Review of Administrative Structure & Laws- Regulations

The Advertising Industry in China

Presented by:

Richard L. WagemanLehman Lee & Xu

Beijing, Chinarwageman@lehmanlaw.com

www.lehmanlaw.com

Overview of China’s Advertising Regulatory

Structure

Business Revenue of China’sAdvertising from 1990-2005

Unit: a hundred million Yuan (RMB)

25. 017

273. 27

712. 66

20051990 1995 2000

1416. 05

0

500

1000

1500

年 年 年 年

ResourceResource ：： State Administration for State Administration for Industry and CommerceIndustry and Commerce

Global Advertising Market Share 2004

Others 25.8%

South Korea 1.8%

China 2.4%

Italy 2.7%

France 3.3%

Germany 5.3%

UK 5.4% J apan 10.7%

USA 42.6%

Functions of Advertising Administrative Organs

Administration, Law Execution

and Supervision

Formulate Administrative Rules

Administrative Investigation and

Disposal of Illegal Advertising

Prior Examination of

Special Advertising

Qualification Examination and

Approval of Operation of Advertising

Development Planning for

the Advertising Industry

Guide the Organizations within the Industry

Advertising Administrative Structure

……

State Administration for Industry and Commerce

Municipal AIC

AIC of Counties

AIC of Provinces and Municipalities directly under Central Government

………

……..

………

………

………

………

……

AIC of Counties AIC of Counties

Dept. of AIC

Dept. of AIC

Dept. of AIC

Dept. of AIC

Dept. of AIC

Municipal AIC

Dept. of AIC

Prior Examination of Advertising By Chinese Government Departments

MinistryOf Health

General Admin. OfPress & Publication

Propaganda Dept.Of Communist

Admin. of Radio, Film & Television

VI VII

MOA

IIII II

Food& Drug Admin.

Supervision over Advertising Market

State Administration forIndustry & Commerce

Local AIC VIV

Review Certificate on Advertising Consulting

ProductAgreement on ProductionNotice on

Preliminary examination

Advertisement Production

Idea

Certifying Documents

AdvertisementPresentation

Examination of the characters & images

Advertising Agency Media Advertiser

Comments & notice onpreliminary examination

China Advertising Association Consulting Procedure

Advertising Standards

Advertising Standards

Standards set out in the Advertisement Law of the P.R.C. and other related regulations:no pornography, superstition, terror,

hideousness or violation contentscontents discriminatory to ethnic

groups, race, religion and gender are prohibited

contents impairing physical or mental health of youth and the disabled are prohibited

Advertising Standards

tobacco advertisements are forbidden

no description of sexual activities, provocative sexual activity, or inappropriate focus on sexual characteristics

contents describing articles, and pharmaceuticals related to sexual matter are prohibited

contents in opposition to China's public interest and social stability are prohibited

Advertising Standards

contents shall be good for the people’s physical and mental health and enhance national spirits and cultures

Effective August 1, 2006, ads for pharmaceuticals, medical devices, breast enlargement, heightening and weight reduction were suspended on television.

Advertising Standards

Effective November 1, 2006, the following types of ads will not be allowed in newspapers and periodicals:medical ads related to sexual

diseases, cancer, abortion, HBV and other types of infectious diseases

ads promoting gambling skills ads introducing anesthesia types of

drug/technology that can be used in criminal activities

Advertising for Children

Advertising for Children

Advertisements of products whose target consumers are children

Advertisements that use child actors

Review Standards

Shouldn’t use child actors in advertisements for product that are not suitable for children

Use language that can be understood by children

The advertisement must not have the effect of lowering moral standards for children and must not show activities that may be dangerous for children to perform

Review Standards

Prohibits advertisements that may have a negative impact on education

Prohibits medical advertisements that use child actors, or that targets children consumers

Comparative Advertising

Comparative Advertising

Term “Comparative Advertising” is not specifically noted in the Advertising Law

Advertising Law and regulations do have related provisions

Article 12 of the Advertising Law of the P.R.C. - “An advertisement may not belittle the commodities or services of other producers and manufacturers or operators”

Comparative Advertising

Article 14 of the Unfair Competition Law of the P.R.C. - “A business operator shall not fabricate or spread false information to injure his competitors’ commercial credit or the reputation of his competitors’ commodities”

Comparative Advertising

State Administration of Industry and Commerce calls for: definite comparative subject

with verified scientific evidence non-belittlement of products or

services of competitors notedapproval of any person whose 

name or image is to be used in the advertisement

Ambush Marketing

Ambush Marketing in China

No specific laws or regulations on ambush marketing.

Laws that have some applicability:Article 21 of the Advertising

Law of the PRCArticle 2 of the Law Against

Unfair Competition of the PRC

Ambush Marketing2008 Olympics

Beijing Regulations on the Intellectual Property Protection of Olympics-related IPRs

Regulations on the Protection of Olympic Symbols

Beijing 2008 Olympic Games Sponsorship Program

Regulations on the Protection of Olympic Symbols

Ambush Marketing2008 Olympics

Regulations on the Protection of Olympic Symbols“Implied commercial purpose”Item (6) of Article 5Significant amount of discretion

with AICStrict enforcement

Ambush Marketing2008 Olympics

Beijing 2008 Olympic Games Sponsorship ProgramMost comprehensive

sponsorship packageTo consolidate, enhance and

protect the rights and privileges of the sponsoring corporations

Anti-ambush marketing program of BOCOG

Richard L. Wageman

Lehman Lee & XuChinese Law Firm with a Global

Perspective

Beijing, China

rwageman@lehmanlaw.comwww.lehmanlaw.com