Compliance with China’s Advertising Laws – Common Pitfalls and Red Flags

Posted by Written by Donfil Huang Reading Time: 9 minutes

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.

Typical misunderstandings of advertising law

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

Misunderstanding 1: “Objective copy on my company’s official website or public WeChat account that introduces my business does not count as advertisement.”

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.

Misunderstanding 2: “The description of goods and services are posted inside my business premises, such as store, office, or factory, and therefore does not count as ‘advertisement’ and are exempt from advertising laws.”

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.

Misunderstanding 3: “I can use ambiguous or suggestive descriptions as long as I use it to promote an actual product or service.”

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.

Misunderstanding 4: “Photos and personal profiles on my business app’ were posted voluntarily by my customers, therefore I am not liable for any claims against me.”

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.

Misunderstanding 5: “The fines for improper advertising have been reduced, it is therefore worth it for my business to bear such costs in return for the revenue I make from the advertisement.”

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.

Real-life cases

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.

No. Province/City Date of penalty Case description Advertising channel How it was discovered Penalty Violated laws and provisions
1 Jiangsu Province 6/10/2022 An advertising firm published an advertisement for a dental clinic.
Per investigation, the advertising company did not examine the Medical Advertisement Examination Certificate of the dental clinic, which had expired already when the advertisement was being promoted.
Thus, the regulatory authority fined the advertising firm.
Indoor light box advertisement Routine inspection by the authorities Rectification of the advertising activity;
Penalty of RMB 10,000 (US$1,468.56)
Measures for the Administration of Medical Advertisement (Amended in 2006)
Article 17. A medical institution shall publish its medical advertisement in accordance with the contents of the sample of the finished advertisement and the types of medium approved in the Medical Advertisement Examination Certificate. Article 18. If an advertising agent or advertising publisher is to publish a medical advertisement, its advertisement examiner shall examine the Medical Advertisement Examination Certificate and check the contents of the advertisement.
2 Jiangsu Province 6/9/2022 A company promoted a “rubber modified asphalt” product on its company website, stating that the products contain “new environmentally-friendly road building materials formulated using the company’s patented technology”; however, the promotional text did not indicate the patent number and patent type.
Thus, the regulatory authority fined the company.
Company’s official website Reported to the authorities Fined RMB 2,000 (US$293.71) Advertising Law of the People’s Republic of China (Amended in 2021)
Article 12 For patented products or patented methods involved in advertisements, the patent number and patent type shall be stated.
3 Sichuan Province 5/30/2022 A company engaged in technologies and services for improving eyesight publicized and introduced the effect of the technical service by setting up a promotional column, billboard, banner and photo wall in its office. Among them, two billboards were printed with the words “one day you can take off your glasses”, but the company could not provide relevant proof for this claim.
Thus, the regulatory authority fined the company.
Promotional board and cards inside the office Reported to the authorities Fined RMB 5,088 (US$747.2) Advertising Law of the People’s Republic of China (Amended in 2021)
Article 28 Advertisements which deceive or mislead consumers with false or misleading contents shall constitute false advertising. The following advertisements are deemed as false advertising:
[…]
(4) Fabricating the effects of use of goods or services;
4 Jiangsu Province 5/30/2022 A foot massage parlor released an article on its public WeChat account with a title that suggested the provision of sexual services.
Per investigation, the foot massage parlor defended the title of the article as being intended to refer to the attractive discount.
Still, the regulatory authority fined the operator of the parlor.
WeChat public account Found by the authorities through  professional search tools Fined RMB 10,000 (US$ US$1,468.56) Advertising Law of the People’s Republic of China (Amended in 2021)
Article 3 Advertisements shall be true and legitimate, and advertisement contents shall be expressed in a healthy form and shall comply with the requirements of civilized development of socialism and promotion of fine traditional Chinese culture.Article 9 Advertisements shall not: […] (7) Hinder public order or violate social morality
5 Shanghai 5/17/2022 A company engaged in network, computer, and software technology released a promotional article on its WeChat public account, which contained the text “During the fight against COVID-19, the company actively responded to the call of the government and organized its employees to contribute to the fight against COVID-19”.
Per investigation, it was found that the company, without the employees’ consent or authorization, had used photos of employees participating in volunteer services in their personal name as the proof that “the company organizesd anti-pandemic work”, which was untrue and misleading to consumers.
Thus, the regulatory authority fined the company.
WeChat public account Routine inspection by the authorities Fined RMB 10,000 (US$ US$1,468.56) Advertising Law of the People’s Republic of China (Amended in 2021)
Article 28 Advertisements which deceive or mislead consumers with false or misleading contents shall constitute false advertising. The following advertisements are deemed as false advertising:
[…]
(5) Any other circumstances of using false or misleading contents to deceive or mislead consumers.
6 Shanghai 5/11/2022 A company was incorporated on June 9, 2021.
The company published advertisements on its official website, containing the wording “Over the years we have been providing our customers with a large number of high-quality products and services”.
On January 8, 2022 (around half a year after the company had been established), the website and its contents were reported to the regulatory authorities.
Per investigation, the regulatory authority fined the company.
Company’s official website Reported to the authorities Be fined with RMB 5,000 (US$734.28) Advertising Law of the People’s Republic of China (Amended in 2021)
Article 28 Advertisements which deceive or mislead consumers with false or misleading contents shall constitute false advertising. The following advertisements are deemed as false advertising:
[…]
(2)  Information on performance, function, place of origin, use, quality, specifications, ingredients, price, manufacturer, expiry date, sales or accolades of the goods, or information on contents, service provider, form, quality, price, sales or accolades of the services, as well as information on undertakings in relation to the goods or services, are inconsistent with the actual situation and have a substantial impact on purchase behavior;
7 Yunnan Province 5/5/2022 An advertising firm published an outdoor advertisement for a cellphone seller.
The content of the advertisement contained the words “The lowest price in the city”.
Per investigation, the regulatory authority fined the advertising firm.
Outdoor wall advertisement Routine inspection by the authorities Fined RMB 20,567 (US$3020.38) Advertising Law of the People’s Republic of China (Amended in 2021)
Article 9 Advertisements shall not: […] (3) Use wordings such as “national level”, “highest level” and “best”;
8 Beijing 5/21/2021 A medical cosmetology clinic operates its official app, where it publicized the comments and experiences of patients after treatment. It also took photos uploaded by patients before and after treatment and placed them in an “customer cases” file in the app’s “official album”.
The patient of one case, which was published in 2015 and then not updated and maintained, reported the issue to the regulatory authorities in February 2021, stating that the clinic used her image as a proof to publish medical advertisements on the app without paying advertising fees or profits.
Per investigation, the regulatory authority fined the clinic.
Company’s official app – customer cases Reported to the authorities by former customer Fined RMB 20,000 (US$2937.12) Measures for the Administration of Medical Advertisement (Revision 2006)
Article 7. The form of expression of a medical advertisement shall not contain any of the following circumstances:
[…]
(6) use of the name or image of any patient, healthcare technician, medical education and scientific research institution or its personnel and other public association or organization as evidence; ……
9 Beijing 5/20/2021 An educational publisher sells books on Tmall. The description of one of the books was “[…] recommended by the new curriculum standards of the Ministry of Education  as compulsory reading for primary school students in grade 3-4…”
Per investigation, the regulatory authority fined the publisher.
Tmall store (e-commerce B2C store) Reported to the authorities Fined RMB 200,000 (US$29371.16) Educational Materials Bureau of the Ministry of Education had issued rules prohibiting the use of wording such as  “the Ministry of Education recommended” when publishing or promoting books.

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:

  • Case1 – Releasing medical advertisements without having or examining the Medical Advertisement Examination Certificate.
  • Case 2 – The advertisement involving a patent does not indicate the patent number and patent type.
  • Case 3 – The advertisement fabricated the effects of use of goods or services.
  • Case 4 – The advertisement (and the suggestive information in the advertisement) hindered public order or violated social morality.
  • Case 5 – False advertising (confusing one thing for another).
  • Case 6 – False advertising (the history of the company in the advertisement is inconsistent with the actual situation).
  • Case 7 – Using superlative wording, such as “national level”, “highest level”, and “best”.
  • Case 8 – Using the name or image of a patient as a proof in a medical advertisement.
  • Case 9 – Using the name or image of State agencies in the advertisement; using the wording “Ministry of Education recommended” when promoting books.

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

  • Routine inspections by the authorities
  • Reports by consumers
  • Found by the authorities on the internet via professional search tools

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

  • Indoor light box advertisements
  • Company official websites
  • Promotional boards and posts inside the office
  • WeChat public accounts
  • Outdoor wall advertisement
  • Company’s official apps
  • E-commerce B2C store

Conclusion

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.


About Us

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.