A changing communications landscape: Managing Stakeholder Relations for Swedish Businesses in China Tom Grimmer Senior Partner at Kreab China
My Background & Experience 3
Content 01 About Kreab 02 China's evolving FDI policies 03 How to communicate the situation in China to internal and external stakeholders
About Kreab
Our Vision Kreab strives to be the premier consulting firm worldwide integrating Communication Strategy , Get a modern PowerPoint Reputation Management and Public Affairs. Presentation that is beautifully designed. We bring Creativity , Innovation and Collaboration to everything we do. [KRE] – short for CREATIVE INFORMATION in Swedish [AB] – an acronym for COMPANY
Strategic Expertise with an Integrated Approach Corporate Positioning and Messaging ▪ Media Relations Protect Your Reputation ▪ Media Training ▪ Management Profiling and Leadership Communications ▪ Thought Leadership Development ▪ Employee Engagement ▪ Crisis Communications ▪ Change Management ▪ Social Media Strategy ▪ Corporate Communications M&A Transactions ▪ IPO/Capital Raising ▪ Investor Relations ▪ Alternative Investments ▪ Privatization ▪ Corporate Defense ▪ Financial Government Relations ▪ Public Affairs Communications Corporate Social Responsibility ▪ Regulatory Intelligence ▪ Stakeholder Mapping ▪ Stakeholder Engagement ▪ Obtain More Access Build Higher Credibility Policy Advocacy ▪ 7
Our Global Presence Asia China: Beijing | Hong Kong India: New Delhi | Argentina: Buenos Aires Hyderabad | Mumbai | Bolivia: Santa Cruz Bangalore | Chennai Brazil: Brasilia | Sao Paulo Japan: Tokyo Chile: Santiago de Chile Singapore Europe Colombia: Bogota Cuba: La Habana Ecuador: Quito Panama: Ciudad de Panama Germany: Berlin | Frankfurt | Peru: Lima Stuttgart Africa Belgium: Brussels Latin America Spain: Madrid | Barcelona Finland: Helsinki Morocco: Rabat Hungary: Budapest Italy: Roma | Genova | Milan Norway: Oslo Poland: Warsaw Portugal: Lisbon Offices • United Kingdom: London Affiliates • Rumania: Bucharest Russia: Moscow Sweden: Stockholm 8
Kreab China 1992 – present ▪ We attach special importance to corporate social responsibility (CSR) and have built CSR into our core business values ▪ We believe achieving good business while having a positive social impact can be done at the same time ▪ A boutique agency with a diverse and multi-cultural team
Media Expertise & Resources
Regulatory Intelligence Regulatory intelligence in China Regulatory intelligence in China is not just an asset for businesses — it is the key to building a firm foundation for current operations and developing a strategy for future in-market and global decisions. Policy and regulations in China change rapidly and in what often appear to be complicated ways. China’s financial market infrastructure sector is seeing increased regulation and innovation, particularly in the fintech, critical infrastructure, cybersecurity, and blockchain industries. Domestic politics and foreign affairs also heavily influence local policy developments, which requires a rich knowledge of key influencers in government ministries, thinks tanks and academia. With our extensive local insight, Kreab will untangle complex regulatory developments to make them clear, understandable, and actionable. Our capabilities Kreab Beijing offers deep and extensive expertise in China’s financial services sector and the healthcare industry, with a special focus on their policy and regulatory environments. Clients benefit from detailed stakeholder mapping for all governmental ministries, departments, agencies, institutions, and industry leaders. By monitoring policy across diverse regulatory bodies and the influence exerted by industry associations and academics, Kreab can contextualise ongoing regulatory efforts and offer insights into potential developments. Personalised engagement services connect clients with key stakeholders and open communication lines for policy dialogue and coalition-building. 11
Full Range of Digital Services From 0 to 1: building social media accounts Tailor-made social media strategy Design creative campaigns Advise on potential risks Visualize messages Develop quality content Conduct data analysis & social listening Engage followers 12
China’s Evolving FDI Policies
China’s Evolving FDI Policies Foreign Direct Investment in China, 1979-2018 Source: MOFCOM FDI Statistics, 2019 First phase, 1979 – 1991 Second phase, 1992- Third phase, 2002 – now Recovery from the Great Leap 2001 Entry to WTO from 2002 • • Forward and Cultural Revolution A series of law amendments and enactments • Deng Xiaoping's • “Open - door policy” in late 1978 • southern tour in 1992 Four special economic zones • • Nationwide established in 1979; opened application of open more areas to FDI policies for FDI 1989 Tiananmen Square • • Opened more areas 14 protests for foreign investors
FDI in China has been and will continue to be important for actors in the Chinese market Key progress under the Xi-Li Administration 2020 Two Sessions Foreign Investment Law May 2020 Enacted on March 15, 2019 and took effect on January 1, 2020 FDI inflows, top 20 host economies, 2018 and 2019 (billions of dollars) Source: UNCTAD, FDI/MNE database 15
Other Regulatory Challenges Faced in China Lack of transparency Great flux in Unstable geopolitical Uneven playing field in government regulatory changes landscape procedures i.e. license and i.e. subsidies, market i.e. US, EU, Hong Vertical system and • • • • approval access restrictions, Kong affairs “top down” approach pressures to transfer causes technology, and other Fraught relations with unpredictability • support for domestic smaller economies, competitors (especially neighbours SOEs) 16
How to Communicate the Situation in China to Internal and External Stakeholders
The Cultural Context ▪ A significant thing in the Chinese psyche that foreign companies need to understand is the humiliation that China feels it has been subjected to throughout history . ▪ Many of the issues that people get upset about in China trace back to this. Chinese netizens are often quick to latch on to related issues , including: Foreign companies’ behavior in China • Positions on Hong Kong and Taiwan (non-negotiable) • Positions on any issue that China considers “internal affairs”, including human rights or • matters of national pride (COVID-19 reaction) Anything perceived to be condescending or latent-racist attitudes • Anything suggesting China’s rise is a threat, or that China needs to be “contained ” • 18
Bayer Jogger Crisis • A foreign employee of Bayer in China was filmed jogging without a mask during the height of the outbreak and was involved in an altercation when she was confronted in the street. • Netizens unearthed the employee’s identity and Bayer became involved — netizens demanded to know why the employee wasn’t informed of local regulations by Bayer and then did not follow them. • Bayer responded by firing the employee and releasing a statement to the public. 19
Webpage Crisis • The headquarters of a global organization maintains the website instead of the China country office. • The language on the Chinese webpage was changed to reflect a different message than the message in other languages’ webpages, and the local office was not consulted on the change. • The difference in messages resulted in a strong reaction from the Chinese audience on social media — netizens felt that China was receiving different treatment and information from the rest of the world. • The organization was forced to correct the difference in the messages and issue a statement on the mistake. 20
HSBC & Standard Chartered • Beijing announced its decision at the end of May's Two Sessions to deliberate adopting Hong Kong national security law. • On June 4, HSBC and Standard Chartered both issued statements in support of the proposed law. • Immediate backlash ensued, primarily from the UK • Media in Hong Kong, the UK, mainland China, and eventually globally, picked up the story. • HSBC faced criticism in the past for not siding with Beijing, but the bank is now facing criticism from UK and US politicians and industry leaders for taking a stance. 21
IKEA Chinese netizens complaining IKEA’s current website about IKEA’s product tags on Weib o IKEA’s product tags and website in 2018 22
Dolce & Gabbana (2018) Not the first time: D&G’s ads in 2017 Racist Advertising Campaign in 2018 23
Cathay Pacific Airways (2019) 24
UBS Top Economist (2019) • UBS economist Paul Donovan made the “Chinese pig” comment in an analysis of the country’s African swine fever epidemic. He was attempting to explain why the outbreak should not concern investors eyeing the international inflation outlook. • In response, one of China’s biggest state -owned infrastructure companies, China Railway Construction Corp, decided against hiring UBS as a joint global coordinator on a dollar-bond sale. • Haitong International Securities, the Hong Kong unit of Chinese brokerage Haitong Securities Co, said it has suspended all collaboration with UBS. 25
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