China  - Pathways to gaining market access and building demand - ASAE IC2012. Maria Tong
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China - Pathways to gaining market access and building demand - ASAE IC2012. Maria Tong



Presentation by Maria Tong MCI Beijing at the ASAE International Conference 2012

Presentation by Maria Tong MCI Beijing at the ASAE International Conference 2012



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China  - Pathways to gaining market access and building demand - ASAE IC2012. Maria Tong China - Pathways to gaining market access and building demand - ASAE IC2012. Maria Tong Presentation Transcript

  • 2012 Association International Conference Chinese Government: Pathways to Gaining Market Access & Building Demand May 2, 2012 Maria Tong 1
  • Agenda• Importance of building relations with Chinese government• Function of Chinese government• The recent government’s focus• Means of engagement• Things you must know• Experience sharing from guest panelists 2
  • Importance of building relationswith Chinese government 3
  • The evolving role of Chinese government1949 - 1978 Planned Economy; Single Public Government DominantPlanned Economy Ownership; model1978 – 1992 Transition to Market Economy; Government guided &Reform: Goal Encourage private economy and market regulated modelExploring foreign investment;1992 – 2002 Market Economy goal established Modern limited governmentReform: Framework modelBuilding2002 - Perfect Socialist Economy System; 2002 onward: EfficientReform: Complete deeper market economic reform government modelSystem with open policy, multi types of economic components 4
  • Policy maker  The Government Project Approval controls the market Government entrance for foreign investors and the market permission for products as well. Think Tanks Chinese The government is the Policy Making Associations Industry policy maker and the main Academic driver for law-making and Institutions industry development.  The think tanks,International associations and academic Society institutions attached to Public Opinion the government have NGO tremendous impact on Media business activities and industry development. 5
  • The Five Year Plan• The vision for China national economy and social development1st. 5 2nd. 5 3rd. 5 4th. 5 5th. 5 6th. 5 7th. 5 8th. 5 9th. 5 10th. 5 11th. 5 12th 51953~ 1958~ 1966~ 1971~ 1976~ 1981~ 1986~ 1991~ 1996~ 2001~ 2006~ 2011~1957 1962 1970 1975 1980 1985 1990 1996 2000 2005 2010 2015• Each industry develops its own Five Year Plan based on the country’s Five Year Plan 6
  • Influence on your stakeholders Partners Company -Government - Association International - Institutions Association - Academic Individual - Media SuppliersHow to influence?• Giving recognition means you are allowed to access to the market• Approve association/public institution for collaboration or refer you to associations and institutions for partnership• Access to the State Own Enterprises, large private enterprises, academic groups and individuals working for the above• Drive industry demand by making policy and “government call”• Build your brand awareness through government events 7
  • Trust on government Source: 2012 Edelman Trust Barometer: Global Deck 8
  • Expectation for the government 9 Source: “Managing government relations for the future: McKinsey Global Survey results” Mckinsey Survey Feb, 2011
  • Function of Chinese government 10
  • Chinese government structure State Council Ministry/Bureau (e.g. SFDA) Association Government Office (e.g. China Public Institution (e.g. International Pharmaceutical (e.g. CCPIE) Affairs Department.) Association) 11
  • What does association do inChina?• Promote policy• Train industry people• Issue professional certification on behalf of government• Publish academic journals/publications• Create industry standard• Organize trade shows and meetings• Organize domestic and international exchange• Government research project 12
  • What does public institutiondo in China?Type of Public Institutions:• Training Centers (e.g. Training Center of SAFEA)• Foundations (e.g. China International Talents Exchange Foundation)• Research Institute (e.g. China Academy of Medical Science)• Media (e.g. China Pharmaceutical News)• International Exchange/Cooperation Center (e.g. China Center for Pharmaceutical Exchange Center) 13
  • The recent Government’s focus: 12th Five Year Plan 14
  • The Challenges China is FacingFaced with these challenges, • “Surface” Level Challenges: Housing,China has developed its 12th FYP healthcare, education, inflation, corruption, and food safety • Deep Challenges: Growth model - imbalanced, uncoordinated, and unsustainable • Deeper Challenges: Economic vs. political reform - political reform continues to trail economic reform 15
  • Main Content of the 12th. FYP Primary Goal: Improving People’s Livelihoods Theme: Re-balancing Economic GrowthGDP Growth CPI Lower Domestic Develop New Government at 7- 8% than 4% Consumption Industries Administrative Oriented Reform 16
  • What we need to knowabout the Five Year Plan• Fast economic growth is no longer the goal, increasing domestic need is a new goal• Growth will rely more on science and technology than on capital, natural resources, and cheap labor.• Rebalancing, stability, and people’s livelihood are the 3 keywords.• Operating costs are climbing, and competition is becoming increasingly intense, especially with SOE. 17
  • Specific Industries impacted 18 Source: The Economic Impact of China 12th Five-year Plan, Mckinsey Survey 2011
  • Means of engagement 19
  • Case Study of ISPE China(1)International Society forPharmaceutical Engineering(ISPE)Challenges:• Membership was small;• Participation of Chinese volunteers was not active;• Relationship with the government need to be developed;Objectives:• Grow membership• Improve relationship with the government• Understand local market better• Enhance brand awareness 20
  • Case Study of ISPE China (2)Solutions:• Collaborated with China Center for Pharmaceutical International Exchange (CCPIE), an institution of SFDA to organize joint Conference and SFDA official to speak• Invite SFDA and provincial FDA officials to join the complimentary ISPE regulatory membership• Assist SFDA officials to attend the ISPE Annual Conference in the US• Support Chinese government on translation of new China GMP• Organize Inspector Training Programs for the government inspectors• Expose in the official industry media affiliated to SFDA to promote brand awareness• Form a Regulatory Committee to monitor policy and build regular communication with government 21
  • Case Study of ISPE China(3)Outcomes:• Membership increases from less than 100 to around 1000, nearly 900% within 3 years;• 1/3 of the new members was generated from the Conference• Closer relationship was established with SFDA through the partnership on the Conference• Contacts (members & potentials) number has grown over 700%; 22
  • How to build relations Relation buildingResearch Plan Engagement Policy Monitor Reviewo Govern- o Goals o /Evaluation Invite to o Country’s 5 ment meetings Year Plan o Adjust your o Who to Mapping and speech plan focus o Industryo Attitude o Co-host according o How to policy Analysis event to new access o Media changeo Policy o Partner on News o What to do o Evaluate analysis Projects o Timeline o Industry hurdle and o CSR Trend success Campaign factors o Road Showo o Media interview o Position 23 Paper
  • Principal 1: Win-Win China’s Current Priorities Reform and opening-up Adjustments to industry structure Indigenous innovation Energy saving & emission reducing Harmonious regional development Win-Win Points Sustainable business/finance model Global networking and insights International standardization Advanced managerial experience Advanced body of knowledge Foreign Associations’ Strengths 24
  • Principal 2: Proactivecommunications• Top to down• You need “local support” to read government correctly and overcome cultural difference• Follow foreign affairs procedure• Build personal relations helps 25
  • Principal 3: Establish trust CSR necessity in China 26
  • Project negotiation & approval• Annual budget is usually approved in Q3 or early Q4 and can hardly be changed• Going abroad as government official status is restricted(1~2 times a year)• Negotiation process is lengthy and complicated 27
  • Things you must know 28
  • Things you must know• Working with government doesn’t necessarily means business profit, but it will help you enhance influence and allow you access to the market• Show your attitude of “Contribution” to the Chinese government rather than “long for money”• Be patient and persistent• Clear about your goal 29
  • Things you must know• Provide market research data to show your strength• Finding the right person in the government is important• Establish local presence• Localize your product (local language/content with local relevance is a must) 30
  • Things you must know• Ready to handle administrative affairs• Sign agreement carefully to protect your benefit• Be flexible 31
  • Panel Discussion Experience Sharing and Q&A Guest panelists: Abe Eshkenazi, Chief Executive Officer, APICSGreta Kotler, Chief Global Development Officer, ASAE 32
  • Contact InformationSpeaker Name (1)Maria TongTitle: Senior Account Director Speaker Name (3) Greta KotlerOrganization: MCI China Title: Chief Global DevelopmentPhone: 86-10-52061077 OfficerEmail: Organization: ASAE: the Center forWebsite: Association Leadership Phone: 202.326.9506Speaker Name (2)Abe Eshkenazi Email: gkotler@asaecenter.orgTitle: Chief Executive Officer Website: www.asaecenter.orgOrganization: APICS Association forOperations ManagementPhone:773.867.1779Email:aeshkenazi@apics.orgWebsite: 33