Fines will be given to those who show more than 2cm of cleavage. Because showing any skin, any skin at all (even if historically accurate) is not ok.
The original title of this article was "China cracks down on cleavage at cosplay convention" so I assume cosplayers were being told not to show skin.
Turns out, the change in rules actually has to do with models hired to showcase products at the conention, not at cosplayers themselves (though I'm sure there are rules for them, too).
Here's the rule: women who show more than two centimeters of cleavage will be fined $800. Men who show their underwear or wear low hanging pants will also be fined. Any one found dancing in a cage or around a pole will be fined $1,600.
Apparently, this comes after a few other developments apparently trying to retain "good morality" in China: a TV show that was about a queen during a time when showing off the bosom was the fashion was taken off air because of following this accurately. Recent car shows have banned "car babes" that you usually see at the shows.
I don't know about you, but none of this is behavior I've seen at an anime convention before. I can understand not wanting these things, but to ban it completely? I can't see that going well in the long run.