China's advertising industry has been told to brace itself for a major overhaul over the next 10 years. Experts attending the 2006 China (International) Creative Concepts Forum in Beijing on September 3 said to expect upheaval and major readjustment during the upgrading process.

According to a report released at the forum, the current output value of China's advertising industry is 100 billion yuan (US$89.38 billion), and it will take "only six years" to double that figure.

The ad industry, one of the barometers of social, cultural and economic development, plays a key role in the building of a "creative society", said Shen Jianjun, secretary of the Party Committee of the Capital University of Economics and Business.

Shen added that China's ad industry is attracting worldwide attention because of its high rate of growth in the last six years.

In 2000, the British government published a white paper on the creative industry. 13 industries were grouped under this classification. "Of the 13 industries, advertising industry ranks No.1," according to Yang Tongqing, a professor at Capital University.

On a global scale, the daily output value of the creative industry has reached US$22 billion and this is increasing at an annual rate of 5 percent, Yang added.

In developed countries, the annual growth rate of the industry is of course higher; 14 percent in the US, and 12 percent in Britain. The innovations industry has become Britain's second largest industry accounting for 7.9 percent of its GDP, after the financial services industry.
 
The Chinese ad industry will no doubt follow the trend of the times, said Zhang Xiaoping, chief executive officer of the Guangdong Heima Advertising Co. Ltd. "Once advertising is classified as part of the creative industry, it will upgrade itself quickly to become more professional, varied and colorful."

In the meantime, however, experts pointed out that the current pace of economic development will continue to place heavier demands on domestic companies who have to fend off competition from big global names.

From January 1, wholly foreign-funded advertising companies were permitted to operate in the Chinese market, which many saw as the beginning of the end for domestic players. But Wu Xiabo, general manager of Guangdong Pingcheng Advertising Co., saw it as an opportunity: "The year 2006 marks the beginning of a new era in the Chinese advertising industry. Now, it is truly on the road to globalization."

"And with globalization, we can't cling to accepted practices without thinking of making any improvements," Wu said, adding that this is the time for restructuring and readjustment.

But there are challenges ahead. These include restrictions placed on creative concepts by the incumbent economic structure; an underdeveloped professional structure; fixed patterns of urban development and planning; lack of effective intellectual property rights protection; a traditional and conventional education system; and low consumption levels of creative products.

Kang Jun, a member of the Tianjin Municipal Committee of the Chinese People's Political Consultative Conference, added that stronger government support for the development of the industry is required in the face of increasing competition from foreign companies.

(China.org.cn by Li Jingrong, September 17, 2006)