China to Announce First Advertising Code of Ethics

Standards for World's Fourth-Largest Advertiser Are Based on Those of International Chamber of Commerce

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The first advertising code of ethics will be announced in Beijing this week for China, currently the world's fourth-largest advertiser and forecast to move into Germany's No. 3 slot next year. For the ad industry, the new code is an opportunity to introduce self-regulation consistent with standards in the rest of the world and to also be involved in the discussion around the Chinese government's revision and updating of the country's current ad law.

"All developed ad markets have a self-regulatory code … for legal, honest, truthful and decent advertising," said Stephan Loerke, managing director of the World Federation of Advertisers. The WFA and the China Association of National Advertisers are holding a Global Advertisers Conference this week in Beijing.

"China has been working on a revised ad law for quite a few years," Mr. Loerke said. "We don't know when it will be published. We know the Chinese government is interested in self-regulation to complement the ad law."

Mr. Loerke said China's new code of ethics is based on the International Chamber of Commerce's code of advertising, which is the model for other countries. With the WFA's guidance, it was developed by CANA and other Chinese ad trade groups, working with marketers including AB InBev, Unilever, L'Oreal, Nestle, SABMiller, Mars, PepsiCo and Coca-Cola.

"It's the first step," he said. The next move is to set up an organization to enforce the code, and hear and resolve complaints from consumers and other advertisers.

China's code is consistent with those in other countries, stipulating, for instance, that alcoholic beverage marketers should promote responsible drinking and not portray drinking as glamorous or performance-enhancing. The code also reflects China's "unique political, cultural and social environment," Mr. Loerke said. In particular, one clause says that "marketing communication and the creation of recognized brands have achieved the same important status as R&D and intellectual property creation, and have thus become two high priorities in the current global-value chain."

That reflects a positive attitude in China toward encouraging the growth of advertising and marketing. "The [Chinese government's] five-year plan is to go from a manufacturing-based to a consumer-demand driven economy, and they see advertising as a key driver of that, to kick-start domestic consumption," he said.

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