Managing Stakeholder Relations for Swedish Businesses in China Tom - - PowerPoint PPT Presentation

A changing communications landscape:

Managing Stakeholder Relations for Swedish Businesses in China

Tom Grimmer Senior Partner at Kreab China

My Background & Experience

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Content

About Kreab

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China's evolving FDI policies

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How to communicate the situation in China to internal and external stakeholders

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About Kreab

Our Vision

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Kreab strives to be the premier consulting firm worldwide integrating Communication Strategy, Reputation Management and Public Affairs. We bring Creativity, Innovation and Collaboration to everything we do. [KRE] – short for CREATIVE INFORMATION in Swedish [AB] – an acronym for COMPANY

Corporate Communications

▪ Corporate Positioning and Messaging ▪ Media Relations ▪ Media Training ▪ Management Profiling and Leadership Communications ▪ Thought Leadership Development ▪ Employee Engagement ▪ Crisis Communications ▪ Change Management ▪ Social Media Strategy

Financial Communications Public Affairs

▪ M&A Transactions ▪ IPO/Capital Raising ▪ Investor Relations ▪ Alternative Investments ▪ Privatization ▪ Corporate Defense ▪ Government Relations ▪ Corporate Social Responsibility ▪ Regulatory Intelligence ▪ Stakeholder Mapping ▪ Stakeholder Engagement ▪ Policy Advocacy

Protect Your Reputation Build Higher Credibility Obtain More Access

Strategic Expertise with an Integrated Approach

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Asia

China: Beijing | Hong Kong India: New Delhi | Hyderabad | Mumbai | Bangalore | Chennai Japan: Tokyo Singapore

Europe

Germany: Berlin | Frankfurt | Stuttgart Belgium: Brussels Spain: Madrid | Barcelona Finland: Helsinki Hungary: Budapest Italy: Roma | Genova | Milan Norway: Oslo Poland: Warsaw Portugal: Lisbon United Kingdom: London Rumania: Bucharest Russia: Moscow Sweden: Stockholm

Africa

Morocco: Rabat

Latin America

Argentina: Buenos Aires Bolivia: Santa Cruz Brazil: Brasilia | Sao Paulo Chile: Santiago de Chile Colombia: Bogota Cuba: La Habana Ecuador: Quito Panama: Ciudad de Panama Peru: Lima

• Offices
• Affiliates

Our Global Presence

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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 in China

Regulatory intelligence in China is not just an asset for businesses—it is the key to building a firm foundation for current

• perations 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.

Regulatory Intelligence

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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 Engage followers Conduct data analysis & social listening Develop quality content 12

China’s Evolving FDI Policies

Foreign Direct Investment in China, 1979-2018 Source: MOFCOM FDI Statistics, 2019

China’s Evolving FDI Policies

First phase, 1979–1991

• Recovery from the Great Leap

Forward and Cultural Revolution

• “Open-door policy” in late 1978
• Four special economic zones

established in 1979; opened more areas to FDI

• 1989 Tiananmen Square

protests

Third phase, 2002–now

• Entry to WTO from 2002
• A series of law amendments and enactments

Second phase, 1992- 2001

• Deng Xiaoping's

southern tour in 1992

• Nationwide

application of open policies for FDI

• Opened more areas

for foreign investors

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FDI in China

has been and will continue to be important for actors in the Chinese market

FDI inflows, top 20 host economies, 2018 and 2019 (billions of dollars) Source: UNCTAD, FDI/MNE database

Key progress under the Xi-Li Administration

Foreign Investment Law

Enacted on March 15, 2019 and took effect on January 1, 2020

2020 Two Sessions

May 2020

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Unstable geopolitical landscape

• i.e. US, EU, Hong

Kong affairs

• Fraught relations with

smaller economies, neighbours

Great flux in regulatory changes Lack of transparency in government procedures Uneven playing field

• Vertical system and

“top down” approach causes unpredictability

• i.e. license and

approval

• i.e. subsidies, market

access restrictions, pressures to transfer technology, and other support for domestic competitors (especially SOEs)

Other Regulatory Challenges Faced in China

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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”

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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.

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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.

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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.

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IKEA

IKEA’s product tags and website in 2018

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IKEA’s current website Chinese netizens complaining about IKEA’s product tags on Weibo

Dolce & Gabbana (2018)

Racist Advertising Campaign in 2018 Not the first time: D&G’s ads in 2017

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Cathay Pacific Airways (2019)

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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

• utlook.
• 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.

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Best Practices for External Stakeholder Communication

▪ Align external communication materials and messaging across all languages and markets ▪ Avoid market conflicts ▪ Avoid taking political stances on hot-button issues ▪ Consistently self-check and develop an internal policy for risk assessment and management

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Best Practices for Local Branches to Communicate with Headquarters

▪ Knowledge sharing: give the full picture with timely updates

• Media and policy monitoring
• Analysis and context

▪ Understand their perception of events. Read what they read ▪ Cultivate key communication “intermediaries” in country offices and at headquarters ▪ Build a system: email is not enough

• Email < Call < Video < Face-to-face < Country visits

▪ Expand information sharing beyond the professional context

• E.g. LinkedIn

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