Latest / The Pulse of Politics / EP#10 - Why China Is No Longer Just a Market: Cynthia Xing on Geopolitics, AI & Boardroom Strategy
Transcript
- Silvan: Politics moves faster than ever, and uncertainty is the new normal. Welcome to The Pulse of Politics, the podcast about public affairs and how to navigate an unpredictable world. Each episode brings you real cases, best practices, and a look at how AI is reshaping policy work. Let's get started. Here's your host, Sylvan. Cynthia, a very well welcome to the Pulse of Politics podcast. It's a pleasure and a huge honor to have as our guest today. A warm welcome. Thank you so much. Thank you for having me, Sewan. You are the managing director and the head of Edelman Public and Government Affairs in the Greater China area. You are also a former partner, actually the youngest ever partner at the Yuan Associates based in Beijing. And today we want to talk about understanding China, why public affairs has become a boardroom discipline. And I would actually like to start with your own journey and personal background. You have spent more than two decades helping multinational companies navigate China, and I wonder looking back to when you first entered the profession, what was it like providing this service in China and also what did or does success in public affairs in China look like? Well, thank you for having me again. ⁓ that's an excellent question because if I'm honest, my answer today is completely different from the one I would have given twenty years ago. When I first started, I thought ⁓ success was measured by access. So back then, my main focus was on questions like could I understand the policy? Could I identify the right government stakeholder? Could I arrange meetings that helped solve the client's problem? I even recall one year when I organized more than three hundred government meetings for a single client. At that time I deeply believed that as a professional milestone. But as I gained more experience, I realized that I had misunderstood where true value lies. Meetings are important, but they are just the starting point, not the end goal. The real challenge is helping an organization become institutionally understood and trusted. Over time I noticed that the companies that consistently succeed in China are not necessarily those with the greatest access. Success is far more about understanding how China's political, regulatory, commercial institutions interact and how to adjust decision making in response. So today I see my role less as simply public affairs and more as helping leadership teams build strategic intelligence. This means developing a deep understanding of how institutions evolve so boards can make informed business decision in an increasingly complex world. I I love this perspective and also the evolution that you described. I think that's a a a beautiful sort of Change or also learning curve in that sense. Now, when you look at public affairs, it has obviously evolved enormously alongside China's own development. You just said how it evolved from your professional standpoint, but also China's own development is really remarkable. Yet I still meet executives who think that public affairs is something that you can just call upon when you have, as you said, a regulatory issue or a government meeting that you need to have arranged. Or a crisis to manage. So what do international executives still fundamentally misunderstand about public affairs in China today in twenty twenty six? Well, that's a big question. I think that question actually goes much deeper than public affairs. It is really a question about how companies or organizations think about China itself. As I said, twenty years ago, many multinational companies only see China as a market to sell their products or source manufacturing. Today the questions I hear in boardrooms are very different. They are now asking about geopolitics, supply chain's resilience, industrial policies, and long term competitiveness in a rapidly ever changing landscape. Those are no longer just public affairs questions, they are leadership questions. That's why I believe public affairs has become a boardroom discipline. Its role is not simply to facilitate communication with government agencies, but to help the organizations to make better strategic decision. And ⁓ if I look back, I think one of the biggest misconception is that public affairs begins once government got involved. In reality, in practice, if government is only entering the conversation at that stage. you're already behind. The best public affairs teams help leadership understand the operating environment before major business decisions are taken. Companies usually invest in market intelligence and competitive intelligence. More and more we see they also need institutional intelligence to understand how political institutions, policy makers, Industry associations, chambers of commerce, policy priorities and commercial realities interact and influence each other. That understanding allow boards to anticipate changes rather than just simply react to them. This is so fascinating. So if I understand you correctly, the real value of public affairs today, it's not influencing decisions, it's actually about improving decisions. Exactly. I think advocacy is still a very important part of our day to day job and work, but without a deep understanding of the business climate, it rarely produce any meaningful results. The company that build long term relationships invest significant time in understanding institutional objectives as well as commercial ones. Government stakeholders in China have long institutional memories. If you constantly show that you understand and appreciate the direction in which the country is moving and contribute constructively, trust accumulates. I always tell this to my clients that access opens the first meeting. Institutional trust determines the next fifty. I love that perspective. It's a very long term thinking. In in that perspective, I also wonder with with your experience of of working in China. Has China become more difficult or maybe even easier to do public affairs in? Well yes and no. To me, I think the real question is whether China has become more important. Today you could say China plays a pivotal role in global supply chains, manufacturing, healthcare, artificial intelligence, trade and investment decisions affecting almost every industry worldwide. For company ⁓ everywhere, China has evolved from being a country strategy into part of global strategy. I always tell my clients, You will need a China strategy even if you do not directly operate in China. Once you see that way, public affairs is no longer about managing one individual market. It becomes part of ⁓ helping leadership navigate the increasingly interconnected and complex world. Talking about China and its transformation, you have witnessed it for over two decades and What do international business leaders most often fail to appreciate about how China itself has changed? Because it's remarkable but also incredible to look back the about the transformation, development, and growth that you have seen in China? Yeah, absolutely. In my opinion, perhaps the most common misunderstanding is that people still talk about China like it's the same country they knew ten or fifteen years ago, even five years ago. Guess what? It Isn't. China has changed economically, technologically, institutionally and internationally. Yet many assumptions about China have not kept pace and remain outdated. When I began my career, most of the discussion centered on market access for sure, investment opportunities and understanding government decision making processes. Those issues still matter, but today they sit within a much broader strategic context. China is now one of the world's leading sources of innovation in areas such as digital platforms, advanced manufacturing and artificial intelligence. Just this Tuesday, China announced its expectations that the AI sector will achieve year on year growth of thirty percent, building on a market that already surpassed the maybe one trillion yuan in twenty twenty five. So I would say policy has become more sophisticated, domestic companies have become globally competitive, and the Chinese government's expectations to multinationals have evolved alongside those developments. That means foreign companies cannot rely on yesterday's assumptions. They need to understand where China is going, not simply where it has come from. That makes a lot of sense and Nevertheless, I I hear many executives say that the environment it feels more uncertain today. Is it uncertain now or is it simply sort of the price of doing business in an in a national or global context? I would say every major market has become more uncertain and in that respect, China is not a unique or an exemption. What set China apart is the rapid pace at which political, technological and commercial changes influence one another. I would say five years ago, a board might have discussed topics like geopolitics, supply chains, technology policy and sustainability as completely separate agenda items. Today, they are all interconnected. That is why leadership teams increasingly need a more integrated way of thinking. Good public affairs is no longer just about tracking individual policy updates. It is about interpreting how multiple trends combine to reshape the commercial reality. And I wonder because you work with many CEOs, I assume, what advice would you give to a CEO approaching China today? To to have success in China today? What would your recommendation, your tips be? I probably gotta charge you for that. That's what I do for a living. But I would say three things on top of my mind. Stay curious. Avoid simplistic narratives. Invest time in understanding institutions before drawing conclusions. More and more importantly, I think you need to resist The temptation to see China only through the lens of today's headlines. Of course headlines capture moments, but strategy requires understanding direction. The organizations that perform best over time are usually those prepared to think beyond the immediate news cycle and build relationship based on consistency, credibility and long term engagement. That's very, very great tip. So people who need help executing that, they can reach out and hire you for support. Yeah, I will send you the the bill. Fantastic. I also wanna come back to your personal career. You spent many years at Yuan Associates, perhaps the first truly Chinese public affairs company in China, before joining Edelman. And I wonder how did that transition change the way that you think about public affairs and business strategy sort of Seeing China now through a global lens with the link to to Edelman. Yeah, that's a great question. I think it changed my perspective fundamentally. Working at a UN Associates, as you said, that's the the true government affairs or public affairs company in China. That gives me a thorough grounding in understanding three things China's politics, policies, and governments. as well as to appreciate that understanding always comes before advocacy. When I moved to Edelman, my horizon of course broadened significantly. I was no longer looking at China only from within China. I began to think about how do I help my clients link Beijing with other areas Washington DC, Ottawa, Brussels, London, Singapore and their global corporate headquarters. That reflects how business is conducted today. China cannot be separated from a wider or broader business strategies. And I wonder has that also changed the questions that clients ask you to help them with, the topics to help them with? Absolutely. Earlier in my career, the big d the discussion always began with how do we enter China? How do we invest in China? But today it begins with how do we make good business decisions in a world increasingly shaped by China. Now you see the difference, issues such like geopolitical risk, supply chains, industry strategy, technology policy and data governance, you name it, have all become core questions for the senior leadership teams. My role has also evolved alongside, I think it's from facilitating engagement with China. To helping worlds connect developments inside China with strategic decision elsewhere. And I wonder, since you now are with Edelman, does it what what is sort of the particular advantage or the unique selling proposition that Edelman adds to that equation? Yuan Associates is a boutique firm focusing on China public affairs dedicately and doing really, really well, but they have their limitation. In Edelman, of course, providing a global network, it allows us to see the same issues through multiple institutional license lenses simultaneously. That broader perspective ⁓ helps clients to reconcile different expectations across market. You cannot make business decisions only in Beijing. So my my value I don't see is simply to explain China to the rest of the world. It is to support organizations or companies in making confident, well informed decisions as they operate within a rapidly evolving and interconnected world. And talking about this interconnected world, I think a topic that keeps us all busy over the last months now almost years is obviously geopolitics. It seems to influence almost every major business decision. And I wonder how has that changed the role of public affairs professionals like yourself? ⁓ to to begin with, I think that's reduced our professional mysteries in front of the publics. In the past it's probably the topic for public affairs professionals for geopolitical ⁓ risks. Now it's almost everyone's everyday's topic. So that's the biggest change. But ⁓ from the p business perspective, I think the biggest change is that geopolitics has moved from the margins of business planning to the center of boardroom discussion. For many, many, many years, public affairs was seen as a specialist function to support market access or regulatory engagement, as we just talked about. But today I think board need to recognize that geopolitical developments directly influence investment, trade, supply chains, technology, capital allocation and even their corporate reputation. That means public affairs more and more contributes to strategic judgment rather than simply external engagement. And in that context, does it also mean that companies should think differently about China? Yes and no, I think the no part would be not in the way people sometimes assume. The goal is not to become more political, don't take me wrong. It is to become more better informed. The strongest organization avoid simplistic narratives. They recognize China is multiple roles. It is simultaneously a market, a source of innovation, a competitor, a partner. And an increasingly influential player in shaping global rules and standards. Leadership therefore requires balancing multiple realities rather than just s searching for simple answers. And Yori hinted a bit on it, and I also felt that myself when visiting China last year. You often speak about long-term thinking. I think this is a very beautiful thing because it's incredibly important to also gain a strategic advantage. Why is that so important for you or also for the way that you do business in China, the long term thinking? I think grew up in China strategy is embedded in my blood and strategy is ultimately about direction rather than headlines. The media of course they are understandably focused on today's development, but boards need to think five or ten years ahead. China the Chinese government thinks years ahead too. Let me give you an example. In twenty twenty one, China not only set the fourteenth five year plan for twenty twenty one to twenty twenty five, but also set forth its long term vision for twenty thirty five. This year, China has rolled out the fifteenth five year plan, covering the period from twenty twenty six to twenty thirty. Today our main focus is to help our clients to thoroughly analyze and interpret the core policy priorities. So they can strategically position themselves as China advances towards its twenty thirty five objectives. One of the most valuable contribution public affairs team can make is helping leadership to distinguish between structural trends and short-term events. That creates confidence at moments when uncertainty is roof high. Success, in my opinion, in business does not come from raising the quickest. It comes from recognizing and interpreting change earliest. I love that. And I know you're probably gonna add that to the bill that you're gonna charge me with, but if you had one message for international boards today, what would it be? ⁓ I think the the one message I would love to give would be do not think about China only when a China issue appears. Think about China whenever you discuss your long term strategy. Whether your company operates here directly or not, China is increasingly shapes the competitive environment in which almost every multinational now operates. Recognizing and understanding China's environment is no longer optional for international boards. It is a fundamental part for responsible leadership. So that's where I'm gonna charge the clients for more detail. That's perfect. You gave them a free trial and They can reach out for more fantastic. Another hot topic these days is obviously artificial intelligence or AI in short. So how is artificial intelligence transforming or reshaping public affairs and also corporate engagement in China? Because you're at the forefront there as well. How do you experience that yourself? Yeah. on one side of course China would like to see artificial intelligence to drive the future competitiveness of the nation, of the industry supply chains and become the new driver of economic growth. On the other side, for us as a professional working in the public affairs sector, I think artificial intelligence is certainly reshaping our profession as many others. But I do not believe it will ever, ever replace the most important elements of public affairs. The reason is I think AI can process information as is at extraordinary speed. It can monitor publicly available policy development, compare regulatory frameworks and help us to analyze vast amounts of data. That makes it an it an extraordinary maybe tool for improving the speed and quality of our strategic analysis. Yet at its core Public affairs has never been simply about information or data or insights. It is about judgment. The real value we bring to the table is interpreting what developments mean for an organization's strategy, reputation, and long term relationships. That requires experience, insights, context, and sophisticated understanding of institutions that know technology, in my opinion, can replicate on its own. Very well said. I I fully agree with your perspective. So where should organizations embrace AI and where should they be or remain cautious? Mm I would say I encourage all organizations to use AI proactively for research, monitoring and scenario analysis. Like what they always say trust but verify, it is essential to apply rigorous human check or review to ensure accuracy and guard against misinformation or disinformation. If I would be more cautious is when organizations begin to also judgment. In practice, leadership decisions are really made based on information alone. They require deep insights, context, values, experience, and an appreciation for relationships built over time. In many perspectives, I do believe AI will increase rather than reduce the importance of trusted advisors. As information becomes abundant, the real resources become more. Interpretation and judgment. Very well said again, and and you're spot on because I feel in the past, whatever we read or found on the internet, we thought this is true because I can see who sent it. And now with all the AI generated content out there, it is abundant as you just explained. And you sort of have to switch your default from saying everything I read is true to everything I read is false unless proven otherwise. So it's really interesting that the world is shifting there and we have to also shift our perspective on the information to a certain degree that we read in in on the internet or in public. I really like your perspective. Thanks. And I I couldn't agree with you more that nowadays is ⁓ in the in the chick pa two ⁓ past two decades, we're probably short of the insights. So government connections are very important to help you get more information, but now it's the opposite. The game has changed. Exactly. So obviously that will also change the profession of public affairs. So if you look ten years ahead from your experience and and your viewpoint, what will dist distinguish a very the very, very best, the top of the top public affairs professionals from the rest? Well, ⁓ I hope I can represent that kind of group of advisors. If there's one thing I could say would be curiosity. The best advisors will remain endlessly curious about how societies, governments, business and institutions evolve. Technical skills will continue to matter, but outstanding practitioners will be those who connect ideas across disciplines and help leaders see patterns. before they become obvious. That being said, I also wish I have the crystal wall to see what's coming next. But our role is not to predict the future. It is to equip organizations to make well informed and better decisions under uncertainty. That is why I believe the future for public affairs is fundamentally about strengthening confidence in decision making. Rather than simply shaping policy or expanding government networks. Talk about the crystal ball. I think you do have it. You're just charging for it instead of giving it away for free, right? Yeah, exactly. It's fall out. Don't tell others. Okay, I will keep that to myself. So Cynthia, to Bob, we also have some rapid fire questions for you. I give you a short question and ideally you have to answer in one sentence. You ready? Sure. What is one word that describes China today? ⁓ dynamic because constant change has become its defining feature. Good one. And what is one misconception that you most wish business leaders would abandon about China or public affairs? Can be whichever you choose. that China can be fully understood simply by reading headlines or from a distance. Insights come from being present on the ground, showing up matters continue to show up. What's the most important quality in a public affairs leader? Curiosity, genuine curiosity about institutions, peoples, and how decisions are made. And what is a skill that will become more important over the next decade? Well, having a crystal wall. Probably judgment. Of course, technology will provide more information than ever before, but leaders still need to interpret what truly matters. And what's the biggest lesson that your career has taught you so far? ⁓ never assume that today's environment is permanent. Stay open minded and keep learning. And what gives you optimism about the future? ⁓ the willingness of people from different countries and cultures to continue talk to one another. Open and constructive dialogue remains one of the most powerful drivers for ⁓ meaningful progress. And as we come to the end of our conversation today, I have two last questions for you. What's the single lesson that your career has taught you about working across cultures and institutions from Yeah, all over the globe basically. Mm, I think that understanding always comes before influence. The most successful organizations I've p I've worked with are not necessarily those with the largest presence or the greatest resources. Of course everyone wants we have endless fundings to spend and build the things we want, but they are the ones that invest time in understanding the environment in which they operate and are prepared. To keep learning as the environment evolves. So to me, that is the real purpose of public affairs. It is not just about establishing connections or interpreting policies. It is about enabling organizations to make better decisions because they understand the world around them more deeply. Beautiful. And my very last question for you today, Cynthia. If listeners remember only one idea from today's conversation, what would you like it to be if you could choose? Just one lesson, one learning for them to take home with it with them. That's a tough one. I would hope that ⁓ they remember that understanding China today goes far beyond simply studying China itself. In our interconnected world, as we said a lot, China's development Policies and actions have significant impact on global economies, regional dynamics, and international institutions. Whether a company manufactured here or competes with Chinese firms, rely on Chinese suppliers, or simply operates in an industry influenced by the Chinese innovation, understanding China has become part of understand the future. There is your Crystal ball. Ultimately, I think all the leadership is about making confident decisions in conditions of uncertainty. So better understanding leads to better judgment and better judgments create more resilient organizations. That will be the one message I want the listeners to remember today. That's a wonderful way to end the episode today. Cynthia, I really appreciate you taking the time to speak with me today. ⁓ sharing your impressive career learnings and also your perspectives on China but also on the world. I really enjoyed the conversation. I wish you all the best and lots of success. And thank you so much for your time and your great insights today. Thank you, Sylvan, and for the opportunity to talk about China and public affairs. Thank you so much, Cynthia. Really appreciate it. You've been listening to The Pulse of Politics, a Delos podcast about navigating uncertainty in public affairs. For more insights, visit Delosanalytica.com.