The third annual Edelman/PublicAffairsAsia Dialogue examines issues and opportunities around Trade, Investment, and China's 12th Five-Year Plan.

1. 2011 China Public Affairs Dialogue
Trade, Investment and China’s 12th Five-Year Plan

2. State of Trade

3. 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

4. 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

5. The Future Looks Bright
Sense of future economic and trade
development between China, Europe and US
Despite global economic
uncertainty and fears
Very Optimistic 11% over the sustainability of
China’s economic
Optimistic performance, senior
66% management in global
Very Pessimistic 0% industry and commerce
remain optimistic about
Pessimistic 20% future economic and
trade developments
Hold no view 3% between Europe, US and
China.
0 10 20 30 40 50 60 70
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?

6. Investment & The Five-Year Plan
Opportunities abound for inbound and outbound investment
80
70
77%
68% Strong agreement that
60 current reforms will both
enhance business
50
opportunities for China in
40 Agree the West, and enhance
Disagree business opportunities
30
28% for international business
20 23% in China
10
0
Enhance opportunities Enhance opportunities
for China business in for international
the West business in China
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.

7. Everyone Wants in on China
1st in Average Rating China 45% Ranked as
of Importance “Most Important”
1.84
2nd US 30% China “most important” in
2.18 strategic economic and trade
terms.
3rd Asia (other than China) 20% Asked to rank from 1-5 (1 being
2.63 most important) China rates
significantly ahead of US and
4th EU 9% Asia.
2.72
5th LatAm 4%
3.67
6th Africa 3%
4.41
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.

8. Inbound Investment

9. Inbound Investment & The Five-Year Plan
Greater engagement by Chinese government in
the development of industry and economy is
beckoning Over three quarters
agree that objectives set
out in the 12th Five-Year
Plan will lead to greater
23%
engagement by the
government.
Agree
77% This could be construed
Disagree
as more state control of
enterprise, necessitating
the need for greater PA
and GR capabilities.
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.

10. Inbound Investment & The Five-Year Plan
Obstacles to achieving objectives for foreign direct investment
A lack of awareness among international
business about navigating China's stakeholder
and communications landscape
81%
19%
A lack of awareness among international
business about navigating China’s regulatory 78%
and political environment 22%
The emergence of indigenous innovation, 64% Agree
domestic consumption and the expansion of
35% Disagree
China's manufacturing economy
A pro-China approach to business and 73%
investment selection 25%
The regulatory and legislative 85%
environment in mainland China 15%
0 10 20 30 40 50 60 70 80 90
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

11. Outbound Investment

12. Outbound Investment & The Five-Year Plan
Assisting Chinese corporations as they
go global
10% 9 in 10 believe the
outbound investment
objectives set in the Plan
will help Chinese
Agree companies expand
90% Disagree globally
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”.

13. Outbound Investment & The Five-Year Plan
Obstacles to achieving objectives for overseas direct investment by
China
A lack of awareness among Chinese
business about navigating the West’s 83%
stakeholder and communications landscape
17%
A lack of awareness among Chinese
business about navigating the West’s 80%
regulatory and political environment
20%
Agree
The unequal application of regulation 59%
Disagree
and legislation in respect of
39%
international versus local companies
76%
Nationalism and currency
valuation/protectionist issues 23%
A negative perception about China’s investment 83%
motives and strategies
17%
0 10 20 30 40 50 60 70 80 90
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

14. GR Takeaways

15. The Business, PA and GA Dimension
Focus on investment and economic development will:
Make it more important for foreign companies
91%
in China to have structured government
relations strategies operating as core aspects 8%
of business planning
69%
Agree
Increase corporate government relations and Disagree
public affairs activity
20%
35%
Make it more difficult to develop and
62%
implement a China-wide GR and PA strategy
0 20 40 60 80 100
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.

16. Advice for Inbound Investors
• Establish when a problem
Relationships doesn’t exist
Matter • Don’t just focus on the top
• Be respectful of
You are the decision-makers
Guest • Avoid public criticisms
Beyond • Provincial gov’t bodies can
count as much as central
Beijing gov’t
Repeat, • Ministries and agencies
Repeat, can overlap
• Being well known in a home Repeat • Cast a wide net
market does not equate to
Be Local awareness in China
• Global approaches may not
apply

17. Advice for Outbound Investors
• Remaining silent and not
Define telling your story is not a
Yourself, or strategy
Others Will • Overseas clients buy the
country first, then the product • Prepare an on-going diet
The Media to keep the media well
are Hungry fed
Engage the • Meet with local management,
employees, suppliers,
Stakeholders community leaders
Put Feet in
• Think locally, design
Target personally, brand
Market’s domestically
Anticipate • There can be frequently hostile
constituencies Shoes
Criticism • Other cultures can have more
open and critical discussions

18. For more information
Craig Hoy: craighoy@publicaffairsasia.com
Mark Hass: mark.hass@edelman.com