China lifts ad limit for state firms as TV revenues fall

SHANGHAI: The Chinese Government has raised the two per cent of sales income limit that state-owned enterprises can spend on advertising to eight per cent just months after the policy came into effect. Media agency sources believe depressed television advertising revenue may have prodded a rethink on the spending ceiling. "This ties in with what TV stations are telling us, that they are down on revenue targets this year although adspend is supposedly up for the year," said a source. "It's a serious issue because TV stations are largely seen as a revenue source for the Government." It is understood that national broadcaster China Central Television suffered a single-digit loss and Beijing TV was down by double-digits for the first quarter. Sources said the market is far less buoyant than ACNielsen figures of a 22 per cent gain in adspend for the first four months of 2001 suggest. The two per cent limit and ban on prescription drug advertising have been blamed for depressing overall spend.

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