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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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November 2, Beijing
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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 RelationsFrank Lavin, Public Affairs Chairman, Edelman Yuan Haiying, President, Yuan & Associates
CSR & Corporate EthicsSteven Cao, Founder, Pegasus Communications
Digital Dialogue Mark Hass, President, Edelman China
Conclusion: Looking forward on complexity & decentralizationAlan VanderMolen
Cocktail Reception
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DECENTRALIZATION
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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
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Pyramid Model of Authority
Organization
Mass Audience
Traditional Influencing Model
Your Name Here
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A new model has emerged: Public Engagement Cloud
Your Name Here
A New Era Of Public Engagement
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ABOUT THE SURVEY
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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
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GOVERNMENT RELATIONS
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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
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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)
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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
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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
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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?
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CSR & CORPORATE ETHICS
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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%
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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)
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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
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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
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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
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Government ExpectationsLooking 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.
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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?
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SOCIAL MEDIA
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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
200967%
79%
74%
10%
17%
Q7. Top 3 Box Important; Q9. Top 2 Box Influential; Q8 Top Box Utilize
54%
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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)
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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
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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
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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
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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?
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