Page 322 - 2017 White Paper
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7 White Paper on the Business Environment in China
training. The Cabinet said the government also plans to recipients, and email advertisements must include opt-
expand consumer credit, improve the system of Internet out links. Additionally, advertisers may not use disruptive
payments and study the management of credit card tactics to entice users to click on links, either in emails or
fees to “further reduce overall expenses” related to their on web pages. Under the regulation, advertisers are also
use. Finally, the government will crack down on price- barred from using unfair competition methods such as
gouging as well as the sale of counterfeit goods, and interfering with the display of competitors’advertisements
prosecute monopolies and businesses engaged in unfair using applications or network devices (Jin 2016).Platform
competition. This announcement comes in line with operators are given the responsibility to monitor the third
the “new normal” of slower growth in China with a new party advertisements they post and can be subject to the
emphasis on sustainable, consumption-led development same or steeper penalties that advertisers face in cases
(Shanghai Daily 2015). of violation. Under the regulation, advertisements must
be clearly labeled so that users can differentiate between
New Shadow Banking Regulations advertising and non-advertising content. Similarly, search
engines are required to differentiate clearly between
In December 2013, the State Council issued “Circular paid and organic search results. If a third party wishes to
107”, laying out new intended regulations for shadow advertise on an online platform, the platform operator
banking, outlining changes for corporates dealing with is responsible for verifying the identity of the advertiser
non-bank lenders and new regulatory responsibilities and removing illegal advertisements (Ibid.).
by relevant government authorities. The new regulation
gained special relevance when in January 2014, China This could result in notable revenue loss for search
Credit Trust (CCT), a wealth management fund which engine providers like Baidu, which are legally required
sold investments via the Industrial and Commercial Bank to reject illegal advertisements and their accompanying
of China (ICBC) had to be bailed out. The new Circular revenues. The regulation also requires that platform
specifically outlined national shadow banking regulatory operators employ an advertisement review team to
responsibilities among four same-level government examine both the contents of the advertising and the
bodies – the People’s Bank of China (PBOC), China qualifications of the advertiser.
Banking Regulatory Commission (CBRC), China Securities
Regulatory Commission (CSRC) and Insurance Regulatory New NGO Management Law and Impact
Commission (IRC). Besides regulation at the national on Higher Education
level, the Circular also stated that local governments are
responsible for regulating“relevant shadow banking”. The In line with China’s 2010-2020 Innovation Society
new Circular also pinpoints ambiguity of responsibility Plan, Sino-foreign education will continue to be seen as a
arising from unclearly written contracts, requiring means to boost China’s knowledge economy.
financial institutions to clearly state who bears the risks
in shadow banking business contracts. The new Circular Traditionally, Sino-foreign universities have targeted
further requires the separation of wealth management China’s more prosperous coastal cities. However, the
funds for clients from the banks’ own funds and forbids Chinese government is now putting more emphasis on
the use of clients’ money to buy the banks’ own loan (Bi providing high-quality education services to children
2014). living in rural areas, or to migrant families who have
comparably lower household income. In addition, the
New Advertising Law MOE is giving more support to local governments from
Central and Western China in education development,
The new advertising regulation holds advertisers with plans in place for them to make up 44 percent of
responsible for the veracity of their content. In addition the total number of Sino-foreign programs. This initiative
to this, advertisers are prohibited from engaging in gives foreign investors more opportunities in a less
deceptive or disruptive online advertising tactics and saturated market. With China targeting 20 percent of
from unfair competition tactics. To avoid disrupting its energy mix to be clean before 2030, the Chinese
internet users, a one-click close option is required on government is also working to promote expertise in
pop-up advertisements. Advertisers are not allowed to atmospheric science, disaster management, ecology, and
send advertisements in emails without permission from environmental engineering. Joint education programs
322
training. The Cabinet said the government also plans to recipients, and email advertisements must include opt-
expand consumer credit, improve the system of Internet out links. Additionally, advertisers may not use disruptive
payments and study the management of credit card tactics to entice users to click on links, either in emails or
fees to “further reduce overall expenses” related to their on web pages. Under the regulation, advertisers are also
use. Finally, the government will crack down on price- barred from using unfair competition methods such as
gouging as well as the sale of counterfeit goods, and interfering with the display of competitors’advertisements
prosecute monopolies and businesses engaged in unfair using applications or network devices (Jin 2016).Platform
competition. This announcement comes in line with operators are given the responsibility to monitor the third
the “new normal” of slower growth in China with a new party advertisements they post and can be subject to the
emphasis on sustainable, consumption-led development same or steeper penalties that advertisers face in cases
(Shanghai Daily 2015). of violation. Under the regulation, advertisements must
be clearly labeled so that users can differentiate between
New Shadow Banking Regulations advertising and non-advertising content. Similarly, search
engines are required to differentiate clearly between
In December 2013, the State Council issued “Circular paid and organic search results. If a third party wishes to
107”, laying out new intended regulations for shadow advertise on an online platform, the platform operator
banking, outlining changes for corporates dealing with is responsible for verifying the identity of the advertiser
non-bank lenders and new regulatory responsibilities and removing illegal advertisements (Ibid.).
by relevant government authorities. The new regulation
gained special relevance when in January 2014, China This could result in notable revenue loss for search
Credit Trust (CCT), a wealth management fund which engine providers like Baidu, which are legally required
sold investments via the Industrial and Commercial Bank to reject illegal advertisements and their accompanying
of China (ICBC) had to be bailed out. The new Circular revenues. The regulation also requires that platform
specifically outlined national shadow banking regulatory operators employ an advertisement review team to
responsibilities among four same-level government examine both the contents of the advertising and the
bodies – the People’s Bank of China (PBOC), China qualifications of the advertiser.
Banking Regulatory Commission (CBRC), China Securities
Regulatory Commission (CSRC) and Insurance Regulatory New NGO Management Law and Impact
Commission (IRC). Besides regulation at the national on Higher Education
level, the Circular also stated that local governments are
responsible for regulating“relevant shadow banking”. The In line with China’s 2010-2020 Innovation Society
new Circular also pinpoints ambiguity of responsibility Plan, Sino-foreign education will continue to be seen as a
arising from unclearly written contracts, requiring means to boost China’s knowledge economy.
financial institutions to clearly state who bears the risks
in shadow banking business contracts. The new Circular Traditionally, Sino-foreign universities have targeted
further requires the separation of wealth management China’s more prosperous coastal cities. However, the
funds for clients from the banks’ own funds and forbids Chinese government is now putting more emphasis on
the use of clients’ money to buy the banks’ own loan (Bi providing high-quality education services to children
2014). living in rural areas, or to migrant families who have
comparably lower household income. In addition, the
New Advertising Law MOE is giving more support to local governments from
Central and Western China in education development,
The new advertising regulation holds advertisers with plans in place for them to make up 44 percent of
responsible for the veracity of their content. In addition the total number of Sino-foreign programs. This initiative
to this, advertisers are prohibited from engaging in gives foreign investors more opportunities in a less
deceptive or disruptive online advertising tactics and saturated market. With China targeting 20 percent of
from unfair competition tactics. To avoid disrupting its energy mix to be clean before 2030, the Chinese
internet users, a one-click close option is required on government is also working to promote expertise in
pop-up advertisements. Advertisers are not allowed to atmospheric science, disaster management, ecology, and
send advertisements in emails without permission from environmental engineering. Joint education programs
322
