China's New Leaders No Threat to Ads

Interference Not Expected From Beijing Because Marketing Isn't Considered 'Strategic' Industry

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The marketing industry will be looking to China's new leaders to continue to push policies that spur urbanization and domestic consumption.

Incoming President Xi Jinping, Premier Li Keqiang and several other top leaders in the administration cut their teeth in booming coastal areas, where foreign investment was an important factor in the local economy. None has any ties to marketing, but the industry is expected to continue growing without much interference from Beijing, especially because advertising isn't considered a "strategic" industry, such as energy, food or infrastructure.

President Xi Jinping
President Xi Jinping

"The government focuses on things that directly affect the lives of groups of consumers, and advertising in that sense is not threatening, so it's given a fairly wide leash," said Tom Doctoroff, JWT's Shanghai-based Asia-Pacific CEO.

Compared with previous generations of Communist leaders, Mr. Xi appears to be the most open to Western influences. A fan of Hollywood films such as "Saving Private Ryan," the 59-year-old stayed with a local family during an agricultural-research trip to rural Iowa in 1985 and has a daughter studying at Harvard.

China's economic growth is slowing, which makes marketers nervous. "The system in China generally doesn't lead to dramatic policy shift," said Kenneth Jarrett, Greater China chairman for public-affairs consultancy APCO Worldwide. "China seems determined to continue the very fast pace of urbanization."

Even so, last year China restricted "overly entertaining" TV shows and banned commercial breaks during dramas. "China can surprise everybody, making dramatic decisions which really aren't flagged much in advance which can disadvantage Chinese players as much as multinationals," he said.

As part of a continuing crackdown on internet freedom, the government in December announced restrictions requiring users to provide their real names to service providers, and made it harder to see websites considered politically sensitive. Similar rules already exist but haven't been widely followed. Now they've been issued by the powerful Standing Committee of the National People's Congress, signaling that China's new leaders will try to exert more control over China's increasingly feisty internet users. At least for a while.

Japan's Brand Battle

Japanese brand owners are hoping their newly elected government can cool a territorial spat with China that has devastated business, including causing vehicle exports to the country to plunge 84%. Prime Minister Shinzo Abe has said he will make Japan's economic recovery a priority. The conservative will presumably avoid inflaming the long-running conflict.

Chinese have widely shunned normally popular Japanese products from cars to electronics, though sales have started recovering. During the worst of the tensions, protesters smashed and burned Japanese businesses. "Since the issue occurred, we have done consumer-research work in order to know the change of Chinese consumer mind-set to Japanese products," said Sakai Katsuomi, a Beijing-based Dentsu executive. -- Anita Chang Beattie

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