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The Future of Foreign Advertising in China: The Lessons of History
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The Future of Foreign Advertising in China: The Lessons of History

Zhihong Gao

Abstract:

This article traces the development of foreign advertising in China since 1979, identifies the major institutional obstacles in the Chinese advertising market, and explores the likely impact of China's accession to the World Trade Organization on foreign advertising.It is the author's argument that advertising as a social institution is strongly shaped by the context in which it operates, and that the future of foreign advertising in China must be imagined with its social context in mind.

Introduction

In November 2001, China finally joined the World Trade Organization (WTO) and became a formal member of the capitalist free trade club. China's accession to the WTO came after the country had experimented with quasi-capitalistic economic reforms for more than two decades—a period in which the Chinese economy had experienced significant growth. However, in contrast to the Chinese economy, the Chinese political system has undergone very limited reform over the same time, and the Chinese government continues to uphold socialism and exercise authoritarian control in many social arenas.

While the Chinese media generally celebrated China's accession to the WTO, the news received rather mixed reactions in the West. There were optimists envisioning the inevitability of a huge and easily accessible Chinese market, where foreign businesses could compete and prosper; there were also skeptics who voiced their doubts about the significant institutional and social changes that China's WTO membership could possibly bring in the self-proclaimed socialist state. In the field of advertising, a general sense of optimism seems to prevail about the benefits of WTO membership to foreign business and advertising. One author, after commenting on the growth potentials of the Chinese advertising market, concluded that China, once a member of the WTO, will become "the new gold rush" for international advertising (Hatfield, 2002).

This optimism for the future development of foreign advertising in China follows the simple logic that WTO membership will stimulate the flow of foreign goods into China, and this, in turn, will facilitate the development of foreign advertising. However, advertising does not function solely as a business catalyst but interacts with, and is determined by, a whole range of social institutions, including politics. Thus, a more realistic analysis of foreign advertising in China must take into consideration the context in which advertising operates. In discussing the role of advertising in society, Carey (1960) reminds us that "the past holds within it the reality of the present and the outlines of the future" (p. 3). In such a light, predicting the future trajectory of foreign advertising in China necessitates a hard look at the historical context in which it has operated and the social and political factors that will condition its future. This paper thus examines the development of foreign advertising in China since 1979 and considers the likely consequences of China's WTO membership for its future. I will argue that the history of foreign advertising in China shows the degree to which advertising as a social institution is determined and its social influence limited by the context in which it operates.

The General Development of Foreign Advertising in China Since 1979

The Chinese Communist Party came into power in 1949 and established a socialist state based on the ideology of central planning, public ownership, self-reliance, and anti-capitalism. Before 1966, the socialist China tolerated the existence of commercial advertising in the country out of pragmatic considerations, and foreign firms were permitted to advertise in newspapers through designated state-owned advertising corporations (Bishop, 1989). During the Cultural Revolution, which lasted between 1966 and 1976, commercial advertising completely disappeared from the Chinese media because the Chinese revolutionary radicals believed that "advertising is a necessary evil for the capitalist countries caused by overproduction and under-consumption" (Chu, 1982, p. 40), and that the goal of socialism was to get rid of such a capitalist evil.

In the Spring of 1979, after more than a decade's absence, commercial advertising suddenly reappeared in the Chinese media. Most impressive was the fact that, given the prevalence of anti-foreign sentiments in the country, the Chinese media, the mouthpiece of the...


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