China bars celebrities from endorsing products to boost ‘traditional virtues’

Chinese celebrities have been banned from endorsing a clutch of health and education services, signalling a new phase in President Xi Jinping’s campaign to overhaul the country’s corporate and social landscape.

The rules, which ban entertainers and influencers from backing the products via social media, television commercials, live-streams and interviews, will constrict the lucrative world of star endorsements.

Private tutoring and health foods, as well as tobacco products, healthcare and medical equipment are among the targeted industries, according to a notice issued by Beijing’s top market regulator, the State Administration for Market Regulation, along with six other government agencies.

“Celebrities should consciously practise socialist core values ​​in their advertising endorsement activities,” the rules stated. “Activities should conform to social morals and traditional virtues.”

Since late 2020, Xi has spearheaded a broad-based crackdown on China’s corporates, including the tech and entertainment industries, as well as wealthy businesspeople.

The latest clampdown was announced as the Chinese president intensifies his drive to reform social values and youth culture in the world’s most populous country, under the banner of “common prosperity”.

Xi cemented his control with an unprecedented third term as leader of the country at the quinquennial congress of the Chinese Communist party in Beijing last month.

Analysts and investors are worried that as China’s leader embarks on what he calls a “new era”, the party will tighten its control over society and the economy.

In a highly symbolic visit to the Hongqi, or “red flag”, canal in central China’s Henan province last week, Xi warned that the younger generation must “abandon the finicky lifestyle and complacent attitude”.

“We need to educate people, especially the youths, with the Hongqi canal spirit that China’s socialism is won by hard work, struggles and even sacrifice of lives. This was not only true in the past but also true in the new era,” Xi said, according to Chinese state media.

“Today, our material life has been greatly improved, but the spirit of perseverance like ‘the bullheaded old man removing the mountain’ and the hard working style must not change.”

Alicia Garcia Herrero, chief Asia-Pacific economist at Natixis, said Xi’s administration appeared to be sharpening its focus on excess wealth accumulation and aligning the country’s youth with the leader’s vision for China.

“That’s increasingly how this definition of ‘common prosperity’ has been reshaped,” she said.

The new product endorsement rules follow years of nationwide scandals and public outcry involving misleading celebrity-endorsed health and wealth management products as well as peer-to-peer lending platforms.

Local media have long criticised lax regulatory oversight, especially from the National Medical Products Administration, China’s drug approval agency, which is part of the State Administration for Market Regulation.

Chinese equities were sold off and the renminbi fell against the dollar after last month’s party congress. Investors issued a sceptical verdict on Xi’s leadership team after he stacked it with loyalists and acolytes.

The leadership overhaul, combined with the late release of disappointing economic data, rocked confidence in the world’s second-largest economy.

Additional reporting by Wang Xueqiao in Shanghai