By Robert MAGYAR, Senior Executive Director,
Jiawen MA, Associate Director – Public Affairs,
and Leyla JIANG, Associate Director – Healthcare

Turbulence has replaced constant change. Technological, economic, and political disruptions of the past three decades created an environment, where managing businesses against a backdrop of relentless structural transformation was the norm. Corporations and policymakers with acrobatic levels of flexibility and agility have done well; others were left behind. Today, however, nobody is safe. New policies abruptly launched on twitter, untruths amplified by social media, and scientific expertise rejected by emotional arguments cannot be countered by rational decision-making.

Companies active in China are not shielded from this turbulence. Economic and technological competition with the US greatly affects trade relations. The shifting economic landscape in Asia undermines the confidence of once-stable markets, such as Hong Kong. And as the People’s Republic of China approaches its 70th anniversary, domestic centralization of political power is prompting a new level of caution.

North Head conducted a survey of corporate behavior during the week of 19 to 23 August, specifically looking at how companies seek to interact with the Chinese government in these turbulent times and whether any significant change is observed in the government’s responses. Our most important conclusion is that both companies and the government place increased importance on working closely together in order to mitigate an unstable environment.

Interviews conducted with in-house government relations teams of over a dozen large multinational companies with significant business in China confirmed that, while currently there is only limited impact on business performance caused by trade friction and other external factors, grave concerns about a prolonged trade war are widespread. In fact, most respondents confirmed that routine government relations work proceeds with little impact. To balance against growing concerns, however, the government is actively offering new opportunities for engagement at a higher level, accelerating the pace of reforms beneficial to companies through all levels of the government, and becoming more attuned to the concerns of corporations committed to China. Clearly, attitudes are driven more by fears of a worsening environ- ment than real negative impacts.

Turning these opportunities into business gains requires a good understanding of government priorities, smart strategies to align corporate objectives with policymakers’ goals, and seasoned in-house government relations teams focusing on the most effective channels for engaging various government agencies.Commitment and collaboration seem to be the most effective tools for riding out turbulence and building trust. Is your government relations team properly equipped for this?

North Head flash survey on the current government relations environment in China

Between 19 and 23 August, North Head conducted an all-interview survey with government relations teams of a dozen multinational companies with significant business interests in China about the nature of their government relations work and any changes they have observed in government activities recently due to external factors. These companies cover the online and offline retail, FMCGs, healthcare, nutrition, and manufacturing industries and have been established in China for many years. North Head thanks them for their participation in the survey.

The three main takeaways of the flash survey (shown in the accompanying chart) indicate that both corporations and the government are seeking to engage more widely and collaborate closely in order to temper the turbulence of the external environment.





North Head is a strategic communications consultancy in China focusing on corporate reputation building and government relations, supporting multinational companies, industry associations, and government agencies in their communications activities and stakeholder engagement. (http://northhead.com)

Please send any questions about the flash survey’s findings and requests if you need support for corporate communications, public affairs, or government relations work in China and in the Asian region to rmagyar@northheadcomms.com