Page 310 - 2017 White Paper
P. 310
7 White Paper on the Business Environment in China
the encouragement of investment into the accounting The online segment is of particular interest to many,
and audit industry as stated in the 2015 Catalogue of having grown 52 percent year-on-year in 2008 to account
Industries for Guiding Foreign Investment. According to for $1.4 billion of spending on its own (Learmonth 2008).
IBIS World鈥檚 Auditing, Accounting & Tax Services Market A later report from Shanghai-based iResearch Consulting
Research Report, the industry grew 8.5 percent from 2010 Group indicated that the online advertising market had
to 2015, generating $10 billion last year. It will remain grown by nearly 60 percent in 2010 to account for more
open to investment in the coming years (Cao 2016). approximately $5 billion in revenue (albeit less than a
fifth of the estimated $26 billion in online advertising
Advertisement revenue recorded in the United States the same year)
(Shieber 2011).
Advertising is another relatively 鈥測oung鈥� industry
in China, having 鈥渞eturned to the People鈥檚 Republic of 2009 marked the first time 鈥淩ecommended Usage
China in 1979鈥� (Wang 2003). The Advertising Law of Standards鈥� for online advertising had been compiled by
1995 officially 鈥渓egitimated鈥� the agency system that is the China Advertising Association. The standards came
the international norm (China Realtime Report 2012), into trial operation on January 1, 2009 pending a review
and beginning January 1, 2006, wholly foreign-funded for amendments a year later (China Tech News 2009).
advertising companies were permitted access to the
market in line with China鈥檚 WTO entry commitments By the first quarter of 2012, 鈥淸t]he market size of
made in 2001 (Li 2006). China鈥檚 online advertising reached 14.03 billion yuan
($2.22 billion) [鈥� representing a] 56.2 percent year-on-
The interplay between state-owned media, a quickly- year increase [but a] 5.6 percent decrease compared to
changing media regulatory environment and overlap in the last quarter of 2011鈥�(Xinhua 2012b). A 2012 report by
regulatory jurisdiction is often cited as a major source Price Waterhouse Coopers predicted that鈥淸i]nvestment in
of interestingness, as illustrated by changes to tax law China鈥檚 Internet advertising [would] grow by 32.1 percent
in 2000 by the National Bureau of Taxation capping annually over the next five years鈥� (Xinhua 2012a).
corporate advertising expenditure to at 2 percent of
gross annual revenue, leading to protests from the State In contrast, other platforms like newspapers,
Administration of Industry and Commerce, which is magazines, TV and outdoor appeared to have far dimmer
officially tasked with oversight of the advertising industry futures on the Mainland: 鈥渁dvertising expenditure in
(Wang 2003). traditional media, including newspapers, magazines, TV,
radio and outdoor, increased just 1.4 percent in the first
Despite certain hiccoughs, the advertising sector is quarter, the lowest in nearly five years鈥�, according to a
without a doubt promising. In 2006 statistics indicated market research service cited by China Daily (Meng 2012).
that the overall output value of the industry was nearly
$15 billion (Li 2006). Furthermore, though reported Television spending is apparently also declining,
cutbacks in global advertising spending by between 10 rounding out the trend observed in other 鈥渢raditional鈥�
and 15 percent (advertising budgets are often the 鈥渇irst media:
against the wall鈥� when cash flow becomes an issue), a
study cited by China Daily indicated that advertising China Central Television, the country鈥檚 biggest
expenditures in fact grew by 15 percent in China during television network, sat quietly Monday on the sidelines
2008, reaching a total of 441 billion yuan (Yu 2009). of its annual advertising auction, a fanfare event typically
seen as a barometer for the economy and a muscle show
Even the global economic activity decline, advertising for the state broadcaster. It broke 20 years of tradition by
spending reportedly grew by 13.5 percent in 2009 (Hu declining to disclose the auction鈥檚 final total sales figures,
2010) and 2010 expenditure was reported to grow by inviting only a handful of state reporters to the event and
nearly 20 percent over 2009 values (People鈥檚 Daily Online downplaying what it has hyped every year before.
2011) to reach $442 billion (Yang 2011). PwC forecasts
this value to increase to $578 billion by 2015 (Ibid.). Marketing experts say CCTV is silent because it has
little to cheer about. Some key advertisers are pulling back
310 amid a government-led austerity campaign that began
last year. Companies鈥攐nce willing to pay premium rates
the encouragement of investment into the accounting The online segment is of particular interest to many,
and audit industry as stated in the 2015 Catalogue of having grown 52 percent year-on-year in 2008 to account
Industries for Guiding Foreign Investment. According to for $1.4 billion of spending on its own (Learmonth 2008).
IBIS World鈥檚 Auditing, Accounting & Tax Services Market A later report from Shanghai-based iResearch Consulting
Research Report, the industry grew 8.5 percent from 2010 Group indicated that the online advertising market had
to 2015, generating $10 billion last year. It will remain grown by nearly 60 percent in 2010 to account for more
open to investment in the coming years (Cao 2016). approximately $5 billion in revenue (albeit less than a
fifth of the estimated $26 billion in online advertising
Advertisement revenue recorded in the United States the same year)
(Shieber 2011).
Advertising is another relatively 鈥測oung鈥� industry
in China, having 鈥渞eturned to the People鈥檚 Republic of 2009 marked the first time 鈥淩ecommended Usage
China in 1979鈥� (Wang 2003). The Advertising Law of Standards鈥� for online advertising had been compiled by
1995 officially 鈥渓egitimated鈥� the agency system that is the China Advertising Association. The standards came
the international norm (China Realtime Report 2012), into trial operation on January 1, 2009 pending a review
and beginning January 1, 2006, wholly foreign-funded for amendments a year later (China Tech News 2009).
advertising companies were permitted access to the
market in line with China鈥檚 WTO entry commitments By the first quarter of 2012, 鈥淸t]he market size of
made in 2001 (Li 2006). China鈥檚 online advertising reached 14.03 billion yuan
($2.22 billion) [鈥� representing a] 56.2 percent year-on-
The interplay between state-owned media, a quickly- year increase [but a] 5.6 percent decrease compared to
changing media regulatory environment and overlap in the last quarter of 2011鈥�(Xinhua 2012b). A 2012 report by
regulatory jurisdiction is often cited as a major source Price Waterhouse Coopers predicted that鈥淸i]nvestment in
of interestingness, as illustrated by changes to tax law China鈥檚 Internet advertising [would] grow by 32.1 percent
in 2000 by the National Bureau of Taxation capping annually over the next five years鈥� (Xinhua 2012a).
corporate advertising expenditure to at 2 percent of
gross annual revenue, leading to protests from the State In contrast, other platforms like newspapers,
Administration of Industry and Commerce, which is magazines, TV and outdoor appeared to have far dimmer
officially tasked with oversight of the advertising industry futures on the Mainland: 鈥渁dvertising expenditure in
(Wang 2003). traditional media, including newspapers, magazines, TV,
radio and outdoor, increased just 1.4 percent in the first
Despite certain hiccoughs, the advertising sector is quarter, the lowest in nearly five years鈥�, according to a
without a doubt promising. In 2006 statistics indicated market research service cited by China Daily (Meng 2012).
that the overall output value of the industry was nearly
$15 billion (Li 2006). Furthermore, though reported Television spending is apparently also declining,
cutbacks in global advertising spending by between 10 rounding out the trend observed in other 鈥渢raditional鈥�
and 15 percent (advertising budgets are often the 鈥渇irst media:
against the wall鈥� when cash flow becomes an issue), a
study cited by China Daily indicated that advertising China Central Television, the country鈥檚 biggest
expenditures in fact grew by 15 percent in China during television network, sat quietly Monday on the sidelines
2008, reaching a total of 441 billion yuan (Yu 2009). of its annual advertising auction, a fanfare event typically
seen as a barometer for the economy and a muscle show
Even the global economic activity decline, advertising for the state broadcaster. It broke 20 years of tradition by
spending reportedly grew by 13.5 percent in 2009 (Hu declining to disclose the auction鈥檚 final total sales figures,
2010) and 2010 expenditure was reported to grow by inviting only a handful of state reporters to the event and
nearly 20 percent over 2009 values (People鈥檚 Daily Online downplaying what it has hyped every year before.
2011) to reach $442 billion (Yang 2011). PwC forecasts
this value to increase to $578 billion by 2015 (Ibid.). Marketing experts say CCTV is silent because it has
little to cheer about. Some key advertisers are pulling back
310 amid a government-led austerity campaign that began
last year. Companies鈥攐nce willing to pay premium rates
