GR practitioners in China facing overstretch amid toughening operating environment

Government relations professionals operating in mainland China believe they are managing a more challenging operating environment with increasingly inadequate resources. This is the central finding of a survey of GR professionals operating in mainland China conducted by PublicAffairsAsia.

Almost three quarters (72 per cent) of nearly 60 frontline government relations practitioners believed they had inadequate or wholly inadequate resources to meet the increased demands they face. Only one in 10 survey participants believed they had more than adequate capacity to effectively discharge the government relations function.

The survey report comes ahead of The 2015 China Government Affairs Forum where 100 government relations practitioners will meet in Beijing to examine how to drive GR strategies in the era of The China Dream and China’s New Normal. Click here for more details.

Some 72 per cent also believed that the government relations function was “more important to their company’s success” than it was a decade ago – and within that figure 33 per cent cited GR today as “far more important.”

Asked to identify which elements of their roles had become more difficult over the last decade, participants pointed to increased challenges in all areas except monitoring and tracking the policy environment, where new technology has assisted.


Asked to assess whether it had become easier or more difficult to develop government relations strategies in mainland China, participants concluded that the general operating environment had become harder (recording a mean score of seven when asked to describe the environment – with 1 being much easier and 10 much harder). Participants also believed it was proving more difficult to gain access to policymakers (recording a score of six on the same index).

Government relations practitioners also believed it was generally more difficult to navigate and comply with the regulatory environment (recording 6.5 on the index) and that influencing policy and regulation had also become more challenging over the last decade (scoring six on the index).

The only exception was the ability to monitor policy and regulation, where survey participants said they encountered largely the same situation as a decade ago (scoring 5.1 – “about the same” – on the index).


The challenges:

In terms of specific challenges, participants, which were largely drawn from an MNC base of companies already operating in mainland China, cited several key concerns:

• Dealing with an ever changing operating environment set against increased difficulty to gain access to officials or clarification from official government bodies.

• Difficulties in assessing what government objectives are and difficulties in aligning what business leaders and political leaders are trying to achieve.

• A lack of transparency in the development of policy and a scarcity of qualified GR professionals to process what they information they access or receive.

• The lack of fair treatment of foreign companies – with FIEs and joint ventures not being viewed as local companies and an increased view that FDI is no longer important.

• An apparent shift towards more general but more wide reaching regulation where it is not absolutely clear what can and what cannot be done.

Long lead times in the effective implementation of policy and weak awareness on compliance and integrity issues among government agencies, state owned enterprises and associations.

• Ongoing conflict and confusion between competing bodies involved in policy implementation and regulatory enforcement.

From a GR industry perspective, survey participants also highlighted concerns that the government relations talent pool remains too small. While this is creating a favourable market for professionals seeking to advance their careers, it is impacting the ability of MNCs to effectively use the GR function defend and develop their business in China’s increasingly challenging environment.


The opportunities:

When asked to cite what current opportunities the profession saw in China, several key themes stood out:

• In China’s New Normal, GR professionals believe they have an increased role to play in collectively helping define corporate strategy in China to leverage on the market potentials.

• China’s more connected and vocal stakeholder groups are creating new opportunities to engage in multi-lateral and cross-cutting communications and stakeholder engagement.

• A greater emphasis on the rule of law and moves towards a rules-based system of government should reduce political risk providing the system is implemented fairly across business. Concerted efforts to tackle corruption are encouraging for business.

• Practitioners believe that despite the overall deterioration in the operating, government remains keen to engage foreign MNCs in key sectors such as civil aviation, biofuel and the creative industries.

From a GR practitioner perspective, professionals highlighted the move away from direct contact with officials towards more public forms of engagement between government and business, such as posting consultations and draft regulations online, as a significant move away from a purely guanxi-based GR to professional driven engagement.


About the survey:
Some 56 practitioners participated in the online survey during the period 12 April to 12 May. Some 72% were based in Greater China – with 93% of their companies currently operating on the mainland. Only two respondents said their company did not currently have any GR staff operating in mainland China.