We demonstrate the typical advertising techniques in China and list scenarios that are in violation of the country’s advertising laws due to common misunderstanding. The article contains a sample of real-life cases that have been published by regulators.

All merchants and companies will be required to promote their business from time to time. This can be done either proactively, such as through well-designed online or TV video commercials or traditional ads in newspapers, on websites, and billboards, or via an organic strategy, such as building up the official website or business WeChat public account. However, many advertising techniques commonly used by company marketers and advertisers inadvertently violate Chinese advertising laws, as the laws are often ignored or misunderstood.

This article discusses several typical advertising techniques and scenarios that are in violation of China’s advertising laws.

Below are some typical misunderstandings about China’s advertising laws:

The reality: You should be cautious of the content on your official website and public WeChat account. “Advertising activities” refer to activities in the People’s Republic of China by sellers of goods or service providers to promote their goods or services directly or indirectly through a certain medium or format. The “certain medium or format” includes advertising activities on the internet, according to Article 2 and Article 44 of Advertising Law of the People’s Republic of China (Amended in 2021). Thus, promoting your products or services via your company website or public WeChat account is definitely counted as advertising activity and is governed by advertising laws. You can find more details in Cases 2, 4, 5, and 6 below.

The reality: It is not exempt. Although you are not advertising to the general public outdoors or on the internet, investigations of improper advertisements can include not only random checks by supervising authorities through site visits and online searches, but also reports from consumers. You can find more details in Case 3 below.

The reality: Some advertisers try to attract attention by using provocative or seductive language and using it to promote a common product or service. This behavior is risky, particularly those that use suggestive wording (such as alluding to sex or sexual services) that violates PRC laws or core values. On the other hand, even if the suggestive information itself does not violate laws or core values, the ambiguous or misleading content may violate false advertising rules. You can find more details in Cases 4 and 5 below.

The reality: This scenario is governed not only by specific advertising laws, but also by the Civil Code and the Personal Information Protection Law (PIPL). If your customer has not entered into any detailed agreement with you agreeing on the licensing period, usage scope, and purpose of use, among other requirements for the provision of their image or profile, and you continue use their personal information in your advertising materials, you will be at risk of being reported by the customer, and they have the right to demand compensation or, at least, the immediate removal of their photo  or details. If your advertising is related to medical services, you may also be liable for an administrative fine by the advertising and medical regulatory authorities. You can find more details in Case 8 below.

The reality: Fines for improper advertising have indeed been lower recently than that in the immediate two to three years after the Advertising Law was amended in 2018. This may be due to the impact of the pandemic, as authorities were more focused on pandemic control and economic recovery. However, the “costs” of violating advertising laws go far beyond administrative fines and can lead to the collapse of company image and negative impact on its reputation.

In the last decade, administrative penalties on a company have become much more transparent and easier for the public to see through channels, such as the Administrative Penalty Decision Database of the State Administration for Market Regulation (SAMR), which we will discuss in more detail below. In other words, no matter how small the fine is, the violation of the law and the penalty will be recorded and publicly available for all to see.

Below are some typical real-life cases posted on the Administrative Penalty Decision Database of SAMR. As mentioned above, this website is open to the public, and the information provided below has therefore been lawfully retrieved and published.

Advertising Law of the People’s Republic of China (Amended in 2021) Article 9 Advertisements shall not: […] (2) Use or covertly use the name or image of State agencies, personnel of State agencies

The above summary covers merely nine cases out of tens of thousands of cases that can be found on the database. However, these nine cases show that the scope of the supervision and enforcement of advertising compliance has been very broad in terms of regulations, industries, and activity. The legal grounds for fining the advertisers include but are not limited to:

The supervision and reporting channels for discovering improper advertisement include but are not limited to:

The release channels of the advertisement include but are not limited to:

Advertising, as the Chinese term guanggao (广告) indicates, is publicizing widely and publicly to society. As a country pursuing a healthy and trustworthy social environment and better protection of public interests, China will continue to strengthen legislation on advertising activities, as well as implementation of the existing laws. Therefore, the compliance with advertising laws will only become important in the future and will require constant and meticulous effort.

If you have any questions regarding compliance of advertising laws, please feel free to contact us at china@dezhshira.com.

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

Dezan Shira & Associates has offices in Vietnam, Indonesia, Singapore, United States, Germany, Italy, India, and Russia, in addition to our trade research facilities along the Belt & Road Initiative. We also have partner firms assisting foreign investors in The Philippines, Malaysia, Thailand, Bangladesh.

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