BEIJING, Aug. 4 (Xinhua) -- After ads for some products were banned, Chinese television stations are staring at a possible 60 percent decline in advertising revenue.

    The ban on television and radio advertisements for weight loss, breast enlargement and other beauty products and treatments, was announced in July and became effective on Aug. 1. It was introduced by the State Administration of Radio, Film and Television (SARFT) and the State Administration for Industry and Commerce (SAIC) because of fears that such ads violate consumers' rights and endanger their health.

    "The ban has shaken everyone in the industry, in TV stations, advertising companies and agencies," said a TV station staffer, who preferred to remain anonymous. "The government should come up with a more flexible policy while curbing advertising of fraudulent products and misleading commercials," he said.

    Chinese television stations are now hoping for more flexible policies on TV shopping. The staffer said TV stations will face economic difficulties if they are deprived of the highly profitable beauty ads. Advertising accounts for the lion's share of a TV station's revenue.

    When the ban came into effect on Aug. 1, a number of provincial TV stations defied it, refusing to eliminate the banned advertisements from their TV shopping programs. The situation persisted until Thursday, when 12 provincial TV stations received a warning from SARFT.

    Acknowledging that the banned advertisements make up half the TV shopping programs, an official with the SARFT said the temporary ban would certainly be tough for the TV industry, but would bring benefits in terms of long-term development.

    The SARFT said TV stations that break the rules will be punished because banned advertisements may violate consumer's rights and endanger their health.

    In recent years, a series of incidents has occurred in China with fake drugs and inappropriate medical treatment leading to injury or even death.

    Highlighting the harmful consequences of certain ads, the SARFT vowed to further regulate advertising procedures and tighten control over advertising content, said Ren Qian, a senior SARFT official.

    Ren also revealed that products appearing on TV shopping programs will be reviewed, and requirements for TV shopping companies made more strict.

    "It's true that lax criteria for TV shopping programs led to a spate of misleading advertisements, " said Li Fangwu, assistant secretary-general of the China Association of National Advertisers.

    According to the current regulations, any company with a registered capital of 100,000 yuan (12,500 U.S. dollars) can make TV shopping programs.

    Li revealed that some companies own a raft of fake drug brands or inappropriate medical treatment methods, selling them mainly through TV advertising. If one of the brands is shut down, they switch to another.

    Capital requirements for TV shopping companies should be raised and the quality of companies checked, Li said.

    He also suggested TV stations withhold funds from companies as a security. If problems occur, the money could be used to compensate consumers.

    Ren Qian confirmed that the SARFT would tighten standards for TV shopping companies, but no specific details are yet available.

    Insiders point out that TV shopping has become a very lucrative market attracting huge domestic and overseas investment. The industry is now struggling to resolve the "credit crisis" provoked by the ban.

    Chen Xinkang, vice-president of the MBA Institute of Shanghai University of Finance and Economics, said that TV shopping, since first appearing in 1995, had developed fast and now had billions of yuan in sales. However, misleading and false advertisements had destroyed consumer confidence and led to a decline of the industry. In the year 2000, TV shopping reached its nadir following another "credit crisis", and the number of companies in the field dropped to 300 from the previous 1,000.

    In its 2005 annual report, the Chinese Consumers' Association said TV shopping was the butt of most complaints from customers for fraudulent advertising.

    Chen said the ban would seriously impact TV shopping companies' revenues and about 20 percent of them would probably disappear.

    However, even if local businessmen are "depressed", well-known TV shopping companies from the United States, the Republic of Korea and Japan are rushing to explore the Chinese market, said Qi Xiaozhai, vice-director of the commercial and economics research center in Shanghai.

    "Their enthusiasm reflects TV shopping's great potential despite the current scandal," he said. In the metropolis of Shanghai, the combined sales from internet, mail order and TV shopping are estimated to hit 70 to 80 billion yuan (8.75 to 10 billion U.S. dollars) by 2010.

    Qi suggested that China learn from the experiences of other countries. Laws and regulations should be issued, he said, special channels launched for TV shopping, and companies should be helped to improve their services. Enditem