No one can deny that the Chinese market is one of the most lucrative business landscapes in the world. Over the years, the country’s growing penetration on local social media and e-commerce channels eventually enticed many foreign brands to start advertising in China.
However, did you know that the People’s Republic of China has very strict regulations when it comes to advertising?
The rapid evolution of mass media led the government to implement a stringent Chinese advertising law. Besides fighting against false and misleading content, it aims to strengthen consumer protection in different industries, especially medical-related products and services.
In this guide, let us walk you through the terms of China Advertising Laws and how they affect your promotional campaigns within the local market.
How do companies advertise in China?
Around 87% of the overall advertising business landscape in China is dominated by online ads. Foreign companies operating within the Chinese market have the option to launch promotional campaigns through different formats and channels, like search engines and social media platforms.
Ad Spend Rate in the Chinese Advertising Market (Source: Statista)
Considering the continuous growth of online consumers in China, local experts predict that digital advertising content penetration will reach 90% by 2027. This statistical data has prompted the Chinese government to organize relevant departments to execute market regulation.
Read along as we break down relevant laws and advertising guidelines that foreign marketers must remember to avoid penalties and operational hurdles.
What are the “Absolute Terms” in the New Advertising Law in China?
The Chinese advertising law states that “absolute terms” refer to words like “the most,” “the best,” or other similar phrases. These exaggerated expressions are carefully regulated across advertising platforms to protect public welfare and avoid feeding consumers false or misleading content.
The relevant departments responsible for China’s advertising laws and regulations are aware of the vagueness of this regulation. Because of this, the penalties for illegal advertising conduct only take effect under specific contexts that exhibit potential social harm or the absolute intent to mislead consumers.
When Can You Use Absolute Terms?
Marketing Materials and Brand Messaging Exceptions
Based on the new advertising law adjustments, any messaging with “absolute terms” is not prohibited as long as it’s published within the brand’s business premises, company website, or other mass media content not intended for selling.
As long as the online media does not possess the elements of advertising content, these laws and regulations won’t apply.
However, to avoid unfair competition, the People’s Republic of China requires every advertising publisher to prove the credibility and authenticity of their messaging. If proven untrue, businesses can be penalized based on other relevant laws.
The local advertisement law also permits the use of “absolute terms” under specific circumstances that do not directly reference the brand’s products and services. Here are the following circumstances that do not constitute violations or penalties:
- If absolute terms are added to convey the business goals, corporate cultures, and personal desires of the advertising operator
- If the phrases serve as an expression of a brand’s confidence in its service
- If the advertising activities do not refer to the quality of the products and services promoted by the brand
- If the terms are for comparing the products from the same company or brand
- If it only highlights the technical qualities of a product or service (e.g., shelf life, application)
- If certifications from national or industry standards accompany the absolute phrases
- If the absolute terms are included in the name of awards and recognitions
- If the advertisement contains factual details backed by statistics, revenues, or any business milestones
Industries with highly regulated Advertising Laws in China
1. Educational Facilities
The Chinese educational market is a $1.64 billion industry that provides many business opportunities for local and foreign brands. However, like every other market segment in China, it’s highly regulated by the local advertising law.
The strict advertising regulations in this market also stem from the high expectations of Chinese parents for their children’s educational journey.
SDG’s work with UNSW Global: Baidu Paid Advertising Campaigns
If you plan to market your educational facilities in China, any false advertisement promising specific outcomes, such as assured exam success, admission into advanced educational programs, or attainment of academic qualifications, is not allowed.
This regulation also protects students from misleading advertising practices like taking advantage of an academic organization or industry professional’s names, likenesses, or affiliations.
On top of that, the advertising law restricts utilizing testimonials from former students to endorse or validate educational programs promoted by the brand.
2. Real Estate
When launching real estate ads, the advertising law of the People’s Republic of China dictates that you must be truthful and accurate about the property’s dimensions. It is essential to distinctly specify whether the area mentioned refers to the total building space or the internal area of the apartment.
SDG’s work with Jones Lang LaSalle
Relevant national provisions also serve as a reminder to every online advertising publisher not to include promises of financial returns or assurances regarding increased property value. Your promotional materials should also align with China’s regulations on pricing.
The local government also implements strict advertising supervision on deceptive claims about the proximity or quality of transportation, cultural and educational amenities, or other pre-planned infrastructure around the area.
3. Healthcare and Medical
Advertising for prescription drugs is strictly confined to specific medical and pharmaceutical publications. However, it does not include narcotics and other medications intended solely for the use of medical and pharmaceutical professionals.
Brands in this industry should also note that specialized medications, medically utilized toxins, and radioactive pharmaceutical products are not allowed to have any form of advertising campaign in China.
SDG’s work with Sugiyama Maternity Hospital
The advertising law states that introducing health products with an alarming impact on the physical and mental health of minors is not permitted to go through the local mass media. This prohibition extends to medical treatment, health food, and beauty regimen.
This measure ensures that vulnerable groups are not exposed to marketing that could harm their health and development.
4. Alcohol Brands
While it’s true that almost every country worldwide has a strict advertising law on alcoholic beverages, China stands out among the rest for its specific regulations. For example, ads for these products shouldn’t include encouragement to consume alcohol.
The advertising publisher must also ensure that the promotional content does not imply that it’s safe to drink alcohol when driving any vehicle, whether cars or boats.
SDG’s work with 1883 – Maison Routin
No matter what, the advertising campaigns from liquor brands should never imply that drinking alcohol can lead to relaxation, reduce anxiety, or enhance someone’s physical capabilities
These measures are put in place by the government to prevent the promotion of alcohol products as a means to improve one’s physical or mental health.
5. Tobacco Brands
Like alcohol, tobacco is another product with strict regulations under China’s online advertising law.
The brand’s name, trademark, packaging, or other distinct characteristics won’t be allowed to launch across mass media or public areas (indoor or outdoor).
Suppose public communications are needed, such as relocation notices, changes in corporate identity, or employment opportunities. In that case, the announcement must be meticulously written to avoid including any identifiable aspects of the tobacco product, specifically its name.
It ensures that even necessary announcements remain free from any tobacco advertising content.
Other Products Prohibited From Launching Online Ads on Baidu
You may not know, but Baidu advertisements must abide by even more stringent regulations beyond the government’s mandate. In fact, the search engine specifically restricts promotions for medical treatments, devices, services, or healthcare products.
SDG’s work with MOXA: Baidu Search Advertising campaigns
Businesses in Baidu cannot promote auction houses, franchise opportunities, sexual products, and virtual currencies. Any content that threatens political stability in the country will also be censored in compliance with national laws.
Baidu’s additional restrictions prove its dedication to safeguarding the regular consumer’s social and public interests.
Restrictions on Mass Media Aimed for Children
Paid promotions within the territory of educational institutions are strictly regulated to shield children from commercial exploitation. Except for public service announcements, all forms of advertising won’t be encouraged in schools to prevent exposure to potential predatory marketing practices.
These advertising laws and regulations should not promote unsafe practices or convince children to pressure their parents into making purchases.
Specific Content Restrictions Based on Advertising Law
China has restrictions that largely align with the ones you see on the international business scene. As such, advertisers are expected to only release campaigns with accurately presented data, with appropriate sources cited.
You must remember that the local regulatory body won’t encourage any competitive comparison or mention of criticisms against industry rivals.
The launched promotional campaign must clearly convey its purpose as commercial content and under no circumstances be disguised as news reports. Your online pop-up ads must have an easily accessible and visible close button, allowing immediate dismissal with a single click.
Furthermore, the regulations specify several content types that are all forbidden in advertisements across ALL platforms:
- Misuse or impersonation of the country’s national flag, official anthem, cultural emblem, military flags;
- Unauthorized utilization of the names and imagery of government organizations or their personnel;
- Any content that damages the dignity of China or discloses government secrets;
- Marketing materials that disrupt order or contradict social norms;
- Any content posing a risk to personal data privacy or threatening the safety;
- Obscene, pornographic, gambling-related, superstitious, terroristic, or violent content;
- Discriminatory content based on ethnicity, race, religion, or gender;
- Content that encourages practices harmful to environmental, natural resource, or cultural heritage conservation;
- Any other content that is expressly prohibited by Chinese law.
Example of a clear landing page for Baidu PPC for our client Moxa
What are the penalties for not following advertising regulations in China?
Suspected illegal advertising campaigns will undergo thorough investigations. Once proven, the severity of the penalties will depend on the type of violation committed by the advertising operator.
For minor offenses, the fines may only reach up to 100,000 RMB. However, severe violations can escalate to an amount ranging from three to five times the cost of the advertisement, subject to a minimum of 100,000 RMB and potentially reaching 1 million RMB.
If your company is found guilty of launching more than two illegal advertisement campaigns, the penalties can start at a minimum of 1 million RMB and double to 2 million RMB. In addition, the authorities may revoke the company’s business license and advertisement review credentials.
The advertising operator may also be barred from submitting any applications for renewal for the whole year.
The violation extends beyond financial penalties for companies offering medical treatment and health foods. These institutions may also face the grave possibility of revoking their practice licenses and preventing them from operating within the local market ever again.
Why is the Chinese government so strict about online advertising?
As you can see in our discussion above, the Chinese government’s stringent approach to online advertising can be a bit complex. However, they have fairly good reasons for implementing these regulations:
- Consumer Protection
The government aims to protect consumers from false claims, misleading information, and harmful products by setting strict rules. It includes ensuring that ads are honest about what they’re selling and only promising what the product can deliver.
- National Image and Security
It’s no secret that China prioritizes national security and reputation, as evident in the implementation of The Great Firewall. Ads cannot misuse national symbols or disclose state secrets, which could harm the country’s image or security.
- Youth Welfare Protection
Another priority of these regulations is the protection of minors. It aims to shield young people from the potentially negative influence of certain products and services.
- Economic Fairness
The restrictions are also in place to ensure fair competition among businesses. The government promotes an equal playing field by not allowing companies to criticize each other using ads.
What types of advertising are popular in China?
Digital advertising on popular social media platforms like Weibo, WeChat, and Douyin is extremely popular in China. Besides that, paid promotions through search engines have also been proven effective in the local market.
Who regulates advertising in China?
The State Administration for Market Regulation (SAMR) is China’s primary regulatory body overseeing advertising practices. It enforces the Advertising Law and monitors compliance across media and platforms.
How much does advertising cost in China?
The online advertising cost in China depends on the platform, format, and campaign duration. Digital ads can range from relatively affordable to extremely expensive for prime spots on popular platforms. Generally, consulting with local advertising agencies for precise, up-to-date costs is recommended.
Your Online Advertising Partner in China!
The advertising law in China serves as a roadmap for new brands to determine how to navigate the complex business landscape of the local market. These regulations may appear overwhelming, especially for foreign businesses unfamiliar with Chinese marketing practices.
Our experienced team is here to guide you through every twist and turn, unlocking your brand’s full potential and ensuring resounding success in this dynamic landscape.
Whether it’s launching ads on social media platforms or acquiring an ICP business license, SDG has your business needs covered! Contact us today to learn more about navigating the local advertising law and using it to your brand’s advantage.
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