How social media is impacting public affairs in China

1. &
the PUBLIC AFFAIRS DIALOGUES
THE DRAGON
THE MOUSE
Public affairs and social media in China
An Edelman/PublicAffairsAsia White Paper: December 2009

2. THE DRAGON
& THE MOUSE
SOCIAL MEDIA AND
PUBLIC AFFAIRS IN China
An Edelman/PublicAffairsAsia White Paper - December 2009
This White Paper is produced by Edelman and PublicAffairsAsia.
Research in conjunction with its production was conducted
qualitatively and quantitatively using a survey of public affairs
practitioners and at a high-level roundtable held in Beijing, China
on November 17, 2009.
The survey was conducted over the internet between November 6
and November 13. A total of 132 interviews were submitted by the
end of active data collection.
The roundtable was attended by 26 public affairs and corporate
communications professionals. Representatives and those surveyed
included bluechip MNCs, Chinese corporations, SOEs, The
Ministry of Foreign Affairs, Tsing Hua University, The China
International Public Relations Association, PublicAffairsAsia,
Edelman and Pegasus.
While the opinions conveyed at the seminar have informed this
White Paper, for reasons of confidentiality no individual is directly
quoted or referenced. The views expressed are not necessarily those of
PublicAffairsAsia, Edelman or their subscribers or client base.

3. FOREWORD: ALAN VANDERMOLEN
W hen I meet with clients and non-clients in China, there is one question
which dominates their agendas: What should we be doing with social
media? I get that question from foreign multinationals, from private Chinese
companies from state-owned enterprises (SOEs) and from government departments.
Most often, the question arises within the context of public affairs. In China’s
social media environment, nearly every public issue is fair game: Disaster relief,
mergers and acquisitions, intellectual property rights, anti-monopoly laws,
workers’ rights, environmental practices and health policies to name a few.
Participants and observers are both wrestling with the dynamics of this new
medium. Is open, web-based dialogue helpful or damaging to issues that touch
upon or directly target government policies? Is it too easy to manipulate
content? Are netizens overly sensationalist in their reporting techniques?
With PublicAffairsAsia as our partner -- and backed by the first ever survey
on the topic of social media with public affairs professionals in China –
Edelman convened a closed-door roundtable in Beijing on November 17, 2009,
to ask participants and observers the questions above.
There are no clear answers, but there are clear trends. As China balances being a
global power against loud calls at home to participate in increasingly transparent
dialogues on policy, the implications are far reaching for domestic and foreign
business, for domestic and foreign media and for the government itself.
We hope this White Paper gives you some insight into what is happening on
the “front lines”.
ALAN VANDERMOLEN,
PRESIDENT, EDELMAN ASIA PACIFIC
KEY CONCLUSIONS
INFLUENCE: The majority of PA professionals believe social media is the most
influential medium in China
CAUTION: Western MNCs in China remain cautious as a result of the perceived
inability to control messages in social media environments
EVALUATION: The majority of those who have developed a public affairs and
social media strategy have not yet evaluated its impact
STRATEGY: Moving from a defensive to an offensive PA and social media
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strategy is the key challenge

4. EXECUTIVE SUMMARY
media comment remains difficult in a political system
such as China’s. However one central conclusion is
clear from PublicAffairsAsia/Edelman research for
this White Paper. The majority (66%) of PA prac-
titioners believe social media is the most influential
medium in China – and a similar number expect its
influence to grow over the coming 12 months.
Taking ownership and control
F rom the Sichuan earthquake to the tainted milk
scandal, social media in China is changing the
way corporations and governments engage. Most
SOCIAL MEDIA is, therefore, too important for
public affairs executives in China to leave to others
within the corporate hierarchy, although opinion
recently Coca-Cola’s bid for Huiyuan resulted in is divided on the best strategies for engagement.
online comment reaching fever-pitch. Three key concerns remain about the medium:
Social media allows facts to be checked, distor- that it is often sensationalist, can be driven by
tions exposed, corporate reputation to be tested and nationalism and can be difficult to manage. For
performance/products assessed. It is also driving public affairs practitioners representing Western
debate on policy in China, creating a new forum for multinationals, engagement with social media,
citizen engagement. What was already a challeng- therefore, is not without risk. But that does not
ing PA arena has become more complex still, as 181 mean it is something to be avoided.
million bloggers drawn from a Our research shows an increased fo-
community of 340 million internet TAKE-AWAYS cus among PA professionals on social
users engage in online discussion • Social media = the fastest
media strategies, although evaluation
about contemporary issues in Chi- growing communication still appears patchy – and just eight
na. This transformative landscape, medium in China per cent of survey respondents said
in which anyone with a keyboard their PA department was responsible
and a point of view can join the • Ignoring social media =
reputational/corporate risk
for “strategic social media communica-
debate, is resulting in significant tions” in China.
challenges for senior public affairs • Social media in China Fundamentally the debate centres
practitioners. appears more influential on whether MNCs should view social
than the US and Europe
media as an “active” or “reactive”
Peer pressure medium. Even the most social media
THE EXTENT to which social aware public affairs professional is
media comment is driving outcomes in China often on the back foot, in a crisis scenario, when en-
remains open to discussion, with government figures
gaging with China’s netizens. The challenge, as this
expressing the view that it forms part of the wider
White Paper identifies, is to move from a defensive
“consultative” process but rarely determines the
to an offensive strategy, while maintaining control of
actual outcome. Social media comment in China is
widespread and deeply rooted, and its volume means the message in pursuit of desired policy, legislative
it is increasingly difficult to ignore. or regulatory outcomes.
Disentangling exactly which public policy, govern- CRAIG HOY,
ment or corporate decisions are driven by social EXECUTIVE DIRECTOR, PublicAffairsAsia

5. PRACTITIONER DESCRIPTIONS OF SOCIAL MEDIA
•Internet linked, mass medium - user generated, many-to-many
•Entry criteria - A keyboard and a point of view
THE LANDSCAPE,
•Governments, companies and citizens
are becoming media ‘companies’
OPINIONS & ATTITUDES
SOCIAL MEDIA is redefining communications and
IN NUMBERS the processes of influence in China. It is “filling a
• 338 million internet users in China, with 181 void” through greater digital dialogue – giving an
million bloggers and 155 million people using apparently equal voice to a wide range of consum-
mobile devices for web use (CNNIC - June 2009) ers, corporations and activist groups. The resulting
• 84.3% of Chinese internet users believe that public affairs landscape is more complex, and the
the web is the most important source of infor- volume of discursive social media communications
mation (CNNIC - June 2009)
(often as a sub-set of mainstream websites), is rising
• 74% of public affairs practitioners say
inexorably – despite the restrictions imposed on
social media is “important” to their broader PA
strategy in China (PAA/Edelman November 2009)
online channels in China. This is creating a new
• 67% of public affairs practitioners believe “sphere of cross-influence” where information moves
social media is the most influential, or often rapidly, but which can be difficult to control. Evi-
the most influential, medium on public policy dence suggests China is moving further and faster
in China (PAA/Edelman November 2009) towards the adoption of an influential and trusted
• 60% of PA professionals use social media as mass social media community than many of its
a part of their public affairs strategy in main-
Western counterparts.
land China (PAA/Edelman November 2009)
PUBLIC AFFAIRS practitioners believe SOCIAL MEDIA STATEMENTS
that social media is often the most influ- Agree Somewhat No Somewhat Strongly
ential medium in mainland China – and strongly agree view disagree disagree
expect its importance to grow. They also
confirm that the Chinese leadership is Social media is the
most influential 20% 46% 15% 14% 5%
responsive to its influence, a fact sup- medium in China
ported by the government machine’s Social media will
grow in importance 22% 47% 19% 8% 3%
increasing interaction with the medium. in next 12 months
Yet fears exist that the social media Social media is more
trusted than other 16% 38% 19% 28%
agenda can be driven by nationalism, media and print
and some senior practitioners view it as Chinese govt will
potentially dangerous territory for not respond to
social media
7% 12% 22% 43% 16%
Western MNCs in China. PA profes- Social media
sionals understand that social media is is too much of
a risk
7% 24% 24% 35% 10%
influential, but many have not yet mas-
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Social media is
tered how to utilise this information to impossible to
control
15% 32% 14% 37% 2%
deliver positive public affairs outcomes. 0 20% 40% 60% 80% 100%
Source: Edelman/PublicAffarsAsia survey, November 2009

6. STRATEGY To view the full presentation from the Beijing roundtable visit:
www.publicaffairsasia.com/socialmediapresentation
ACCORDING TO
CASE: MASTER KONG our research many
The bottled water company Master Kong became PA executives are
engaged in controversy after a Bulletin Board post often reluctant to
demanded “Master Kong, where is your water pro-actively utilise
source?”. The post sparked a netizen outcry, social media. While
claiming Master Kong mineral water was merely some companies at the forefront of digital adoption
tap water. Amid accusations of false advertising
believe “marketing product” and “issues manage-
the story transferred to the mainstream media -
ment” cannot be separated online, there is a risk
prompting the firm to admit “everyone does it”
and that a “gap in understanding” had led to the
that social media is mistakenly viewed as a nega-
confusion. tive environment in which to apply public affairs
After regulators stepped in to review bottled techniques. PA practitioners representing Western
water standards an online poll by China Youth MNCs also suggest that too much social media
Daily found that 57 per cent would no longer buy comment is “sensationalist” in nature, and can often
Master Kong water and 73 per cent supporting be compromised, or eclipsed, by nationalism.
strengthened supervision of the water industry. Netizens are closely monitoring Chinese corporate
LESSONS LEARNED:
stories as they break on the web. In recent months
• Social media is the world’s biggest fact checker
• False advertising can be rapidly exposed
the potential sale of Hummer to Tengzhong led to
• Traditional media feeds off social media a flurry of social media comment, and Coca-Cola’s
failed acquisition of Haiyuan came in for similar
TAKE AWAYS: digital cross-examination and comment.
• Social media is rapid media: response times But it is not just the actions of corporations
are important which are coming under netizen scrutiny. Officials
• Government and corporations are both in China are also subject to the forces of the social
subject to the forces of social media
• False claims can spread quickly online media as the below case shows.
• Social media engagement does not always
mean a loss of control THE 70kph HANGZHAO CRASH
• Netizens are suspicious of elites - business
and political In May 2009 the Chinese internet was ablaze
• Celebrity bloggers carry significant influence with comment after exposing the driving
• Bloggers deny that their tone is sensational, record of a wealthy driver, Hu Bin, whose
souped-up vehicle knocked down and killed
but is instead “objective” and geared for a
working class graduate Tan Zhuo. Police ini-
younger audience
tially said the car was being driven at 70kph
The Beijing ‘Public Affairs Dialogue’ and issued a minor rebuke, but in the glare of
internet claims they later conceded that the
driver was going between 81-101kph.
In a culture where some believe money and
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connections can get the wealthy out of trouble,
intense web pressure and scrutiny resulted in
Hu’s previous driving offences being exposed
and a three-year jail sentence handed out.

7. RISKS & REWARDS
IN OPAQUE environments it is still difficult to
TACTICS AND RULES calculate which influencer affected which outcome.
Government figures say that decisions will always be
taken based upon long-established legal or regulatory
foundations. However the volume of social media con-
versation is such that policy formulation and regulatory
decisions are subject to intense scrutiny and comment
– therefore making the decision-making process more
transparent in some respects.
However, as the Coca-Cola case study shows, ignoring
or responding ineffectively to grass roots or digital com-
munications appears to carry significant downside risk –
1. Social media can be a platform for particularly for Western multinationals fearful of increased
strong statements of “national pride” protectionism or creeping nationalism. Social media has
2. Netizens are often anti-establishment
and the web is being used to tackle
increased scrutiny on both the public and private sectors
authority and can result in wrong-doing being rapidly exposed. It
3. Sensationalism/“chauzuo” often has also created a culture where malicious falsehoods can
emerges in online discussion and flourish. But it can also be used to validate positive claims
coverage and drive positive outcomes. Netizens can shape the policy
4. Content is replicable - the “Zhuanzai” agenda and increase transparency.
principle. Expect the same story, true or
not, to materialise in multiple locations
In conclusion, the engagement of public affairs
5. Bad news travels fast; but so can practitioners in these processes will become increas-
positive news if transmitted effectively ingly influential on the wider success or failure of their
companies in China.
EDELMAN’S KEY TIPS: Compiled by: Adam Schokora,
adam.schokora@edelman.com
LISTENING: Develop a sound understanding of the “who, what, and where”. WHO is saying WHAT about issues/
topics relevant to desired communications objectives, and WHERE are they saying it. Brands and companies need
to invest significantly in internet word of mouth (IWOM) conversation audits/monitoring.
PARTICIPATING: Actively participate in relevant conversations identified in ongoing IWOM monitoring - using microb-
logs, social networks, discussion forums, bloggers’ websites, etc.) and dedicated branded digital assets (i.e the brands/
company’s website/blog, etc.).
ENGAGING/RELATIONSHIP BUILDING: Modify and expand your ongoing traditional media relations efforts to
include online platforms/communities and individual influencers (i.e. “media publications” and “journalists” in the
traditional media relations model).
AUTHENTICITY: Champion open dialogue by being transparent and honest, and speaking with an authentic (not
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necessarily a corporate or PR scripted) voice.
AUDIENCE: Your goal in the social media space is not to win an argument; it is to win an audience. It’s important to
remember that popularity does not equal influence. It is not how many people are your “fans” or how much traffic
you get to your site, but rather “who” those people are.

8. TOOLKIT
& TAKE AWAYS
1. Public affairs professionals require insight and analysis about the rapidly-developing social media,
including Chinese language blogs and Bulletin Boards: which often feed the global mainstream media.
The rise of the “celebrity” blogger has given personality to issues of national pride.
2. Rigorous monitoring, strategic engagement and continual impact assessment are required. PA
professionals need to develop transmission skills across a diverse collection of social media formats and
understand how messaging techniques must change in these environments. Take stock of your social
media engagement efforts and be flexible in adjusting your approach.
3. Governmental agencies insist decisions are based on merit, the regulatory framework and the rule of
law, although the proliferation of media requires corporations to examine the quantity and quality of their
social media comment in order to ensure “share of voice”.
4. Greater offensive and proactive use of social media could enhance corporate reputation and deliver
upside “wins”, although more significant engagement and ownership of both the medium and message
will be required by corporations in mainland China for this to be achieved.
5. Sensationalism, nationalism and the different control levels do not mean social media should be off limits for
PA professionals. Instead new strategies of engagement, which tackle these issues, need to be developed as part
of a wider stakeholder and public affairs strategy in China.
6. Failing to proactively use social media can result in missed opportunities to shape the policy, regulatory and
M&A landscape. This could impede growth or damage commercial operation, reputation or development.
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