In April, China's Culture Ministry fined two young women 50,000 yuan (¥625,000) each for lip-syncing during performances in the city of Chengdu last year. The authorities characterize this edict against "fake singing" as a kind of truth-in-advertising rule, but most people think it was an overreaction to the negative publicity the government received when it admitted that a 9-year-old girl lip-synced a song during the opening ceremony of the Beijing Olympics. That girl had replaced another who was a much better singer but was considered unphotogenic.
The Olympic organizers were being criticized for something that professional entertainers do frequently. Though international stars such as Britney Spears and Janet Jackson have been slammed for lip-syncing on stage, it's understood to be a widespread phenomenon, and understandable given the huge production costs for major pop-music shows, which are expected to be perfect.
Lip-syncing is less of a problem in Japan, which isn't to say J-pop stars don't do it, but rather that most fans are less interested in the quality of the singing. A concert offers them the chance to get closer to their pop idol; whether the idol can hit the notes is more or less secondary. That's why there's almost as much talking as there is singing at J-pop shows.
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