt the relevant athlete herself, but also will severely harm the female tennis players' fair opportunities to compete, then damage the interest of the entire sport of tennis."
On Thursday, women's tour founder Billie Jean King and current men's world number one Novak Djokovic welcomed the stance from the WTA.
Djokovic called the move "very bold and very courageous", while 12-time Grand Slam singles winner King tweeted that the WTA was "on the right side of history."
Legendary tennis star Martina Navratilova was one of many who called on the International Olympic Committee (IOC) to apply pressure on China ahead of the Beijing 2022 Winter Games.
"I can barely hear you!" she wrote on Twitter.
Peng's former double partner Andrea Sestini Hlavackova told DW that the IOC should be doing more to pressure Chinese authorities.
"I think they (the IOC) have a great leverage right now towards China," she said. "So to me, it was quite shocking that they are not pushing harder, that they are not demanding more information and more proof.
"It's really crazy that the Olympic Committee is putting it under the rug like that. Like, 'It's OK. She's fine.' When they clearly know she's not."
The IOC said it had a second video call with Peng on Thursday, after being criticized for not calling on Beijing to ensure her safety after the first time they claimed to have spoken with her.
"We are using 'quiet diplomacy' which, given the circumstances and based on the experience of governments and other organizations, is indicated to be the most promising way to proceed effectively in such humanitarian matters," the IOC said.
Justifying his move to nix the Chinese events, WTA chairman Simon even quoted Peng's statement, which was removed from Chinese social media site Weibo just minutes after it was posted.
"As Peng said in her post, "Even if it is like an egg hitting a rock, or if I am like a moth drawn to the flame, inviting self-destruction, I will tell the truth about you."
Following the allegation of sexual assault against former Vice Premier Zhang Gaoli, the whereabouts of the former world No. 1 player in doubles was not known for two weeks. It prompted an outpouring of social media posts from tennis players, seeking information on the missing Chinese tennis star.
Even though fears for her safety appeared to have been allayed after footage of Peng emerged, concerns over her safety have endured.
On Tuesday, the European Union called on China to provide "verifiable proof" of Peng's well-being.
And until further notice, there will be no women's events, such as the end-of-year WTA finals, held in China as the WTA says it "cannot put our players and staff at risk" by holding events there.
On November 23, Beijing's foreign ministry said her case, subsequent disappearance, and questions surrounding the veracity of information coming from China were being "maliciously hyped up" for political purposes.