The 12th Five-Year Plan It will guide Government actions through 2015, so it requires our attention Four notable commitments in the plan – Increase domestic consumption and social welfare – Create a more balanced economy, less dependent on exports, more geographically balanced – Encourage domestic innovation, both in technology and services sector – Develop strategic emerging industries • Especially new energy, new materials and alternative fuel vehicles Our focus is on the implications of this plan on investment, both inbound by MNCs and outbound by Chinese companies
About the Survey Aims and Objectives of the 3rd Dialogue – How current and emerging trends impact the practice of corporate public affairs in Mainland China Trade, Investment and China’s 12th Five Year Plan – The impact of China’s 12th FYP on the prospects for enhanced Sino-global trade relations Methodology – 155 Respondents – Online between November 3 – 24 – Senior corporate and government representatives – China, Asia, US, Europe – Country Director, Managing Director, Chief Investment Officer, Vice President of Government Relations
The Future Looks Bright Sense of future economic and trade development between China, Europe and US Despite global economic uncertainty and fears Very Optimistic 11% over the sustainability of China’s economic Optimistic performance, senior 66% management in global Very Pessimistic 0% industry and commerce remain optimistic about Pessimistic 20% future economic and trade developments Hold no view 3% between Europe, US and China. 0 10 20 30 40 50 60 70Q7. Given recent developments in economic, political and commercial relations between China, Europe andthe United States, how do you feel about future economic and trade developments between the countries?
Investment & The Five-Year Plan Opportunities abound for inbound and outbound investment 80 70 77% 68% Strong agreement that 60 current reforms will both enhance business 50 opportunities for China in 40 Agree the West, and enhance Disagree business opportunities 30 28% for international business 20 23% in China 10 0 Enhance opportunities Enhance opportunities for China business in for international the West business in ChinaQ12. The focus on investment and economic development set out in the 12th Fiver Year Plan will: 1-10(1=strongly disagree 10=strongly agree. D: Enhance the opportunities for China business in the West; E:Enhance the opportunities for international business in China.
Everyone Wants in on China1st in Average Rating China 45% Ranked asof Importance “Most Important” 1.84 2nd US 30% China “most important” in 2.18 strategic economic and trade terms. 3rd Asia (other than China) 20% Asked to rank from 1-5 (1 being 2.63 most important) China rates significantly ahead of US and 4th EU 9% Asia. 2.72 5th LatAm 4% 3.67 6th Africa 3% 4.41 Q8. Please rank the following nations/region in terms of their strategic economic and trade importance to your country at the current time. Rank 1st (most important) to 5th (least important), marketing a tick in the not applicable box for the country/region where your company is headquartered.
Inbound Investment & The Five-Year Plan Greater engagement by Chinese government in the development of industry and economy is beckoning Over three quarters agree that objectives set out in the 12th Five-Year Plan will lead to greater 23% engagement by the government. Agree 77% This could be construed Disagree as more state control of enterprise, necessitating the need for greater PA and GR capabilities.Q9. Do you believe that the inbound and outbound investment and economic development objectives setout in the 12th Five Year Plan will: 1-10 (1=strongly disagree 10=strongly agree. D Lead to greaterengagement by China’s government in the development of industry and the economy in that country.
Inbound Investment & The Five-Year Plan Obstacles to achieving objectives for foreign direct investment A lack of awareness among internationalbusiness about navigating Chinas stakeholder and communications landscape 81% 19% A lack of awareness among international business about navigating China’s regulatory 78% and political environment 22% The emergence of indigenous innovation, 64% Agree domestic consumption and the expansion of 35% Disagree Chinas manufacturing economy A pro-China approach to business and 73% investment selection 25% The regulatory and legislative 85% environment in mainland China 15% 0 10 20 30 40 50 60 70 80 90 Q10. The obstacles to achieving the stated objectives in respect of foreign direct investment in China are: 1-10 scale, 1=Strongly Disagree, 10=Strongly Agree
Outbound Investment & The Five-Year Plan Assisting Chinese corporations as they go global 10% 9 in 10 believe the outbound investment objectives set in the Plan will help Chinese Agree companies expand 90% Disagree globallyQ9. Do you believe that the inbound and outbound investment and economic development objectives setout in the 12th Five Year Plan will: 1-10 (1=strongly disagree 10=strongly agree. B: Assist the development ofChinese business seeking to “go global”.
Outbound Investment & The Five-Year Plan Obstacles to achieving objectives for overseas direct investment by China A lack of awareness among Chinese business about navigating the West’s 83% stakeholder and communications landscape 17% A lack of awareness among Chinese business about navigating the West’s 80% regulatory and political environment 20% Agree The unequal application of regulation 59% Disagree and legislation in respect of 39% international versus local companies 76% Nationalism and currency valuation/protectionist issues 23%A negative perception about China’s investment 83% motives and strategies 17% 0 10 20 30 40 50 60 70 80 90 Q11. The obstacles to achieving the stated objectives in respect of overseas direct investment by China are: 1-10 scale, 1=Strongly Disagree, 10=Strongly Agree
The Business, PA and GA Dimension Focus on investment and economic development will:Make it more important for foreign companies 91% in China to have structured governmentrelations strategies operating as core aspects 8% of business planning 69% AgreeIncrease corporate government relations and Disagree public affairs activity 20% 35% Make it more difficult to develop and 62%implement a China-wide GR and PA strategy 0 20 40 60 80 100 Q12. The focus on investment and economic development set out in the 12th Fiver Year Plan will: 1-10 (1=strongly disagree 10=strongly agree. A: Make it more important for foreign companies in China to have structured government relations strategies operating as core aspects of business planning, B. Increase my company’s government relations and public affairs activity; C. Make it more difficult to develop and implement a China-wide government relations and public affairs strategy.
Advice for Inbound Investors • Establish when a problem Relationships doesn’t exist Matter • Don’t just focus on the top • Be respectful of You are the decision-makers Guest • Avoid public criticisms Beyond • Provincial gov’t bodies can count as much as central Beijing gov’t Repeat, • Ministries and agencies Repeat, can overlap • Being well known in a home Repeat • Cast a wide net market does not equate to Be Local awareness in China • Global approaches may not apply
Advice for Outbound Investors • Remaining silent and not Define telling your story is not a Yourself, or strategy Others Will • Overseas clients buy the country first, then the product • Prepare an on-going diet The Media to keep the media well are Hungry fed Engage the • Meet with local management, employees, suppliers, Stakeholders community leaders Put Feet in • Think locally, design Target personally, brand Market’s domestically Anticipate • There can be frequently hostile constituencies Shoes Criticism • Other cultures can have more open and critical discussions
For more informationCraig Hoy: firstname.lastname@example.orgMark Hass: email@example.com