Telum caught up with Robert Magyar, as he shares a few top tips that companies should know when it comes to engaging with the Chinese government as well as other significant findings from North Head's recent survey analysing COVID-19's impact on the healthcare industry. North Head is active in public affairs and government relations. What are some common misconceptions about this space in Mainland China that may surprise people?
What might be surprising is that the policy process and government engagement in Mainland China is actually very organised and transparent. The Chinese government has been going through a dynamic reform phase for the past two decades and has been struggling to keep up with the technology changes (especially in healthcare), so they are very open to listening to company experts who can bring in knowledge and international experience to help set their regulations and policies. Legislation in Mainland China is built in a way where, different from many other countries, even foreign companies and MNCs can be part of the public consultation and have a clear chance to influence that process. While it might be true that you need ‘guan xi’ (personal relationship) when you want to meet someone high up, it is essentially about understanding the government priorities and what your company can bring to the table when you aim to engage in policy discussions.
Another aspect is that in order to properly conduct their businesses in Mainland China, companies must first look at what the priorities of the Chinese government are and work around that to engage with their stakeholders. This is of course different to how companies run their government relations in many other countries, where companies get to prioritise their own or their consumers' issues. Do you think foreign companies now have a better understanding on how to enter the Chinese market?
We would hope that companies right now are better at managing this; unfortunately that is mostly not true. When companies initially enter the Mainland China market, they often look at this move from a political perspective - how is the current situation between the US and Mainland China and their trade conflicts going to affect me? In fact, because the market is so big in Mainland China, companies should think from a technical and neutral point of view and make their own business calculations. Remember there are 1.4 billion people and 32 provinces in the country, and the central and provincial governments operate differently as well.What were some PR strategies implemented by the Chinese government and companies that have proved particularly effective in containing the coronavirus outbreak?
Due to the political structure of the Chinese government, communications has been its biggest and most effective tool it used to contain the outbreak. At the very beginning, the government was quick to set up systems for those who have smartphones in Mainland China to obtain relevant information promptly. Should I stay in lockdown? How can I get my food during lockdown? If I were sick, what do I need to do and where can I go? These information would come in daily through our phones, and we had clear instructions on what to do and what not to do. This was extremely helpful for people in general to organise their lives during the pandemic.
At a company level, most firms have followed the guidelines very closely by allowing people to work from home for as long as possible and making sure that they have the protective gears they needed when they came into the office. The fact that many big companies are state-owned is also a safety net to ensure most workers would be able to return to their jobs. And for the huge percentage of population who were not working during lockdown, under the country’s social and healthcare system, the government also pays for their tests and treatments, so they wouldn’t feel burdened by them.North Head recently conducted a survey to analyse COVID-19's impact on Mainland China’s pharmaceutical and healthcare industry. Can you share with us any new or surprising insights?
The immense growth of the internet healthcare sector is beyond what we expected. Prior to the pandemic, internet healthcare was already on an upward trajectory, in that companies like Tencent and Alibaba as well as insurance firms have been expanding their healthcare services and setting up online systems for the past few years. But its growth really skyrocketed during the pandemic; for example, Ping An’s Good Doctor app’s monthly active users grew from 65 million in 2019 to over one billion right now. The elderly population, who were not the original targets of internet healthcare, have also become big users as they are the group most affected by COVID-19.
On the downside, the pandemic forced many non-COVID-19 clinical trials to slow down or stop. Due to the government’s emphasis on COVID-19, this naturally trumps everything else in the healthcare framework. There is also a natural reluctance for patients to take part in clinical trials, asthey would need to spend additional time in hospital. However we expect this to change in the coming months.
Another surprising finding is the amount of positive feedback multinational pharmaceutical companies had towards the Chinese government’s response to the pandemic. We originally anticipated lots of negative reactions and comments on how the government had shut down industries and affected the supply chains, but most respondents praised the governments for being quick to introduce new regulations for internet healthcare, allow companies to conduct COVID-19 clinical trials and research, and make sure people get their benefits and prescriptions even when they don’t visit the doctor.Finally, is internet healthcare the future to the healthcare ecosystem?
I really do think so. Internet healthcare enables medical trainings to be conducted through the Internet, and this alleviates a few shortcomings of the healthcare systems around the world. For example, the costs of managing chronic diseases is one of the most expensive in China, but with internet healthcare, both the prevention and general management of it can be improved. And coupled with the introduction of 5G, even telesurgery can take place. Yes, there would be risks and dangers to internet healthcare, but I do believe this is the best way to help us in the long run.To know more about North Head's Perception Survey Report, click here or get in touch with Robert at email@example.com