Advertising Strategy in China

Advertising Strategy in China: An Analysis of Cultural and Regulatory Factors
Sunil Erevelles Fred Morgan Ilkim Buke Rachel Nguyen
ABSTRACT. The Chinese market provides numerous opportunities for growth and development if approached properly. In this paper, we examine the regulatory aspects of advertising in China. The history of these regulations is reviewed and the cultural foundations of advertising regulations are highlighted. Current advertising regulations are critically reviewed, with an emphasis on strategic implications to help marketers cope with the regulatory milieu. [Article copies available for a fee from The
Haworth Document Delivery Service: 1-800-HAWORTH. E-mail address: <getinfo@haworthpressinc.com> Website: <http://www.HaworthPress.com> 2002 by The Haworth Press, Inc. All rights reserved.]
KEYWORDS. Cultural and regulatory issues, China, advertising, socialist values, corruption and risk, joint ventures
Sunil Erevelles is affiliated with the University of California-Riverside. California-Riverside. Fred Morgan is affiliated with the University of Kentucky. Both Ilkim Buke and Rachel Nguyen are affiliated with the University of California-Riverside. Address correspondence to: Sunil Erevelles, Anderson School of Management, University of California, Riverside, CA 92521 (E-mail: sunil.erevelles@ ucr.edu). The authors thank Ilkim Buke for her research assistance. Journal of International Consumer Marketing, Vol. 15(1) 2002 http://www.haworthpressinc.com/store/product.asp?sku=J046 2002 by The Haworth Press, Inc. All rights reserved.
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JOURNAL OF INTERNATIONAL CONSUMER MARKETING
INTRODUCTION The growth of the Chinese market, in terms of the number of consumers and the increasing attractiveness of imported goods, has attracted global marketers from hundreds of countries. As China moves toward becoming the worlds largest manufacturing zone (Aab, Johnston, and Lohtia 1995), marketers are trying to understand how to develop and position products for Chinese consumers. In this context, the advertising component of the marketing mix is particularly challenging to design because of unique Chinese cultural features and because of the Chinese regulatory environment within which advertising is implemented. For example, Saatchi and Saatchi could not show either patients or symptoms in Chinese television commercials promoting a remedy for athletes foot. The creative director of the Beijing office noted that creatively, we could be 10 times better than now if it wasnt for the regulations (Lee 2000). National support for advertising in China has been uneven during the twentieth century, although for the past two decades the government has looked favorably upon advertising if it is properly monitored. Even so, advertisers still must cope with long-standing cultural values and evolving regulatory treatment, including higher advertising rates for imported goods (Luo 1995). In 1995, the Chinese government completed its most recent review and restructuring of the law governing advertising practices. The remainder of this analysis examines these regulations within the broader setting of the Chinese culture. We first provide a brief overview of the history of advertising in China. We next review the two earlier sets of advertising regulations that form the background for current laws, which we analyze in greater detail. We then discuss the Chinese cultural factors that influence advertising programming. Throughout the manuscript we suggest advertising strategies and tactics that are responsive to the Chinese cultural and regulatory milieu, and in conclusions we summarize these suggestions. HISTORY OF ADVERTISING IN CHINA The history of organized advertising in China dates back to the late eighteenth century when shopkeepers displayed guild signs describing their work, although painted calendars may have been the first form of advertising (China Business Information Network 1997). Guild signs linked a business with an association of a particular trade that maintained common standards. Following guild signs, the use of handbills was popularized in Chinas growing marketplace in the late 1890s (Billings-Yun 1985). Over time, more effective advertising techniques were used to attract consumers. By the beginning of the twentieth century, window displays, billboard advertisements, and even neon signs were being used on the streets of China.
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With the Communist Revolution in 1949, however, advertising in China was stymied by the imposition of extensive regulations (Rice and Lu 1988). Marxist-socialist ideology of the State regarded advertising as a tool of bourgeois capitalism, saying it was used as a way to defraud the masses (Rice and Lu 1988). In addition, the Communist Party did not want advertising to be used as a form of political propaganda; therefore, the Party controlled published advertisements to avoid any kind of political dispute between the state and its citizens. By the end of the 1950s, almost all advertising agencies were owned by the Chinese Communist Party. The intense Marxist philosophy of the Chinese government toward the advertising industry started to change under Deng Xiopeng, starting in 1977. A leader who believed that economic power is a nations most important weapon, he imposed a four-year economic development program that included the advertising industry as a communication method for businesses (Rice and Lu 1988). Following the installation of this new plan, China opened its doors for the first time to modern advertising in the spring of 1979, when a radio channel made a spot announcement for a local photo studio (Baiyi 1990). During the post-prohibition years, Chinas advertising industry expanded in various ways, particularly in the past decade. Advertising in China totaled $302 million in 1990, growing to $4.4 billion in 1996 and $5.5 billion in 1997 (AP Newsfeed 1999; Gottesman 1996; Yamazaki 1997). Advertising expenditures in 1999 were $7.2 billion (Xinhua News Agency 2000b), with more than $1 billion spent in Shanghai (Xinhua News Agency 2000c). Outlays for advertising are expected to top $12 billion in 2000, making China the fourth largest advertising market, exceeded only by the United States, Japan, and Germany (Asia Pulse News 2000b). Multimedia is an important advertising source and is a critical factor in Chinas economic revival (Rice and Lu 1988). For example, Internet advertising tripled between 1997 and 1998, although the 1998 total was only $2.4 million (China Daily 1999a, b). Experts see Chinas Internet advertising increasing from $8 million in 1999 to more than $220 million in 2003 (Madden 1999), perhaps to as much as $900 million (Asia Pulse 2000a). The government still exerts considerable control on the industry, albeit with less stringent regulations. In 1979 abuses in the advertising industry angered consumers, and resulted in several complaints of exaggeration, fraud, over advertising, ugliness of advertising, and the pushing of items unsuitable to China (Billings-Yun 1985). In response the government issued regulations in 1982 to monitor advertising practices. Regulations stressed the supervision of advertising industry and consisted of 19 articles, increased to 22 in 1987. In 1995 the regulations were reviewed again, and the Chinese government established a new advertising law. Today the State Administration for Industry and Commerce (SAIC) continues to try to standardize advertising across product categories and media formats (Xinhua News Agency 2000a).
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REGULATORY PROCESSES AFFECTING ADVERTISING PROGRAMMING Advertising practices in China are monitored by different agencies reporting to the State Council and to the Chinese Communist Party. One of the most important agencies is the State Administration for Industry and Commerce (SAIC), established in 1949 as the Central Administration of Industry and Commerce (CAIC) during the Communist Revolution. During the economic revolution in the 1970s, the CAIC became an independent agency of the State Council and assumed its present name. The SAIC was given authority to control various functional areas of trade practices including the advertising industry (Lutz 1983). The authority of the SAIC was legitimized in 1982, with exclusive rights to control all advertising in China. In order to control advertising practices at local levels, the SAIC opened branches in different provinces. China comprises 31 provinces and municipalities, each with a local expanded AIC department, resulting in different interpretations of the law in different regions (Miao 1995). These branches are responsible for issuing licenses to companies that want to become advertising agencies. The 1982 laws stipulated that ads can be published only through agencies approved by the government, a practice continued in the 1995 revisions. The task of these agencies is to implement the state regulations of advertising before the advertisements go to local AIC departments. The AIC department for the assigned province is responsible for the legal permission for publication (Swanson 1990). Early Advertising Regulations: Advertising Laws of 1982 and 1987 With mounting pressure from the public because of advertising fraud, the first Advertising Law of the Peoples Republic of China took effect on May 1, 1982. The law consists of 19 broadly worded articles focusing mainly on consumer protection from dishonest advertising. The law requires government approval to publish or broadcast any advertisement. Any ad published without a permit or any enterprise advertising without a license from the SAIC is subject to penalties (Article 5). Clear and truthful advertising is stressed (Articles 6 and 7). Documentation is needed to substantiate information about the product contained in the ad. Issues forbidden in advertisements are covered in Article 8. These include contradictions to state policies and laws, ads degrading or harmful to the dignity of any Chinese nationality, or any ad construed as propaganda. Articles 9 and 10 regulate outdoor advertising. Monopolizing of advertising and unfair claims are also forbidden. The rest of the articles regulate the obligations of advertisers and companies to each other. Guidelines for fees that could be charged are explained in Article 11. The method for implementation
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of the penalties, as well as the penalties themselves, are described in Articles 13 and 14. The power to enforce these regulations was delegated to the SAIC. In 1987, the advertising regulations of 1982 were reviewed and extended from 19 to 22 articles. In addition to the original laws, the three new articles cover rules regarding tobacco and alcohol advertising, advertisements published through the news media, and the penalties that would be implemented in case of any violation of the regulations (Baiyi 1990). The Advertising Law of 1995 On October 27, 1994, the Chinese government formulated a new set of advertising regulations, effective February 1, 1995 (PRC Advertisements Law 1995). These regulations are a more detailed and updated version of the 1987 regulations. The new regulations are more specific and stringent in language and implementation. Moreover, the AICs began to enforce them with increased vigor. In 1995, the Shanghai AIC alone found 108 advertisements that violated the new advertising law (Jie Fan Daily 1996). In addition, 277 advertising agencies in Shanghai were punished for violations. Their licenses were either suspended, or they were banned from renewing them (Jie Fan Daily 1996). Most violations were for ads for food, medicine, or real estate. The new Advertising Law of 1995 contained six chapters with an extended number of articles. The text of the PRC Advertisements Law (1995) is included in Appendix I. General Provisions. The first chapter of the PRC Advertisements Law (1995) emphasizes the protection of the rights and interests of the consumers (Article 1) and defines the terms used in the rest of the document (Article 2). The general provisions also stress truthfulness, fairness, and honesty in advertisements, and the importance of protecting the consumer from misleading information (Articles 3, 4, 5). Article 3 requires that all ad content be true, lawful, and consistent with socialist norms. Article 4 forbids using falsehood to deceive or mislead consumers. This article has been so broadly interpreted in some provinces that showing healthy people in tobacco ads was judged to be misleading and banned (Cheng 1994). Article 6 in the first chapter defines the responsibilities of the Administration for Industry and Commerce (AICs) and empowers it with authority to supervise all advertising activities. Guiding Principles. The second chapter contains the guiding principles for advertising in China. This chapter is probably the most important chapter of the regulations as it specifies the rules that an advertiser should follow when preparing an ad. The regulations cover six basic issues: (1) protection of the dignity and interests of the State, (2) conformation to social norms and ethics, (3) presentation of product information in advertisements, (4) advertising of
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tobacco and food products, (5) advertising of medical and chemical products and cosmetics, and (6) truth-in-advertising and comparative advertising. Advertising Activities. The third chapter of the PRC Advertisements Law (1995) regulates advertising activities and the parties performing them: (1) regulation of activities among advertising parties, (2) approvals and certifications required by advertisers, (3) regulation of fees, and (4) regulation of outdoor advertising. Examination of Advertisements. Chapter 4 covers the examination of ads prior to publication. Certain products cannot be advertised in any media before examination by relevant advertising examination organizations (Article 34). These include medicines, medical apparatuses, pesticides, veterinary medicines, and other advertisements that are required for examination by law (Article 34). When submitting their ads for review by relevant organizations, advertisers are required to include all relevant documents, certifications, and supporting materials required by law (Article 35). Legal Responsibility. This section contains 12 articles that describe the penalties that may be incurred and the procedures to be followed in case of a violation of the regulations stated above. This section cover seven basic areas: (1) false advertising, (2) violation of content rules, (3) violations in advertising for special products, (4) advertising for special products, (5) approval and documentation violations, (6) violations and abuse of power by state officials, and (7) appeals and enforcement. Supplementary Provisions. The last article of the PRC Advertisements Law (1995) brought the regulations into effect on February 1, 1995, and stipulated that they superseded any prior regulations (Article 49). The new regulations for the advertising industry clearly specify the governments expectations from advertisers, agencies, and publishers. In February 1995, the SAIC began enforcing the regulations by taking 90 advertisements off the air (Miao 1995). CHINESE CULTURE AND ITS IMPACT ON ADVERTISING REGULATION A number of cultural issues affect advertising strategy in China, including the impact of socialist values, wariness of Western culture, the balance between utilitarian and hedonic values, protection of political ideology and stability, respect for traditions, and the conservative nature of the Chinese culture. Socialist Values Marxist philosophy views advertising as a necessary evil tool of capitalism. Marx believed that under socialism, the market would produce enough goods and services to satisfy consumer demand and that advertising was therefore
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unnecessary. When the Communist Party came into power in 1949 under Mao Zedong, China remained closed to most types of advertising. In 1979, with Deng Xiopeng coming into power, a new consumer era was born. In addition to opening Chinas trade doors to the world, Dengs policies advocated a more capitalistic approach toward advertising. Economic reforms provided an opportunity for many foreign businesses to enter this immense market. Today, the old socialist values exist, albeit in a diluted form, and firms must be mindful of this when advertising in China (Deal 1996; Miao 2000). While service and manufacturing operations have achieved independence from military and provincial governments (Roberts, Prasso, and Clifford 1999), consumers have been slower to embrace capitalistic market values (Advertising Age International Supplement 1997; Carroll 1997; Erickson, Naham, and Seawright 1997). Wariness of Western Culture As with other cultures, Chinas values are transmitted through social institutions such as family, school, and religion (Chen 1995; Cheng 1994). Due to its isolation from the world for decades, China differs in many ways from Western societies in terms of its non-capitalistic cultural values. In Chinas traditional setting, Western style advertising is seen as a spiritual pollution by many Chinese (Swanson 1990). While some advertising agencies have privately criticized the new regulations, many Chinese managers strongly support them because they see them as a tool for a fair market-socialist business environment (Curry 1988; Schell 1994). First exposed to foreign advertising and cultural values in the 1920s, the past decade provided China a second look at global cultural issues on a scale much vaster than ever before (Wang 1997). Utilitarian versus Hedonic Focus Socialistic Chinese culture between 1979-1985 have emphasized utilitarian values that reflect basic physiological needs such as food, shelter, and clothing over hedonistic values that reflect pleasure and satisfaction (Tse, Belk, and Zhou 1989). Preserving these utilitarian values was seen as the governing ideas and the guiding principles for the thoughts and actions of the Chinese government in its regulation of advertising (Cheng 1994). This has sometimes led to the criticism that advertising creativity has been stifled (Miao 1993, 1995). After years of isolation, the average Chinese consumer was naive about Western advertising. This was clearly reflected by the majority of ads published in China during the early 1980s. Unlike the sophisticated and creative Western way of advertising, Chinese consumers demanded informative, easy to understand, honest, and direct advertisements. The dominant contents of
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typical Chinese advertisements were product, price, and financial performance information about the company (Pollay, Tse, and Wang 1990). However, during the last decade with an increase in living standards, the Chinese consumer has slowly warmed to hedonic appreciation. While regulations stressing information and utility are still enforced by the government, they too are acquiring a tolerance for aesthetics in advertising. The Chinese government does not permit the same level of hedonism in advertising as in the U.S.; rather, appeals to art, warmth, and beauty are encouraged. According to Chan (1995), in recent years the Chinese have become more experienced as consumers, and their buying behaviors have consequently Westernized (Asiaweek 1996; Brand Strategy 1996). The content of ads has changed from product centered to audience centered, with the theme stressing modern lifestyle and ideal self image (Chan 1995). The trend appears to be moving away from information and toward emotion (Cheng 1994). An example is a common ad for a washing machine that promotes the love that a husband can bestow upon his wife by purchasing her the product. The same ad contains no direct product information (Chan 1995). Increasingly, ads in China are using such appeals as happy family life, the enjoyment of leisure, and status appeals (Cheng 1994; Madden 2000). Protection of Political Ideology and Stability During the early 1980s, the Chinese government feared that advertising could create increased materialistic demand among its people, leading to higher expectations and political impatience. Some regulations in effect during the early 1980s ensured that a heavy emphasis was placed on advertisements that supported socialism, while prohibiting ads that contained any slanderous, discriminatory, or untruthful content. The 1990s have witnessed a relaxing of political ideology as the focus for promotions and greater emphasis on product features and performance (Asiaweek 1997; Healy and Hsieh 1998). Yet politics still influences advertising practice. For example, Coca-Cola withdrew a multimillion dollar campaign featuring a popular singer who had sung the Taiwan national anthem at the countrys presidential inauguration. Since China considers Taiwan to be a rebel province, this commercial would have supported dissidence (Lee 2000). Respect for Traditions The Chinese are still very culturally sensitive people and are therefore easily offended by those who disrespect their traditions. Cultural sensitivity dictates the ban on the use of some symbols in advertising (Pollay, Tse, and Wang 1990; Taninecz 1997). For example, dragons and ghosts are banned from use because they have spiritual meanings for the Chinese people. The use of flags
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and maps or any association with national symbols (past or present) in ads is seen as an insult, and potential threat to the state, and is prohibited (Pollay, Tse, and Wang 1990). Conservative Culture The cultural values of Chinese consumers can be classified as conservative (Ford, LaTour, and Henthorne 1995), although like most countries, interior residents are more conservative than coastal consumers (Bates 1998). The use of sexual references in ads is considered offensive by Chinese society and government. For example, the government pulled a recent safe sex ad after it aired only one day, citing a national law forbidding the advertisement of sex-related products. The ad focused on the utility of condoms and ended with a rhyme in Chinese that translated to Condoms, no trouble (Zwillich 2000). Even immodesty may be considered unsuitable for mass media. Television models must be covered 15 centimeters above the knee and below the neck, eliminating advertising for underwear, swimwear, and much athletic apparel. ADVERTISING STRATEGIES IN CHINA WITHIN THE BOUNDS OF REGULATION AND CULTURE Planning an effective advertising strategy in China that is in harmony with government regulations, can be a complicated task. An old Chinese proverb says: The best way to get into China is with a slow boat (Reaves 1985). Firms planning to advertise in China must be patient and adhere to the formalities required to satisfy regulations set by the Chinese government. When China first opened its doors to foreign companies in 1979, Japan responded quickly, and several Japanese companies penetrated the Chinese market by establishing strong brand images for their products through advertising. However, because of their speed in entering the market, they inadvertently violated several laws (e.g., the 1979 governmental ban on the advertising of foreign goods outdoors) and had to face the consequences later (Bolton 1979). Advertisers must carefully research the regulatory characteristics of China in order to develop an effective and legal advertising campaign. The regulations may seem petty, illogical, and even ridiculous at times to foreign advertisers, but they exist. Government regulatory agencies can be more strict with foreign advertisers than with domestic firms (Jen 1995). The following section suggests regulation-related strategies for companies planning to advertise in China. Familiarity with Regulations With a population that is unfamiliar with sophisticated advertising techniques, government regulations will be in place because of a lack of confi-
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dence in industry self-regulation. Advertisers in China must be thoroughly familiar with advertising regulations and with their interpretations. Familiarity with the implementation at the local AIC level is necessary because different AICs often have different standards. Experts suggest that advertisers keep regulations firmly in mind throughout the entire design and implementation of promotional materials to be used in China. Commercials approved in storyboard form have been rejected after final edit. Previously approved commercials have been censored after being broadcast. The SAIC is trying to standardize the censoring process (Xinhua News Agency 2000a), but cultural diversity across Chinese provinces makes this a challenging project. Regional Regulation Strategy Chinas 31 provinces have a combined population of around 1.3 billion people, over 50 different nationalities, hundreds of different subcultures, and many dialects. The regulatory agencies in these provinces often have different interpretations of the law. Because of this, creating a national advertising strategy in China can be a formidable task (Baiyi 1990). National advertisers often have to use different versions of their ads for different regions, and sometimes even different media (Holmes 1999; Miao 1995). For example, ad time per hour is not restricted through regulation on radio as it is with TV (Billings-Yun 1985). The major challenge, however, is the differing interpretations of the law by different regional AICs. A commercial that is approved by the AIC in Guangzhou, for example, may not pass in Beijing. Punishment for the violation of advertising regulations can also vary across provinces (Miao 1995). So the advertiser or agency must be certain to obtain approval from each local AIC office, as well as the general SAIC office, before carrying out a national campaign (Swanson 1990). As China becomes more decentralized, the provinces are becoming more legitimate in their decisions (Swanson 1995) and therefore more of a law unto themselves. One way to overcome this challenge is to enter the Chinese market by going through major provinces such as Beijing, Guangzhou, or Shanghai, where the implementation of regulations is more consistent, as compared to the smaller and less known regions (Baiyi 1992). Also, since the advertising industry is more developed in these larger provinces than in the rural areas, the information available to the advertising agent in terms of the application of laws is more accurate. Many firms have succeeded by concentrating on the big cities like Guangzhou, Shanghai, and Beijing (Baiyi 1992), and later expanding into the smaller provinces, with the security of knowing that their ads have met the requirements in the large markets.
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Corruption and Risk Corruption in the huge bureaucracy that governs China is another problem for advertisers. The extent of this problem is shown in a survey of business people who report that China is among the most corrupt places in the world to do business (Transparency International 2000). Corruption typically takes one of these forms: demands for the payment of unauthorized fee; payment for services that should be provided as part of a bureaucrats job; or a payment or kickback for awarding a business contract. Advertisers must be aware that although it is not illegal to give small gifts to expedite permits, licenses, or other official actions, it is illegal to pay officials to secure a business contract (Weldon and Vanhonacker 1999). It is estimated that the cost of corruption is about 2% to 3% of Chinas gross domestic product. In addition, the poor transparency of Chinas economy, due in part to corruption, makes investment there riskier, effectively adding a 13-percent-point risk premium to loans or imposing a 46% tax (Chen and Chung 2001). Evidence Supporting Claims Chinese consumers still carry some baggage from the past regarding the misconception that only bad products need to be advertised and that good products will sell themselves (Liang and Jacobs 1994). This may be based on experiences from the pre-regulatory days that gave Chinese consumers a reason to distrust advertisements. The importance of truth in advertising to the Chinese government is emphasized in the advertising laws of 1982, 1987, and 1995. In most cases, it is necessary to provide supporting evidence for the message content (Aab, Johnston, and Lohtia 1995). Chinas advertising regulations stipulate that straightforward and honest information is the goal of advertising (Zhou and Belk 1993). The Chinese government rarely tolerates any kind of real or perceived advertising dishonesty (Advertising Age 1994; China Economic News 1994). Marketers must use great care to ensure that the campaign is beyond reproach regarding information about the product. Because much advertising material must be examined by agencies or government authorities for truthful content, advertisers should use an initial strategy that is in harmony with the regulations to safeguard against having to redo their campaign. Patience with the Process The process of obtaining the necessary approvals and certifications from different agencies is time consuming and laborious. Advertisers should expect this and have the patience necessary to persevere. The advantages thought to
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accrue to the first mover may be less evident in China if early entrants fail to follow both the letter and spirit of advertising regulations. Consistent, patient investment seems to be the only way to attract the Chinese consumer (Hexter, Perez, and Perkins 1998; see, also, Wang, Wee, and Koh 1999) and to comply with regulations. Cultural Sensitivity Sensitivity to the local culture may help to avoid regulatory problems. Certain appeals that may pass Western advertising regulations may not pass in China because of regulatory restrictions based on culture (Gage 1982; Ha 1996). The Chinese are very sensitive in terms of their culture and values and are easily offended by ads that debase them. For example, although the government did not explicitly ban the use of sex in advertising, it did prohibit the use of any content that does not conform to the public and professional ethics of the State and safeguard its dignity and interest (Article 7). A firm utilizing a single global image (see, e.g., Alden et al 1999, Cheng and Schweitzer 1996) risks offending Chinese consumers with images that are acceptable elsewhere. Advertisers must take care to understand how cultural, legal, and economic differences may influence consumers response to sales promotions (Alden, Steenkamp and Batra 1999). Combined with centuries of tradition is a rising consumer culture emphasizing product quality, consumer respect, and information rather than imagery (China Economic Review 1999). Foreign firms may be even more vulnerable to consumer rights claims than domestic firms because of the history of dubious behavior of non-Chinese companies. Political Sensitivity Because advertising is still seen as a tool of capitalism, the Chinese government feels that ads that incorporate any kind of map or national flag, emblem, or anthem have the potential to be used as propaganda against the State and can be harmful to the social and public order of the Chinese people. Also, the Chinese government views advertising as a kind of drug, both useful and dangerous, and therefore sees another reason to control and regulate it (Hong 1994). These political and ideological beliefs influence the advertising industry directly by limiting the creative scope available to advertising agencies. Advertising is a privilege in China, not a basic communications right. The government has updated advertising rules more than 30 times within the past five years (Lee 2000). These rules are strictly enforced because the government considered that all advertising should be monitored carefully for their political and social influence.
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Sensitivity in Translation The correct translation of foreign ads into Chinese is an obvious necessity for a successful advertising campaign. The government does not hold advertisers responsible for incorrect translation of their ads, but does hold them accountable for incorrect specifications or product information (Article 9). Advertisers must have the necessary resources for the perfect translation of advertisements to ensure that no false promises, exaggerations, or wrong information is conveyed through the translation. To safeguard against such mistakes, the agency should use only translators that are privy to Chinas values, sensitivities, and regulations, and to the individual ads message. An additional check is to translate ads from Chinese back to their original language to be sure that the back-translation reads identically to the original materials. This was a major concern for Amoco Oil when it entered China in 1981. Amocos creation of honest and correct advertisements earned them the governments confidence (Gage 1982), a highly-valued asset in China. Documentation and Approvals An advertising agency is forbidden to work on any ads that do not have the appropriate approval from the relevant departments and AICs. The advertising regulations placed an increased importance on documentation and approvals. Certain industries such as pharmaceuticals, medical materials, chemicals and drugs are given special privileges because of the additional paperwork they require (Cappo 1999; Miao 1995). Building documentation into ad strategy may be tedious, but it will safeguard the advertiser from lost time and resources if the authorities ever decide to do a paperwork audit. Furthermore, if the authorities recognize a company to be respectful and lawful, they will be less likely to look for problems. Guanxi Contacts Relationships (guanxi) with government officials are often a critical part of advertising in China. Experienced advertising agencies understand that guanxi could be critical (Fox 1987) and could mean the difference between an ad being approved or rejected. Guanxi is based on mutual dependence and is also important in social contacts (Liang and Jacobs 1994). Guanxi differs from bribery since it is not a one-time practice between the participants. Personal favors usually constitute the basis of the relationship, and loyalty is a major requirement (Liang and Jacobs 1994). Cultivating and developing the advertisers guanxi is simply a part of business success in China (Luo 1995).
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Joint Ventures Because advertising regulations in China can be complicated for the naive firm, foreign agencies might be wise to form joint ventures with domestic ones. This would help foreign agencies understand the bureaucratic labyrinth of the Chinese government (Swanson 1990). Joint ventures help foreign companies form relationships with other firms and acquire feedback and data on Chinese consumers (Burpee 1996; Yamazaki 1997). The joint venture is not a new idea to Chinese agencies. In 1979, the Japanese advertising agency Dentsu came to China, starting a joint venture in Beijing. Following the cue of the Japanese, many major American names such as Ogilvy & Mather, Interpublic-Jardin, Young & Rubicam, and Saatchi & Saatchi also entered the Chinese market through joint ventures (Baiyi 1992). Product-Specific Strategies Tobacco and alcohol have always been taboo with the Chinese government and have thus come under heavy regulation and control (Horovitz 1987). The main reason for regulating cigarette and alcohol advertising is to keep the Chinese population, especially Chinese youth, away from unhealthy products (Brauchli 1994). For example, RJRs Joe Camel mascot received criticism because of the likelihood that the animated cartoon appealed to the younger generation (Brauchli 1994). Regulations regarding the control of alcoholic beverages started in 1982 when the government prohibited the advertising of liquors with an alcohol content greater than 80% proof (Billings-Yun 1985). In 1987 the government relaxed the law by granting famous and high-quality liquor brands permission to advertise if they had approval from the SAIC (Baiyi 1990). The government is even more stringent with tobacco advertising. Since 1982 regulation has continued to tighten on cigarette advertising. Before this, it was common to see the Marlboro man riding across Chinese television screens (Reaves 1985). The 1982 bans forced tobacco companies to cease promoting their products through the mass media. Tobacco companies responded by using other strategies, such as sponsoring sports events in China (Lam 1994; Middle East News Items 1998). In 1995 the government introduced legislation limiting the display of tobacco ads at sports events. Philip Morris, in order to display its Marlboro brand, sponsored sports events such as soccer, badminton, and table tennis. Using the Marlboro name, Philip Morris sponsored twelve soccer teams of the Chinese national league (Lam 1994). The strategy was so successful that the professional league changed its name to the Marlboro League (Brauchli 1994). The 1995 regulations banned the use of any displays by the sponsor tobacco companies (Article 18). But after strongly lobbying the Sports Ministry, com-
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panies were permitted to have a single banner with the brands name at sports events (Keenan 1995). Although the Health Ministry does not agree with the available advertising practices for cigarette companies, tobacco sponsorship plays an important role for the Chinese Sports Ministry and for the future of Chinese athletes (Keenan 1995). Activities that appear to be in the interest of sports are therefore sometimes given priority. Regulations imposed on cosmetics advertising is of growing interest to companies in China because the percentage of fashion conscious women has risen significantly over the last decade (Shao 1988). Brands such as Revlon, Max Factor, Mary Quant, and Christian Dior continue exposing the fashionable woman image in the Chinese media and billboards (Shao 1988). Once the relevant documentation and approvals are obtained, advertising companies should make the most of the aforementioned curiosity by creating strategy around image. Cosmetic campaigns need not portray the ideal Chinese woman looking and acting like a fashionable Westerner. Rather, the campaign should subtly hint at Western glamour while having an overriding tone of Chinese values such as harmony with others and the earth, beauty, youth, and purity (Lam 1998). Media Options All modes of expression are strictly regulated by the government in China. Fifty percent of the professional staff working for the media are members of the Communist Party (Schmuck 1987). Regulation of advertisements serves to affirm the governments agenda and limit the time spent on airing advertisements. Television. Television is considered one of the most politically sensitive media in China because of its approximately 600 million viewers. China has one national and over 750 regional television stations that accept advertising from both domestic and foreign advertisers (Baiyi 1990). For advertisers, television is mainly seen as a way to increase brand recognition (Baiyi 1992). Although the Chinese governments control of advertising on television may be strict on certain issues, such as cigarette and alcohol advertising, companies can find ways through the maze. As one advertiser in China explains, regulations are for the obedience of the fool and the guidance of the wise men (Billings-Yun 1985). Advertisers should be cautious with testing the regulations strategies. They involve considerable risk and can backfire if audiences are offended. The agent would have to be very familiar with all related regulations and have an impeccable knowledge of Chinese culture and values. Advertising schedules in China are quite different from Western schedules. For example, the government only allows commercials at the beginning and end of programs and no
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more than five minutes of advertising per hour (Hong 1994). Advertising in China also involves longer segments with many short ads shown in sequence, some as short as five seconds. The messages in the middle of this stream are likely to be ineffective (Yamazaki 1997). Radio. Radio has a wider range and can reach more people in China than television advertising. China has over 1,200 regional and national radio stations (Baiyi 1992). For years, radio has been the most politicized medium and thus the most controlled (Billings-Yun 1985). Similar to television, radio advertising is restricted for certain products, e.g., tobacco and alcohol. Radio stations have the right to review and clear ads by the local government authorities prior to broadcasting (Billings-Yun 1985). Unlike television, radio ads can run in local dialects, advantageous because many listeners are from areas with high illiteracy rates (Baiyi 1992). The amount of radio advertising broadcast time is not restricted (Billings-Yun 1985). Print Advertising. Print advertising is the least restricted medium in China. Magazines, including trade journals from different industries, are very popular among the Chinese people. Full color magazine ads are prohibited as are ads on the front page (Billings-Yun 1985; Reaves 1985, 1987). Compared to magazines, newspapers are more controlled, although the implementation of restrictions depends upon the paper. The Peoples Daily, a publication of the Chinese Communist Party, is more strictly controlled than the China Daily, an English-printed national newspaper (Baiyi 1990). No more than one page in four can be used for advertising in the Peoples Daily, and no ad may take up more than one-half a page (Billings-Yun 1985). Outdoor Advertising. The Chinese government feels that outdoor advertising reflects the capitalistic values of the West. When China opened its trade doors in 1979, many companies used outdoor advertising to establish product recognition. In 1985, the government restated its advertising restrictions, focusing exclusively on outdoor advertising. One manifestation of this restriction was the removal of Sonys outdoor board from Beijings busiest street (Reaves 1986). The primary issue is the prohibition of any ad that would affect the productivity or lives of the Chinese people or that would be harmful to the view of the city. Internet Advertising. The potential growth for Internet advertising in China is staggering (see, e.g., Asia Pulse 2000b; Creed 2000; Quest Economics Database 1999). A study by Deloitte Touche Tohmatsu (AAP Newsfeed 2000) estimates than China has 16.9 million Internet users from a population of nearly 1.3 billion. This same source identified 3,700 Chinese websites in July 1998 and more than 27,000 two years later. The initial reaction of the Chinese government has been to regulate Internet advertising by promulgating regulations for market entry and licensing, particularly in major cities (AFX-Asia 2000; Asia Pulse News 2000a). At present, Internet advertising developed within
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China is simple, consisting primarily of banners and icons (China Daily 1999b), in contrast to the breadth and variety of Internet advertising outside of China. Informative Advertising The government, through its regulations, advocates the use of factual ads backed by statistics. Past research that studied a series of successful ads published in China focused on the interaction between information in ads and consumers attitude towards them. The results showed that information was an essential element of the successful ads, suggesting that foreign advertising strategy should focus at least in part on information. Other studies have shown that the majority of Chinese people rate their domestic ads negatively due to a lack of artistic, pleasant, amusing, and intelligent content, and find them easy to forget; but they still ask for more information in advertising (Zhao and Shen 1995). Visual and Descriptive Appeals Traditional regulations emphasize honest information about products, while representing a hardworking and simple lifestyle to help secure the socialist values of China (Pollay, Tse, and Wang 1990). However, with the introduction of such advertising firms as Interpublic-Jardin and Saatchi & Saatchi, China has witnessed an advance in advertising technology and improved advertising and marketing techniques that have allowed modern advertising to establish roots in China (Baiyi 1992). Ads have maintained their informative characteristics, and the use of visual and descriptive appeals have made ads more lively and appealing. Advertising techniques that create a personality for the product are considered to be one of the best approaches for advertising in China. Examples include the successful ad for V-Corn cooking oil that used baseball players to link a healthy life style to the oil and a Nescafe commercial that showed two friends playing saxophone together to associate sociability with the product (Karp 1993; see, also, Klein, Ettenson, and Morris 1998). Company Image The Chinese government sees advertising claims as long-term commitments made to the Chinese economy, and the Chinese people believe that a firms history, stability, and size reflect a products reliability. Chinese consumers prefer to do business with a company that they know and can trust (see, e.g., Aab, Johnston, and Lohtia 1995; Papavassiliou and Stathakopoulos 1997).
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Comparative Advertising Competition in China, in terms of quality and service, is encouraged by the government. However, advertising regulation prohibits the use of comparative advertising as a tool to defame competitors. Pepsi-Cola and Coca-Cola devised advertising strategies without the use of comparison. They took their long-time competition to China in the early 1980s and differentiated themselves with the slogans PepsiDelicious and Refreshing Taste and Id Like to Buy the World a Coke (Advertising Age 1986; Shao 1988). Many agencies see China as a very competitive market, so advertisers are intent on establishing and maintaining competitive advantages for their clients. The prohibition of comparative advertising should not be perceived as totally bleak according to Miao (1995). He maintains that competitive approaches are unnecessary when a market is shifting and that China has enough business for everyone (Miao 1995). CONCLUSIONS Advertising in China involves paying close attention to cultural and regulatory influences unique to the country. While advertising is deemed useful, Chinese cultural values prevent the utilization of Western promotional themes that stray too far from informative advertising. To enforce respect of cultural values, the regulatory environment in China continues to expand in order to deal with the influx of imported products and associated advertising programs. Advertising regulations are detailed and enforced quickly, though not uniformly throughout China, with little opportunity to appeal regulatory decisions. Suggestions for marketers are as follows: (1) keep regulations firmly in mind when doing business in China, (2) enter the Chinese market through major provinces first, (3) always provide evidence supporting the claims to your ads, (4) have patience with the process, (5) be culturally and politically sensitive (6) deliver accuracy in foreign ads translation, (7) provide the appropriate documentation and approvals, (8) maintain healthy relationships (guanxi) contacts with government officials, (9) be aware of corruption, (10) form joint ventures with domestic agencies, (11) acquire relevant documentation and approvals for taboo products such as tobacco and alcohol, (12) use caution with the different media options, (13) exercise informative advertising campaign, (14) apply visual and descriptive appeals, (15) safeguard a trustworthy image, and (16) disregard comparative advertising in China.
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SUBMITTED: October 2000 FIRST REVISION: January 2001 SECOND REVISION: April 2001 THIRD REVISION: September 2001 ACCEPTED: October 2001
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APPENDIX I Advertisements Law of the Peoples Republic of China CHAPTER I: GENERAL PROVISIONS Article 1 This law is formulated to regulate advertising activities, to promote the sound development of the advertising sector, to protect the lawful rights and interests of consumers, to maintain the social and economic order, and to let advertisements play an active role in socialist market economy. Article 2 Advertisers, advertising agents and advertisement publishers engaged in activities relating to advertising within the territory of the Peoples Republic of China, shall abide by this law. In this Law: advertisement is defined as any commercial advertisement which a supplier of goods or services pays for, to introduce their goods or services whether directly or indirectly through the media in all its forms to Public at large; advertiser is defined as any legal person, other economic organization or individual, who with the purpose of the sales of commodity or services, designs, produces and publishes advertisements either directly or acting through agents; advertising agent means any legal person, other economic organization or individual who acts as an agent in the design and production of advertisement, advertisement publishers means any legal person or other economic organization who publishes advertisements on behalf of advertisers or advertising agents. Article 3 Advertisements must be factual and lawful, and comply with the principles of advancing socialist culture and ideology. Article 4 Advertisement must not contain any information which is false and or misleading so as to deceive the consumers. Article 5 Advertisers, advertising agents and publishers engaged in advertising activities shall act according to law and administrative regulations in a spirit of fairness and integrity.
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APPENDIX I (continued) Article 6 The administration departments for industry and commerce of the peoples governments at or above the county level shall in relation to advertising activities be the control organs and act in a supervisory capacity. CHAPTER II: CONTENTS OF ADVERTISEMENTS Article 7 The contents of advertisements shall lead towards the physical and mental health of the people, promote the improvement in quality of goods and services, protect the lawful rights and interests of consumers, comply with social morality and professional ethics, and safeguard the dignity and interests of the state. Advertisements may not contain any of the following: 1. the national flag, national emblem or national anthem of the Peoples Republic of China, 2. the names of state organs or names of staff of state organs, 3. such words as the state-level, the highest-level or the best, 4. matters hindering social stability or endangering the safety of life or property, or harming the public interest, 5. matters hindering the public order or violating good social customs, 6. pornographic, superstitious, horrid, violent or unpleasant matters, 7. ethnic groups, racial, religious or sex discrimination matters, 8. matters hindering environmental and natural resources protection, and 9. matters that are prohibited by laws and administrative regulations. Article 8 Advertisements may not impair the physical and mental health of minors and the disabled. Article 9 Statements in advertisements of the performance, origin of production, use, quality, price, producer and manufacturer, valid term and promise, and services items, manner, quality, price and promise of the goods advertised shall be clear and explicit. An advertisement, in which gifts are incentives in promoting the sales of goods or providing services, shall state the type and quantity of gifts to be given free. Article 10 Data, statistical information, investigation and survey information, digest and quotes used in an advertisement shall be factually true and accurate, and their sources mentioned.
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Article 11 An advertisement involving patented goods or patent methods shall clearly indicate the patent number and type of patent. Products which have not been patented shall not be passed off as being pretended. The use of unsuccessful patent applications or those which have been terminated, nullified or invalidated in advertisements is prohibited. Article 12 An advertisement may not belittle the goods or services of other producers and manufacturers or operators. Article 13 An advertisement shall be distinguishable, and make consumers identify it is an advertisement. The mass media may not publish advertisements in the form of news reports. An advertisement published through the mass media shall bear the advertisement mark to distinguish it from news items so that consumers may not be misled. Article 14 Advertisements relating to pharmaceutical and medical apparatus and instruments may not contain the following: 1. unscientific information, statements or promises on their efficacy; 2. the rate of cures or efficacy; 3. comparing efficacy and safety with other medicines and medical apparatus and instruments; 4. the name or image of a medical research unit, academic organization, medical unit or expert, doctor or patient, and 5. any other information as may be prohibited by laws and administrative regulations. Article 15 The contents of advertisements for pharmaceuticals must conform to the standard instructions approved by the public health administrative department under the State Council or public health administrative departments of provinces, autonomous regions and municipalities directly under the Central Government. Advertisements for therapeutic pharmaceuticals which are to be used on physicians advice as directed by the State must be marked purchase and use on physicians prescription. Article 16 Special pharmaceuticals such as anesthetic, narcotic, psychotropic, toxic and radioactive drags may not be advertised.
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APPENDIX I (continued) Article 17 Advertisements for agricultural chemicals may not contain the following: 1. claims of its safety such as non-toxicity or non-harmlessness, 2. unscientific affirmations or promises indicating its effectiveness; 3. characters, words or pictures that violate the regulations on the safe use of agricultural chemicals; and 4. such other matters which are prohibited by law and administrative regulations. Article 18 The publication of advertisements relating to tobacco or tobacco products through radio, cinematography films, television, newspapers, magazines or periodicals is prohibited. Erecting or placing advertisements for tobacco or tobacco products at public places such as waiting rooms, cinemas, theaters, conference halls and sports stadiums and gymnasiums is prohibited. Advertisements for tobacco or tobacco products must contain this warning: Smoking is harmful to your health. Article 19 The contents of advertisements for foods, alcoholic drinks or cosmetics must comply with the conditions in the relevant hygiene license and no medical jargons or words may be used so as to confuse them with pharmaceuticals. CHAPTER III: ADVERTISING ACTIVITIES Article 20 Advertisers, advertising agents and advertisement publishers shall, in their advertising activities, enter into written contracts with their clients, stipulating explicitly each partys rights and obligations. Article 21 No advertiser, advertising agent or advertisement publisher may make unfair competition of any form in their advertising activities. Article 22 An advertiser, either by itself or through an agent, to design, produce or publish advertisements to promote the sales of goods or to provide services shall act within its business scope. Article 23 An advertiser shall, in commissioning the design, production and publication of advertisements, appoint an advertising agent or advertisement publisher with legal business status.
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Article 24 An advertiser shall, in designing, producing and publishing advertisements either by itself or through agents must provide true, lawful and valid documentation as follows: 1. business license and other papers and documents related to production and qualification for operation, 2. documents and papers issued by quality certification organs for the content of goods to be advertised, 3. other documents and papers to confirm the truth of the content of advertisement. Where, pursuant to the provisions of Article 34 of this law, publishing of an advertisement requires it to be examined by the relevant competent administrative departments, relevant documents and papers of approval shall also be provided. Article 25 Any advertiser or advertising agent shall, if using the names or images of others in advertising, obtain in advance their written consent, and if using the names or images of persons with incapacity for civil action or with limited capacity for civil action, obtain in advance the written consent from their guardians. Article 26 Those engaged in the advertising business shall have the required professional and technical personnel and production equipment, register their company or advertising business according to law, and only after that, may they engage in advertising activities. The advertising business of radio stations, television stations, newspaper or magazine and periodical publishing units shall be handled by their own departments specialized in advertising, and registration of their additional advertising business shall be made according to law. Article 27 Advertising agents and advertisement publishers are to check relevant documentation and to examine and verify the contents of advertisements in accordance with law and administrative regulations, shall an advertisement with untrue matters or without the required documentation, no advertising agent may provide services in designing, producing and serving as agent and no advertisement publisher may publish such advertisement. Article 28 Advertising agent and advertisement publishers, according, to relevant state regulations, shall establish and perfect the system on acceptance registration, examination and verification, and keep management record of their advertisement businesses.
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APPENDIX I (continued) Article 29 Advertising charges shall be reasonable and made known to the public, the charging standards and measures shall be registered with the administrative departments in charge of price and industry and commerce for record. Advertising agents and advertisement publishers shall make public their charging, standards and measures. Article 30 Advertising publishers shall provide true information on media coverage, audience rate and circulation to advertisers and advertising agents. Article 31 Where goods or services are prohibited by laws and administrative regulations from being produced and manufactured, such goods or services shall not be advertised and no advertisement therefore shall be designed, produced and published. Article 32 No outdoor advertisement may be erected or placed in any of the following areas: 1. traffic safety facilities or traffic signs and marks, 2. where the use of public utility facilities, traffic safety facilities or traffic signs and marks may be affected or obstructed, 3. obstructing peoples livelihood or production of goods, or damaging the appearance or environment of cities, 4. construction control areas of the state organs, cultural relics protection units or scenic sites; and 5. where the peoples governments at or above the county level have designated such areas as are prohibited from outdoor advertisements being erected or placed. Article 33 The peoples governments at or above the county level are, by organizing relevant departments such as advertising supervision and control, urban construction, environmental protection and public security, to plan and institute measures for the control of erection and placing of outdoor advertisements. CHAPTER IV: ADVERTISEMENT EXAMINATION Article 34 With respect to advertisements for such pharmaceuticals, medical apparatus and instruments, agricultural chemicals or veterinary drugs, which are published through the radio, cinematography film, television, newspaper, mag-
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azine, periodical and other media, and other advertisements which, as provided by law and administrative regulations, are subject to examination, the relevant competent administrative departments (hereinafter referred to as the advertisement examination organ) must examine and inspect, prior to their publication, the contents of advertisements in accordance with the relevant law and administrative regulations; no such advertisement which is not examined and approved may be published. Article 35 An advertiser shall, when applying for advertisement examination, submit relevant documentation to the advertisement examination organ according to law and administrative regulations. The advertisement examination organ shall, pursuant to law and administrative regulations, make a decision for examination. Article 36 No unit or individual may counterfeit, alter or transfer the document containing the decision on the advertisement examination. CHAPTER V: LEGAL RESPONSIBILITY Article 37 Where, in violation of the provisions of this Law, false and misleading publicity on goods or services is made by using an advertisement, the advertising supervision and control organ shall order the advertiser to stop publishing of the advertisement and to use an amount equivalent to its advertising expenses to publish a correction to counter the influence generated by the false and misleading advertisement, and impose on the advertiser a fine of not less than the amount of its advertising charges but not more than an amount equal to 5 times the said charges; confiscate the advertising charges of the advertising agent and advertisement publisher responsible and impose upon them a fine of not less than the amount of its advertising charges but not exceeding five times the amount of its advertising charges; and in a serious case, prohibit them, according to law, from carrying on advertising businesses. Where the act constitutes a crime, it shall be investigated according to law. Article 38 Where, in violation of the provisions of this law, publication of a false and misleading advertisement affects consumers, there by causing an infringement and damages to their lawful rights and interests who purchase the goods or accept the service, the advertiser shall be liable civilly in law whilst the advertising agent and advertisement publisher, who have knowledge of or are deemed to have such knowledge of the falsity of the content of the adver-
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APPENDIX I (continued) tisement, but continue to design, produce and publish it, shall be jointly liable according to law with the advertiser. The advertising agent or advertisement publisher, who fails to provide the real name and address of the advertiser, shall bear full civil responsibility. A social organization or other organizations, which recommend goods or services to consumers in a false and misleading advertisement and consequently causes infringement and damage to the lawful rights and interests of consumers, shall also bear joint responsibility in law. Article 39 Where publishing of an advertisement violates the provisions of Article 7, Paragraph 2 of this law, the advertising supervision and control organ shall order the advertiser, advertising agent and advertisement publisher, which are responsible for the advertisement, to cease publication of the advertisement and to publish a correction, confiscate their advertising charges, and impose a fine of not less than the amount of its advertising charges and not less than five times the amount of its advertising charges; and in a serious case prohibit them, according to law, from carrying out any advertising businesses. Where the act constitutes a crime, it shall be investigated according to law. Article 40 Where publishing of an advertisement violates the provisions of Article 9 to Article 12 of this law, the advertising supervision and control organ shall order the advertiser, advertising agent and advertisement publisher, which are responsible for the advertisement, to cease publication of the advertisement and to publish a correction, confiscate their advertising charges, and may impose a fine of not less than the amount of its advertising charges and not more than five times the amount of its advertising charges. Where publishing of an advertisement violates the provisions of Article 13 of this law, the advertising supervision and control organ shall order the advertisement publisher to publish a correction, and impose a fine of not less than 1,000 yuan and not more than 10,000 Yuan. Article 41 Where, in violation of the provisions of Article 14 to Article 17 and Article 19 of this law, an advertisement for pharmaceuticals, medical apparatus and instruments, agricultural chemicals, foods, alcoholic drinks or cosmetics is published, or, in violation of the provisions of Article 31 of this law, an advertisement is published, the advertising supervision and control organ shall order the advertiser, advertising agent and advertisement publisher, which are responsible for the advertisement, to publish a corrections or to cease publication of the advertisement, confiscate their advertising charges,
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and may also impose a fine of not less than the amount of its advertising charges and not more than five times the amount of its advertising charges; and in a serious case is, prohibit them, according law, from carrying on any advertising businesses. Article 42 Where, in violation of the provisions of Article 18 of this law, an advertisement for tobacco or tobacco products published through radio, cinema pictures, television, newspaper, magazine or periodical, or an advertisement for tobacco or tobacco products is erected and placed in a public place, the advertising supervision and control organ shall order the advertiser, advertising agent and advertisement publisher, which are responsible for the advertisement, to cease publication of the advertisement, confiscate their advertising charges, and may impose a fine of not less than the amount of their advertising charges and not more than five times the amount of its advertising charges. Article 43 Where, in violation of the provisions of Article 34 of this law, the publication of an advertisement is not subject to examination and approval from the advertisement examination organ, the advertising supervision and control organ shall order the advertiser, advertising agent and advertisement publisher, which are responsible for the advertisement, to cease publication of the advertisement, confiscate their advertising charges, and impose a fine of not less than the amount of their advertising charges and not more than five times the amount of their advertising charges. Article 44 Where an advertiser furnishes false and misleading documentation, the advertising supervision and control organ shall impose a fine of not less than 10,000 yuan and not more than 100,000 yuan. Where any person counterfeit, alters or transfers documents containing the decision of an advertisement examination, the advertising supervision and control organ shall confiscate its illegal gains and impose a fine of not less than 10,000 yuan and not more than 100,000 yuan. Where the act constitutes a crime, it shall be investigated according to law. Article 45 Where an advertisement examination organ has made an examination and grants approval for the illegal contents of an advertisement, the person directly in charge and other persons directly responsible shall be subject to administrative penalties imposed by their units, superior organs or administrative supervisory departments according to law. Article 46 Any member of an advertising supervision and control organ or advertisement examination organ, who neglects his or her duty, abuses his or her office or
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APPENDIX I (continued) practices favoritism or other irregularities, shall be subject to administrative penalties, Where his or her act constitutes a crime, it shall be investigated according to law. Article 47 An advertiser, advertising agent or advertisement publisher, who, in violation of the provisions of this law, commits any of the following acts, shall be civilly liable in law. 1. advertising which impairs the physical and mental health of minors or the disabled, 2. passing off patents to which the said persons are not entitled, 3. belittling commodities or services of other producers and manufacturers or operators, 4. using the names and images of others in advertising without consent; or 5. other infringements of the lawful rights and interests of others. Article 48 A party concerned who is dissatisfied with an administrative penalty decision may, within 15 days from the date of receiving notice of the penalty decision, apply for a reconsideration to the next higher organ of the organ which made the administrative penalty decision; the party may, within 15 days from the date of receiving the notice of the penalty decision, also directly file a suit in a peoples court. The reconsideration organ shall, within 60 days from the date of receiving the application for reconsideration, make a reconsideration decision thereon. A party concerned which is dissatisfied with the reconsideration decision may, within 15 days from the date of receiving the reconsideration decision, file a suit in a peoples court. If the reconsideration organ fails to make a reconsideration decision within the time limit for reconsideration, the party may, within 15 days from the date of expiration of the reconsideration, file a suit in a peoples court. In the event of a party concerned failing both to apply for a reconsideration or to file a suit in a peoples court within the time limit, and to comply with a penalty decision, the organ which made the penalty decision may apply to a peoples court for enforcement. CHAPTER VI: SUPPLEMENTARY PROVISIONS Article 49 This Law shall come into force as of February 1, 1995. Should any provision related to advertising in any other laws and regulations prior to the coming
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into force of this Law be in effect and is inconsistent with any of the provisions of this Law, this Law will prevail. Adopted at the 10th session of the standing committee of the Eighth National Peoples Congress on October 27, 1994, promulgated by Order No. 34 of the President of the Peoples Republic of China on October 27, 1994, and effective as of February 1, 1995.

Advertising Strategy in China

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Advertising Strategy in China

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Advertising Strategy in China: An Analysis of Cultural and Regulatory Factors

Sunil Erevelles Fred Morgan Ilkim Buke Rachel Nguyen

JOURNAL OF INTERNATIONAL CONSUMER MARKETING

JOURNAL OF INTERNATIONAL CONSUMER MARKETING

JOURNAL OF INTERNATIONAL CONSUMER MARKETING

JOURNAL OF INTERNATIONAL CONSUMER MARKETING

JOURNAL OF INTERNATIONAL CONSUMER MARKETING

JOURNAL OF INTERNATIONAL CONSUMER MARKETING

JOURNAL OF INTERNATIONAL CONSUMER MARKETING

JOURNAL OF INTERNATIONAL CONSUMER MARKETING

JOURNAL OF INTERNATIONAL CONSUMER MARKETING

JOURNAL OF INTERNATIONAL CONSUMER MARKETING

JOURNAL OF INTERNATIONAL CONSUMER MARKETING

JOURNAL OF INTERNATIONAL CONSUMER MARKETING

JOURNAL OF INTERNATIONAL CONSUMER MARKETING

JOURNAL OF INTERNATIONAL CONSUMER MARKETING

JOURNAL OF INTERNATIONAL CONSUMER MARKETING

JOURNAL OF INTERNATIONAL CONSUMER MARKETING

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