Four ministerial-level departments including the Ministry of Culture and General Administration of Sport (GAS) issued a circular regulating dancing in public areas on Sunday.
Square dancing in public areas is a popular community activity among Chinese people, mostly elderly female retirees.
The circular said square dancing is encouraged in China and local authorities should provide convenient outdoor venues and facilities for residents to work out.
The circular asked local governments to offer free teaching of dance routines and promote the creation of more dance routines.
In March, the GAS published a set of 12 square dances to be promoted nationwide.
Local governments are also asked to keep order in the dancing areas, especially controlling noise.
Chinese square dancing is very popular with the elderly as its easy to arrange anywhere. All that is needed is a stereo and friends, though passers-by often stop and join in. Groups of dancing elderly ladies are a common sight at dusk all over China.
But nearby residents complain about the loudspeakers and flashing lights. As it is not easy for the retirees to find proper venues without affecting others, dancers sometimes refuse to turn down the volume or find a new place.
Last year, Anhui and Zhejiang provinces issued regulations that allowed dancing only during specific hours of the day and in non-residential areas.