China addresses wealth gap concerns

Isaac Mostovicz writes that China has revealed plans to restrict the marketing of “luxury” and “high class” products in a bid to balance a widening wealth gap between urban and rural areas...

In 2010 China overtook Japan to become the world’s second largest economy, marking the beginning of a new era for China. Despite this, the wealth gap has become increasingly prominent in recent years. Just earlier this month China recorded its widest wealth gap since economic reforms began in 1978. According to the National Bureau of Statistics, the average annual income in China’s cities stands at more than three times the average income in the countryside.

China recently announced that reining in inflation was a priority for 2011, and just today news emerged that Beijing is to introduce a ban on all outdoor advertising that seeks to promote high-end lifestyles, suggesting that there is concern among the country’s leaders about the need to rebalance China’s economy.

The Beijing Administration for Industry and Commerce said in a recent statement relating to the ban, that businesses have been given a deadline of 15th April to rectify such ads, along with any that excessively promote “foreign” things, claiming that such promotions help create a politically “unhealthy” climate.

Newly forbidden words include “supreme”, “royal”, “luxury” or “high class”, which are widely used in Chinese promotions for houses, vehicles and wines, it said.

This may pose a problem for luxury brands wishing to advertise in Beijing, but as I have mentioned in previous posts, the surge in China specific e-commerce platforms, and emerging use of social media for marketing luxury, would suggest such brands will instead simply switch tools to continue benefitting from China’s growing wealth.

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