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Crisis management
By Liu Jie (China Business Weekly)
Updated: 2005-06-20 09:10

Public relations (PR) specialists sometimes have to play with fire.

In April, a report indicated Colgate toothpaste was suspected of containing tricloson, a substance believed to cause cancer. Colgate suddenly found itself busy dealing with the problem. Employees of multinational PR firm Burson-Marsteller were also busy.

Liu Xu, an employee with Burson-Marsteller tells China Business Weekly he only slept three to four hours everyday during mid-April, as he was busy coping with Colgate's crisis. He had to arrange a media conference, prepare materials to prove the products were not harmful and communicate with related government departments and research institutes.

Similar cases have involved Lipton, of Unilever; SKII, of P&G; and Nestle. Their contracted PR companies, such as Profuture, Hill & Knowlton and Ketchum Newscan, have played major roles in combating the crises.

What PR covers

"Those are typical PR crises," says Zheng Yannong, secretary-general and executive vice-president of the China International Public Relations Association (CIPRA). "Actually, PR, to promote sound communication via sending right messages, has penetrated into various fields."

Zheng tells China Business Weekly that producers, service providers and social organizations require PR firms to get their messages out. In a broader context, every unit in society has a need for PR, because every unit has its patrons and seeks the right communication.

Nowadays, even government departments need some form of PR to reach the public, especially when they want to boost an important issue.

"PR companies' business in the Chinese mainland currently covers media communications, event arrangement, marketing promotions, media investigations and surveys, co-ordinating government relations and crisis management," says Zheng.

Fast development

Still at the burgeoning stage, Zheng predicts the annual growth rate of China's PR industry will be about 35 per cent over the coming years.

"And the new growth engine will be domestic companies, the culture and sports sectors, finance and insurance industries and governments, non-government organizations (NGOs) and non-profit institutions," Zheng says.

Statistics from Zheng's association indicate the combined turnover of PR enterprises on the Chinese mainland reached 4.5 billion yuan (US$542 million) last year, up 36 per cent year-on-year.

There are more than 2,000 PR companies in the mainland.

Firms in four developed cities Beijing, Shanghai, Guangzhou and Chengdu dominate 70 per cent of the nation's PR market.

Their clients are mainly manufacturers of autos, household electrical appliances, computers, software and related products, telecommunications, fast-consuming commodities and health-care products.

"China's PR sector, strictly speaking, is only 20 years old, but we are seeing steady progress," says Zheng.

Following the first foreign-funded PR company US-based Hill & Knowlton to launch a branch in China in 1984, China's PR industry has gathered pace.

Sound development?

A delegation of the Public Relations Society of America (PRSA) flew to China to meet with CIPRA, its Chinese counterpart, last March.

Del Galloway, a PR professional and a past president of PRSA, says: "There have been incredible strides in PR made in China in the past 20 years.

"We are here because we are interested in how we can advance the profession in the mainland, and find areas of mutual interest."

The delegation appreciates the speed at which China's PR industry has grown over the past two decades. At the same time, the delegates offer suggestions, in terms of legislation, self-discipline and talent training, to CIPRA.

China does not have a specific law or regulation governing its PR sector, which can result in unfair competition or chaos in the market, says Zheng.

"To reinforce self-discipline, we issued the service guidance of the PR industry last July, which covers working procedures, company management, strategy and marketing, human resources and occupational morality for the PR industry," Zheng adds.

At the urging of the association, some universities in China have launched PR courses. The association also conducts training courses and professional lectures.

"But that is not enough," says Zheng, who adds in the United States, specific PR departments are set up to offer the basic education.

PR is something people generally learn later in their careers. People studying PR are usually executives who already have 10 years of experience in their fields, whereas "in the US, we teach PR to undergraduates from the very beginning," says Galloway.

Zheng says CIPRA plans to co-operate with PRSA to set up a team to promote the establishment of PR departments in some universities.

CIPRA and PRSA will advise, and members of the two associations can act as sponsors.

"By working with educators and institutions in the mainland, we hope to identify specific areas of study that will be relevant to PR understanding and practice," Galloway says.

The mix

"Introducing the world's leading PR concepts and technologies to China, the foreigners have made a great contribution to China's PR development," Zheng acknowledges.

Chinese PR firms have been experiencing robust progress.

"Multinational firms are giving local professionals experience, some of whom later go out and open their own agencies," says Zheng.

"This is where a lot of the future is, as there is a real need for locals who understand the culture, understand the media, but can think globally."

So far, domestic players are inferior to their foreign counterparts, in terms of business scale, the number of branches and long-term clients.

"Consolidation is urged to help domestic PR firms strengthen their comprehensive competitiveness, while we will play an active role in promoting optimization of resources," Zheng says.

CIPRA has yet to consolidate domestic PR resources to provide PR services for bidders for the Beijing 2008 Olympic Games and the Shanghai 2010 World Exposition.

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