They've never been able to give China Daily away so why would they worry about declining "circulation"? Who ever buys it? The only time I see people reading it is on planes when it is the only English language newspaper available.

Interesting article indeed... I had not read this China Daily article yet while I was writing in another comment earlier today, about "Churches and the market economy" >
Some publishers, contrarily to the sharp decline mentioned here, were still bragging last year, with the FIPP (the world magazine publisher's federation -its big meeting, every 2 years, will be in 2007 in Beijing-), about the growing share of magazines in the overall PRC advertising market. Others at the same time were bragging elsewhere about the PRC advertising market phenomenal growth ...so everyone was growing happily apparently in the print media advertising business ! This was probably in 2005 before the problems of listed Beijing Media (mentioned in this China Daily article) ? Soon after its IPO, this newspaper got involved in an advertising scandal followed by the arrest in Beijing of its advertising top managers (as soon as its new South African large shareholder started to put its nose in the accounts; these ad managers had transferred just before the IPO lucrative advertising contracts to their personal companies -fear of losing the frequent kickbacks in the business probably ?-). This was also probably before the well-know advertising giant Zenith (one of the world leading buying agency more exactly) got fed up by the absence of the usual audits, and started questioning seriously in 2006 the veracity of claimed circulation figures, and rate cards, of top magazine publishers (well, simple, the rule of thumb is that you divide by 4 or 5 these claims; Zenith just paid a lot in surveys just to discover the obvious -just need to bribe a bit the guys at the printers' to know the truth-).
But don't forget, newspapers and magazine belong to very different ad segments. Newspapers (the heavy industry) have ad markets 10 time bigger than magazines (the light industry), but a large part of the newspaper ads is made of small ads (real estate, local services...), what is very different from the glossy ads paid by cosmetic or mobile phone companies to the lifestyle and fashion magazines (against the claim that every rich Chinese is reading them).
I am not too sure about the quality of the data and source used by this "Blue book" ? The usual Nielsen ad count is probably the most reliable source (data can be purchased for each country in the world, including the PRC on Zenith's internet site, about USD 100 for all Asian countries, accept all major credit cards ... I should buy the most recent data to check all these advertising market figures).
Finally, to comment on another comment, I receive everyday in my building for free China Daily, so yes, like many expats, I end up reading it almost every day (easy, takes often less than a minute), because there is little else available, especially everyday for free (its human nature; starving guys in their cells find cockroaches excellent after a while). I have been my own rat lab. I acknowledge that I am brainwashed now and that I finds everything perfect. All negative things said above are lies of course. Long live the publicity department.

(something was missing in above commment)
Interesting article indeed... I had not read this China Daily article yet while I was writing in another comment earlier today, about "Churches and the market economy": "...our present World era is unhappily not very favorable to any cultural enlightenment, anywhere (at least in its classical forms; blogs and video look more like the future; books and press will die soon)."