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The third annual Edelman/PublicAffairsAsia Dialogue examines issues and opportunities around Trade, Investment, and China's 12th Five-Year Plan.
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2011 China Public Affairs Dialogue
Trade, Investment and China’s 12th Five-Year Plan
State of Trade
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
Despite global economic
uncertainty and fears
over the sustainability of
China’s economic
performance, senior
management in global
industry and commerce
remain optimistic about
future economic and
trade developments
between Europe, US and
China.
0 10 20 30 40 50 60 70
Hold no view
Pessimistic
Very Pessimistic
Optimistic
Very Optimistic
Sense of future economic and trade development between China, Europe and US
Q7. Given recent developments in economic, political and commercial relations between China, Europe and the United States, how do you feel about future economic and trade developments between the countries?
66%
11%
0%
3%
20%
Investment & The Five-Year Plan
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. D: Enhance the opportunities for China business in the West; E: Enhance the opportunities for international business in China.
Strong agreement that
current reforms will both
enhance business
opportunities for China in
the West, and enhance
business opportunities
for international business
in China
0
10
20
30
40
50
60
70
80
Enhance opportunitiesfor China business in
the West
Enhance opportunitiesfor international
business in China
Agree
Disagree
Opportunities abound for inbound and outbound investment
77%
68%
23% 28%
Everyone Wants in on China
China “most important” in
strategic economic and trade
terms.
Asked to rank from 1-5 (1 being
most important) China rates
significantly ahead of US and
Asia.
China
1.84
US
2.18
Asia (other than China)
2.63
EU
2.72
LatAm
3.67
Africa
4.41
1st in Average Rating
of Importance
3rd
4th
5th
6th
2nd
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.
45% Ranked as
“Most Important”
20%
9%
4%
3%
30%
Inbound Investment
Inbound Investment & The Five-Year Plan
Over three quarters
agree that objectives set
out in the 12th Five-Year
Plan will lead to greater
engagement by the
government.
This could be construed
as more state control of
enterprise, necessitating
the need for greater PA
and GR capabilities.
Greater engagement by Chinese government in the development of industry and economy is
beckoning
Agree
Disagree
Q9. Do you believe that the inbound and outbound investment and economic development objectives set out in the 12th Five Year Plan will: 1-10 (1=strongly disagree 10=strongly agree. D Lead to greater engagement by China’s government in the development of industry and the economy in that country.
23%
77%
Inbound Investment & The Five-Year Plan
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
0 10 20 30 40 50 60 70 80 90
Agree
Disagree
78%
35%
The regulatory and legislative
environment in mainland China
A pro-China approach to business and
investment selection
The emergence of indigenous innovation,
domestic consumption and the expansion of
China's manufacturing economy
A lack of awareness among international
business about navigating China’s regulatory
and political environment
A lack of awareness among international
business about navigating China's stakeholder
and communications landscape
Obstacles to achieving objectives for foreign direct investment
81%
19%
22%
64%
73%
25%
85%
15%
Outbound Investment
Outbound Investment & The Five-Year Plan
Q9. Do you believe that the inbound and outbound investment and economic development objectives set out in the 12th Five Year Plan will: 1-10 (1=strongly disagree 10=strongly agree. B: Assist the development of Chinese business seeking to “go global”.
Assisting Chinese corporations as they go global
Agree
Disagree90%
10%
9 in 10 believe the
outbound investment
objectives set in the Plan
will help Chinese
companies expand
globally
Outbound Investment & The Five-Year Plan
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
0 10 20 30 40 50 60 70 80 90
Agree
Disagree
17%
The unequal application of regulation
and legislation in respect of
international versus local companies
A lack of awareness among Chinese
business about navigating the West’s
stakeholder and communications landscape
A lack of awareness among Chinese
business about navigating the West’s
regulatory and political environment
Nationalism and currency
valuation/protectionist issues
A negative perception about China’s investment
motives and strategies
Obstacles to achieving objectives for overseas direct investment by
China
83%
23%
76%
59%
39%
83%
17%
80%
20%
GR Takeaways
The Business, PA and GA Dimension
0 20 40 60 80 100
Agree
Disagree
Make it more difficult to develop and
implement a China-wide GR and PA strategy
Increase corporate government relations and
public affairs activity
Make it more important for foreign companies
in China to have structured government
relations strategies operating as core aspects
of business planning
Focus on investment and economic development will:
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.
8%
91%
69%
20%
62%
35%
Advice for Inbound Investors
• Establish when a problem doesn’t exist
• Don’t just focus on the top
Relationships Matter
• Provincial gov’t bodies can count as much as central gov’t
Beyond Beijing
• Being well known in a home market does not equate to awareness in China
• Global approaches may not apply
Be Local
• Be respectful of decision-makers
• Avoid public criticisms
You are the Guest
• Ministries and agencies can overlap
• Cast a wide net
Repeat, Repeat, Repeat
Advice for Outbound Investors
• Remaining silent and not telling your story is not a strategy
• Overseas clients buy the country first, then the product
Define Yourself, or Others Will
• Meet with local management, employees, suppliers, community leaders
Engage the Stakeholders
• There can be frequently hostile constituencies
• Other cultures can have more open and critical discussions
Anticipate Criticism
• Prepare an on-going diet to keep the media well fed
The Media are Hungry
• Think locally, design personally, brand domestically
Put Feet in Target
Market’s Shoes
For more information Craig Hoy: [email protected] Mark Hass: [email protected]