1. Greg Austin, Cyber Policy in China
2. David S. G. Goodman, Class in Contemporary China
3. Steven M. Goldstein, China and Taiwan
4. Stuart Harris, China's Foreign Policy
5. Elaine Jeffreys with Haiqing Yu, Sex in China
6. You Ji, China's Military Transformation
7. Michael Keane, Creative Industries in China
8. Joe C. B. Leung and Yuebin Xu, China's Social Welfare
9. Hongmei Li, Advertising and Consumer Culture in China
10. Orna Naftali, Children in China
11. Pitman B. Potter, China's Legal System
12. Pun Ngai, Migrant Labor in China
13. Xuefei Ren, Urban China
14. Judith Shapiro, China's Environmental Challenges, 2nd edition
15. Alvin Y. So and Yin-wah Chu, The Global Rise of China
16. Teresa Wright, Party and State in Post-Mao China
17. LiAnne Yu, Consumption in China
18. Xiaowei Zang, Ethnicity in China

Copyright © Hongmei Li 2016

The right of Hongmei Li to be identified as Author of this Work has been asserted in accordance with the UK Copyright, Designs and Patents Act 1988.

First published in 2016 by Polity Press

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ISBN-13: 978-0-7456-7116-1

ISBN-13: 978-0-7456-7117-8(pb)

A catalogue record for this book is available from the British Library.

Library of Congress Cataloging-in-Publication Data

Names: Li, Hongmei,1974- author.

Title: Advertising and consumer culture in China / Hongmei Li.

Description: Malden, MA : Polity Press, 2016. | Includes bibliographical references and index.

Identifiers: LCCN 2015046121 | ISBN 9780745671161(hardback) | ISBN 9780745671178 (pbk.) | ISBN 9781509511136 (mobi) | ISBN 9781509511143 (epub)

Subjects: LCSH: Advertising–Social aspects–China.

Classification: LCC HF5813.C5 L484 2016 | DDC 659.10951–dc23 LC record available at http://lccn.loc.gov/2015046121

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This book is the outcome of my ten-year observation of the advertising industry in China. I became interested in Chinese advertising and consumer culture when I was a graduate student at the University of Southern California (USC), where I completed my dissertation on the subject. My advisor Marita Sturken, and dissertation committee members Larry Gross, Stanley Rosen, and the late Richard Baum (at UCLA) provided tremendous support and encouragement. Larry and Marita have been providing continuous guidance after I graduated from USC.

I continued the research while I was a George Gerbner postdoctoral fellow at the Annenberg School for Communication, University of Pennsylvania in 2008–2010. I am very grateful to Dean Michael X. Delli Carpini for providing a stimulating and nurturing research environment while I was there. This project received Georgia State University's (GSU) research initiation grant in summer 2012. I also want to thank Richard Campbell, chair of Department of Media, Journalism and Film at my current home institute Miami University, Oxford, Ohio, for providing funds for indexing the book.

Jade Miller read through my dissertation manuscript at USC. Many of my graduate students at GSU read part of the book manuscript and provided useful feedback. In particular, I want to extend my appreciation to Carmen Goman for her meticulous editorial support. Mina Ivanova, Chris Michael Toula, and Laci Lee Adams also provided useful assistance.

I would especially like to thank the advertising and media professionals and scholars who agreed to be interviewed. To preserve their anonymity, I cannot list all of them. Among them, however, I want to mention Huang Shengmin, Chen Gang, Raymond So, Josh Li, Thomas Mok, and Liu Guoji. I also thank Liu Changming, Ruby Wu, Xu Zheng, Zhang Xiangying, and Li Mei for arranging my internships in Beijing in a Japanese firm, a Chinese firm, and a Western media-buying agency.

My family provided tremendous support. My two kids Sam and Joseph made the writing much more enjoyable. My husband Xu Cao provided a lot of encouragement. My brother-in-law and sister-in-law in Beijing provided support while I was conducting research there. My parents Li Linhui and Liu Zizhen always have a steadfast belief in me. This book is dedicated to them.

Since China opened its doors to domestic and international capital in 1978, the “low salary, low consumption” system prevalent during the first three decades of Communist rule (since 1949) has gradually been replaced by a political economy that promotes higher salaries and higher-level consumption. Before 1978, almost all daily necessities were rationed, with prices determined by the central authorities. Producing and saving were two core values of China's economy. Ideal socialist Chinese cities were “Spartan and productive places with full employment, secure jobs with a range of fringe benefits, minimal income and lifestyle differences, an end to conspicuous consumption and lavish spending, and with decent consumption standards for all” (Whyte & Parish, 1984, p. 16).

Despite a thriving advertising industry in Shanghai in the 1920s and 1930s (Jian Wang, 2000; Jing Wang, 2008), China gradually eliminated commercial advertising after the founding of the People's Republic of China in 1949. During the Cultural Revolution (1966–1976), there were almost no commercial ads except for limited information about foreign exports (Chen, 2010). People were predominantly dressed in blue, gray, brown, or military green, prompting French journalist Robert Guillain (1957) to call the Chinese “the blue ants…under the red flag.” The streets were devoid of outdoor advertising, except for political slogans or publicity columns filled with printed or handwritten political announcements and propaganda.

Since 1978, China has undergone tremendous changes. Consumerism, attacked as decadent capitalism during the Mao era, has now become a key driving force to economic development. In the last two decades, the Chinese government has actively promoted domestic consumption as a way to restructure the economy. Current Chinese cities resemble the urban centers in any capitalist society, and attract pleasure-seeking consumers, with towering buildings, ubiquitous outdoor TV commercials, alluring neon-lit billboards, bulletins, posters, outdoor TV screens, mural ads, massage bars, beauty salons, department stores, and many brands of automobile. Chinese consumers have access to a wide range of local and foreign products, wear clothes in any color or style that one can imagine, and are exposed to domestic and foreign advertisements that sell customized luxury products as well as mass-produced daily necessities.

The “three big items”—the staple consumer goods (a bike, a watch, and a radio set) that symbolized a well-to-do family in urban China in the Mao era—have been replaced by the new three big items: an apartment in a good location, an automobile of a good brand, and the opportunity for foreign education. With increasing disposable income, a rapidly growing middle class, and an increasing number of millionaires and billionaires, China is now flooded with luxury foreign products, making the country the third largest luxury market in the world. A McKinsey report estimates that China will account for 20 percent (180 billion yuan or approximately $27 billion USD) of global luxury sales in 2015 (Atsmon, Dixit, & Wu, 2011). China has become the world's largest market for automobiles, personal computers, smart phones, and a long list of other consumer products and production materials.

Advertising, arguably the most important institution driving consumer desires, has developed rapidly in China. From a previously negligible sector, advertising has grown into a gigantic industry at double-digit and sometimes triple-digit rates, with an average annual rate of growth of 35 percent in the last three decades (Cheng & Chan, 2009). Advertising revenue continues to grow, often at a rate much higher than the general economy growth.

The development of advertising goes hand in hand with China's economic globalization, political liberalization, cultural transformations, and technological development, especially since 1992. As will be discussed in chapter one, four major factors—policy, market, technology, and culture—have shaped Chinese advertising. The dynamics of these interdependent forces are embodied in three key relations: state–media, producer–consumer, and China–West relations. These sets of relationships constitute and determine crucial features of advertising culture in China.

China joined the World Trade Organization (WTO) in 2001, further liberalizing the media and advertising markets. In the post-WTO era, the authorities have tightened control over media's ideological functions while simultaneously liberalizing their economic potentials. New advertising and marketing trends and practices have emerged in conjunction with new communication technologies and social media.

In this interdisciplinary project, I analyze advertising in China since 1978 as an industry, a profession, and a discourse in the broader context of China's search for modernity and economic integration with global capitalism. This book emphasizes the ways in which advertising practitioners negotiate between the local and the global, the state and the market, China and the West, and tradition and modernity. Thus it can be read as a cultural history of advertising as well as an analysis of China's broader societal and cultural transformations.

My investigation centers on Chinese ad agencies and brands, with limited discussion of foreign advertising, for three reasons. First, in the Chinese market, the majority of advertising agencies and marketers are local. Second, scholars such as Jing Wang (2008) and Jian Wang (2000) have discussed foreign advertising in China. Gerth (2003) analyzes advertising in the early twentieth century in great detail. However, research on Chinese ad agencies and brands published in English is limited. And third, the tactics and strategies used by Chinese ad agencies and brands reflect challenges and opportunities facing less-developed countries entering the global market.

This project is the outcome of my cumulative fieldwork and observation over the last ten years. I draw upon materials from advertising campaigns, trade journals, news reports, documentaries, and interviews. In summer 2005, I conducted participant observations in a Chinese advertising agency, a Japanese firm, and a Western media firm. Additionally, I conducted thirty-four interviews with advertising professionals, including ten working in Japanese firms, ten in Western firms, twelve in Chinese firms, and two in Taiwanese firms. I also interviewed several leading scholars. Further, between 2008 and 2012 I conducted repeat interviews as well as new interviews with ad professionals.

This book is among the first scholarly works in English that systematically analyzes Chinese advertising from the perspective of Chinese ad professionals, ad agencies, and advertisers. It contributes to an emerging body of literature that examines the tension between nationalism and cosmopolitanism in China's engagement with globalization. This book provides insight into China's evolving media industries as they are affected by communication technologies. It also allows readers to understand the changing relationship between the media and the ad agency, the advertiser and the consumer, and the regulators and regulated in post-WTO China.

Chapter one introduces the conceptual and analytic framework for understanding Chinese advertising. It discusses key theories and historical contexts that allow readers to look at Chinese advertising as an industry, a profession, and a discourse. I focus on China's search for modernity and cultural globalization, as well as the dialectical relationship between nationalism and cosmopolitanism, and Orientalism and Occidentalism. The chapter stresses how key advertising influencers, including factors such as policy, market, technology, and culture, mutually shape the key sets of relations: state–media, producer–consumer, and China–West.

Chapter two discusses advertising and consumer culture since 1978 in the broader context of China's modernization, economic liberalization, and media commercialization. It provides an overview of advertising development and analyzes three phases in conjunction with China's political and economic liberalization. The government's support for domestic consumption as well as the rise of the middle class play roles here. My analysis centers on the interplay between the market and the state, the local and the global, and technology and ideology.

Chapters three through five analyze the tension between nationalism and cosmopolitanism and the convergence of the two. Specifically, chapter three focuses on how neoliberal policies and the imagined West-China relations shaped advertising ideas and practices prior to China's entry into the WTO and during the subsequent grace period until 2005. Such an analysis is also complemented by an understanding of important competition tactics and advertising strategies proposed by leading Chinese ad professionals in post-WTO China. The chapter investigates the transformation of Chinese advertising agencies (state-owned and private) and the discourse of Chineseness, focusing on how advertising has become a site for negotiating Chinese identity as a business and cultural strategy.

Chapter four studies how Chinese advertisers sell nationalism and cosmopolitanism by conducting an in-depth analysis of selected TV commercials and print ads. Given that Chinese advertisers and ad agencies often claim to represent more authentic Chinese feelings and values, an analysis of these ads helps us understand how Chinese advertisers reflect and produce Chinese identity, which further reflects a conflicting understanding of China as a nation, a state, and a people in an increasingly globalized market. This chapter is a modified version of a journal article published in the International Journal of Communication in 2008.

In chapter five, I extend the discussion from chapter four and investigate China's most prominent sportswear brand, Li Ning, in relation to global brands and other Chinese brands. The chapter analyzes Li Ning's marketing and advertising strategies, centering on the Beijing Olympics and beyond. The analysis specifically explores how and why the brand balances nationalism and cosmopolitanism to produce a cosmopatriotic image.

Chapter six looks at China's controversial advertising in the context of the country's changing regulations and its sociopolitical, economic, cultural, and technological transformations. Topics explored include the nature of advertising controversies; the differences between local and foreign ads; the impact of technologies; and historical, political, and cultural contexts that contribute to controversial advertising practices.

Chapter seven continues the discussion of the impact of digital technologies and analyzes how trend-setting advertising practices have changed the relationship between the media, the advertiser, the consumer, and the ad agency. I discuss three major advertising practices that have exerted lasting influences, including CCTV's annual auction, Unilever's branded entertainments, and Chinese smartphone Xiaomi's participatory social media marketing. The three different advertising practices illustrate China's shift from mass marketing to more responsive strategies catering to consumer needs and sentiments.

I should note three things: first, in the book I convert Chinese currency into US dollars using the exchange rates at the time of each occurrence; second, advertising revenue figures are not deflated because they are mainly used to illustrate general trends; last, the name of a Chinese person is spelled out mostly following the Chinese convention—that is, one's given name follows the family name. However, if a scholar is based in the West or has an English first name, the first name precedes the family name.

An incomplete list of links of ads discussed is included as an appendix.