2010 Public Affairs Dialogue


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The Pubic Affairs Dialogues survey - The Three Pillars of Modern Public Affairs in China, reveals emerging trends in the areas of government relations, CSR, and social media for public affairs in China.

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2010 Public Affairs Dialogue

  1. 1. Private © EdelmanPrivate & Confidential © Edelman November 2, Beijing
  2. 2. Private © Edelman Agenda  Welcome, Decentralization Alan VanderMolen, Asia Pacific President, Edelman  Overview of Survey: Three Pillars of Modern Public Affairs in China Mark O’Brien, Vice President, PAA  Government Relations Frank Lavin, Public Affairs Chairman, Edelman Yuan Haiying, President, Yuan & Associates  CSR & Corporate Ethics Steven Cao, Founder, Pegasus Communications  Digital Dialogue Mark Hass, President, Edelman China  Conclusion: Looking forward on complexity & decentralization Alan VanderMolen  Cocktail Reception
  3. 3. Private © Edelman DECENTRALIZATION
  4. 4. Private © EdelmanPrivate © Edelman Decentralization  Economic growth – Drives strengthening of Provincial and Municipal governments – Ability/need for Central Government to delegate authority  Web and mobile technologies – Flood of sources and channels for consumers of news and information – Domestic voices and foreign sources  Legal compliance complemented by social compliance – Changing legal and regulatory environment – Great social expectations
  5. 5. Private © Edelman Pyramid Model of Authority Organization Mass Audience
  6. 6. Traditional Influencing Model Your Name Here
  7. 7. Private © Edelman A new model has emerged: Public Engagement Cloud Your Name Here A New Era Of Public Engagement
  8. 8. Private © Edelman ABOUT THE SURVEY
  9. 9. Private © EdelmanPrivate © Edelman About the Survey  Aims and Objectives of the 2nd Dialogue - Research and benchmark - Debate and challenge - Distil into white paper  Three Pillars of Public Affairs in China - Government Relations: Tough and getting tougher - CSR: Social license to operate - Social Media: The digital citizen  Methodology - 104 respondents - Online between October 1-28 * Chatham House rules – open debate * White paper: answers and questions…and more questions
  10. 10. Private © Edelman GOVERNMENT RELATIONS
  11. 11. Private © Edelman Government Relations: Tough and Getting Tougher 76% believe GR is more difficult in China than in the West 0% 10% 20% 30% 40% 50% 60% 70% 80% More challenging Less challenging 68% feel GR will be even more challenging in the future Q 14. Practicing government relations in China is: Net top & bottom 2 box Q15. The government relations landscape confronting Western MNCs in China is becoming: Net top & Bottom 2 box 0% 10% 20% 30% 40% 50% 60% 70% 80% More difficult Less difficult
  12. 12. Private © Edelman Decentralizing Government Relations Practices Agree Disagree Neutral Local government in China is rapidly rising in importance as it takes on a greater role in economic development and commercial investment issues 78% 2% 20% The rise of second tier cities means government relations and public relations strategies must be devolved from national to local levels 70% 8% 22% Q16. State your levels of agreement/disagreement with the statement (Net top & bottom 2 box)
  13. 13. Private © Edelman Government Relations: Tough and Getting Tougher  More potential for change in China’s business environment than any other major economy  Strong positive commercial prospects for most MNCs, balanced against more difficult regulatory environment.  Ongoing debate in China between economic rationalism and economic nationalism  Provincial and municipal decision-makers increasingly involved in operating decisions  Even at Central level, diffusion of decision- making authority requires MNCs to help shape a consensus across multiple institutions – Bloomberg
  14. 14. Private © Edelman Government Relations: Tough and Getting Tougher  Sustained over-performance of China’s economy contributes to nationalism, protectionism and creates local champions  Increasingly open architecture and multiple decision-makers and regulators heightens the complexity for MNCs  Opportunities in China have never been greater; risks have never been higher – US exports to France vs China
  15. 15. Private © EdelmanPrivate © Edelman Implications for Government Relations 1. Are your PA-PR-CSR functions coordinated? 2. Do you just monitor/consult in GA or do you try to influence government activity/policy? 3. How do you tackle challenges at the provincial and local level? 4. How is your PA budget in China set? 5. How do you build-up PA operations, including head office calling schedule?
  16. 16. Private © Edelman CSR & CORPORATE ETHICS
  17. 17. Private © Edelman Impact of Rapid GDP Growth 0% 10% 20% 30% 40% 50% 60% Higher Same Lower 35% 54% Q12. The development of GDP-focused growth in China means that companies will face (Net top & bottom box) China’s GDP growth is set to place higher explicit and implicit obligations as companies are expected to address societal needs 11%
  18. 18. Private © Edelman A View on Social Responsibility Agree Disagree Neutral Chinese government expects foreign MNCs to have a higher standard of CSR than domestic operations & SOEs 72% 7% 21% CSR in China is more central to our overall corporate strategy than it is in the West 21% 47% 32% CSR in China is more closely aligned with government strategy than in the West 61% 18% 21% The government in China is committed to ensuring that companies treat workers better 48% 11% 41% Q13. State your levels of agreement/disagreement with the following statement (Net top & bottom box)
  19. 19. Private © Edelman CSR and Corporate Ethics: Social License to Operate  Greater number of participants in the debate about a corporation’s responsibility to society  All corporations are exposed to pressures to be “good”, with social media used when they fall short. - Trust Barometer: 75% in China more likely to trust a corporation that partners with an NGO to battle global issues  Citizens and competitors will fact-check and expose corporate wrong-doing in a continuous cycle of finger-pointing  Implicit and explicit obligations for MNCs – Audit to preserve and enhance license to operate in China’s increasingly crowded and complex markets  The ‘citizen consumer’ is rising leading to Governments responding to increased call for action
  20. 20. Private © Edelman To answer government’s new call, the upcoming 2010 Summer Davos in Tianjing takes the theme of Promoting Sustainable Growth Three Key Reflections of Central Leadership’s Attitude:  Harmonious Society  Scientific Development  Sustainable Development Sustainable Development has become a high-priority state policy, expected to guide the current transition in industrial restructure and upgrade – while China is gaining its economic strength and quickly converging with the world in all aspects. CSR and Corporate Ethics: The New Government Decree
  21. 21. Private © Edelman CSR and Corporate Ethics: Social License to Operate  Environment continues to be a key issue, leading to the creation of relationships between government, NGOs and corporations  Edelman’s 2010 goodpurpose study: - 84% in China expect corporations to take action to preserve and sustain the environment - 82% in China agree government and business need to work together more closely to ensure the environment is protected - 80% in China would support legislation that requires government to fund partnerships between public and private organizations to help protect the environment  Labor laws: CSR and stakeholder engagement are being fused - Employees are rapidly becoming one of the most significant stakeholder groups
  22. 22. Private © Edelman Government Expectations Looking to Business Leaders to Participate in Public and Social Management as Pioneers and Thinkers  Investment, advanced products & technologies and contribution to the GDP are still important. More important is your role in helping China solve social and environmental issues that impede its sustainable development.  Chinese mainstream media are seeking out those who set good examples which promote China’s sustainability in social, economic and environmental arenas.
  23. 23. Private © EdelmanPrivate © Edelman Implications for CSR & Corporate Ethics 1. How do you comprehensively integrate CSR into corporate strategy for business in China? 2. How do you align CSR strategy with government concerns and policies? 3. How can you achieve the step change from CSR to sustainability? 4. Government expects more of MNCs than local companies, but strategy doesn’t match up. Why? 5. To what extent do Chinese country managers have the ability to determine CSR priorities?
  24. 24. Private © Edelman SOCIAL MEDIA
  25. 25. Private © Edelman Digital is More Important, but Companies Are Engaging Less 0% 20% 40% 60% 80% 100% We fully utilize social media platforms as part of public affairs strategy Opinions expressed in online and social media are more influential than other channels Social media is important to public affairs strategy in China 2010 2009 67% 79% 74% 10% 17% Q7. Top 3 Box Important; Q9. Top 2 Box Influential; Q8 Top Box Utilize 54%
  26. 26. Private © Edelman The Role of Social Media Agree Disagree Neutral Social media is beyond my company’s control 39% 38% 23% Social media is beyond the government’s control 27% 40% 33% Social media is a form of digital democratization 66% 25% 9% The Chinese government is responding to representations made via digital platforms 58% 35% 7% Social media is presenting increased challenges to the traditional mode of corporate communications and government relations 87% 6% 7% Q10. State agreement/disagreement with the statement (Net top 2 box)
  27. 27. Private © Edelman The Digital Citizen: A Populist Force Internet is a broad public forum in China, both a source of public opinion information for companies and the government, and a force for shaping policy and news Rapid user growth to continue: 380 million (2010); 840 million (2013) Urban, young, educated: Half the nation’s population is urban; 75% of its internet users live in cities Internet landscape is fragmented, but increasingly oriented toward social networks, mobile access
  28. 28. Private © Edelman The Digital Citizen: Government vs. Community The Government  The internet, once a force to control, must now be viewed as a release valve for social pressure and a portal into grassroots emotions  Substantial, but declining control of content Wumao Dang: The 50 Cent Party The Golden Shield: Blocked searches, vanishing social media posts • Growth of online community makes long-term, real- time control technically unfeasible The Social Media Community  The community exerts pressure on government because of its sheer size • Social media are part of the news cycle • Mainstream media quote social media and vice versa in an “internet amplification cycle” • Eruptions of nationalism online are disruptive and troubling to Chinese policy  Growing importance of online influencers creates new, populist sources of information • 60% of Sina Weibo’s 20m users follow top 10 bloggers
  29. 29. Private © Edelman The Digital Citizen: Protesters, Vigilantes, Nationalists  Large Scale Internet Protests against corruption, unfair actions and “enemies” of China are a unique and powerful phenomenon of the Chinese digital community  2 large-scale protests targeted government in 2003; 12 in 2009  Typically aimed at local government officials, rather than national leaders or policies (with exceptions) - July 2010: Internet community on behalf of Qiu Ziming vs. Zhejiang province paper company and police - July 2009: Internet community vs. Ministry of Industry and Information Technology Green Dam software initiative - July 2009: Online community vs. Hubei party and police officials over Shishou incident  Protests aimed at companies can be “scandals for hire”  Protests often reflect strong nationalist themes - Japan, Nobel Prize
  30. 30. Private © EdelmanPrivate © Edelman Implications of Digital for Public Affairs 1. Why have companies been unable to engage fully in social media for PA programs? 2. How do companies monitor and analyze the voice of the Digital Citizen? 3. How can companies prevent competitors from exploiting Digital Citizens for negative attacks? 4. Can corporate GA and CSR programs be positively aligned with the power of Digital Citizens?
  31. 31. Private © Edelman Where from here?