ALB: 3M China has been in operation for 33 years, since 1984. China’s legal and business landscape has changed drastically over the past three decades. Could you talk about the legal changes relevant to 3M China and how the company has adapted to them? 

Wang: 3M is the first multinational company that set up a wholly foreign-owned enterprise in China outside the special economic zones. Today we operate over ten plants, one R&D center, four technical centers and a number of other legal entities in China to develop high quality products serving customers and Chinese households. 

We have always firmly held the principle of complying with laws, regulations and business ethical standards. It’s 3M’s unwavering commitment to growing our business the right way. The China legal department at its beginning was attached to the finance department, and the legal counsel reported to the CFO. Over time along with the business expansion, the legal department’s importance and value emerged, which led to the legal department being an independent function.

Within the legal department, we have general business counsels, intellectual property (IP) counsels, compliance counsels, government affairs professionals as well as our dependable supporting staff. Our legal professionals endeavor to perform dual roles as business partners to our internal clients and the company’s guardians to achieve business growth. 

ALB: What are some legal obstacles that 3M China currently has to pay particular attention to? 

Wang: I won’t use the term “legal obstacles.” Rather, as legal professionals, part of our responsibilities is to monitor the evolving legislative and enforcement trend to help navigate business through changes and risks. 

We have recently been paying particular attention to anti-trust, privacy and cybersecurity, advertising and environmental protection related areas. Our legal department writes legal briefing notes from time to time to alert our internal clients on new laws, regulations and cases impactful to our business, in addition to advising on what we need to act on to stay compliant. 

Throughout the year we organize a number of face-to-face training courses tailored to our employees at various job levels and focused responsibilities. At training we combine our company’s code of conduct policy and legal requirements as training subjects. We are inclined to do case studies by referencing real enforcement cases for high training impact to make training appealing. It is proven that case studies almost always have better effect than simply going through the rules. 

ALB: 3M is a science-based company that produces many innovative products. The Chinese government has been supportive of tech and science industries. What are some new policies that the government has rolled out which are favorable for 3M? 

Wang: 3M has diversified and advanced technologies, which support the development of good solutions and products for a great number of customers and household consumers. We appreciate that the government offers tax incentives and rebate towards high-tech companies for significant R&D investment – for example, China’s High and New Technology Enterprise Program. 

We are also grateful for the government’s tightened standards towards environmental protection and pollutant emission. IP protection, particularly anti-counterfeiting, has seen major improvement through government enforcement efforts. We appreciate the hard work by customs, the police, prosecutors, courts and market authorities in cracking down counterfeiting activities. 

It would be an omission if I don’t mention the positive effect of the growth of China’s technological giants such as Huawei in electronics and telecommunication, and Great Wall Motor in the SUV auto industry. 3M China benefits from their rapid growth. Our advanced technologies provide good solutions to such great customers, enabling their success. 

ALB: At the same time, China’s regulations are becoming stricter as the legal sector matures. How does this affect business for 3M? Is it harder or easier to remain competitive? 

Wang: We welcome a more mature legal environment to allow companies to have clearer rules to follow and to enforce legal rights. We are happy to have a level playing field for fair competition. 

New rules and regulations require legal professionals to be sensitive towards the evolvement, and it would be even better if the legal department can contribute comments to new laws and regulations at their drafting and consultation phase. 

Compliance with stringent new requirements often will require resource commitment. For example, Shanghai has recently issued new standards on emission of certain chemicals. 3M China’s management communicated the new standards with the headquarters promptly. With the headquarters’ budgetary and manpower support, we were able to upgrade our plants’ system effectively to align with the government’s mission on environmental protection. 

3M regards compliance and ethics as our competitive advantage. We would like 3M to be a trusted brand to our customers and stakeholders.

ALB: Legal matters can be very complex for multinational companies like 3M. Could you talk about how 3M handles legal issues, particularly multi-jurisdictional/cross-border issues?

Wang: There are 25 legal professionals and staff in total working at 3M China, taking care of business legal work, IP and compliance work. We encourage legal professionals to have strong business acumen while developing certain areas of legal expertise. 

For instance, we established the “subject matter expert” (SME) concept – our general business counsels may choose a particular legal area based on their interests to develop their expertise in employment law, privacy, anti-trust, trade compliance, etc., in addition to their general role of supporting business. 

At 3M, we also have full-time dedicated SME counsels in the headquarters. The China SMEs receive guidance and support in terms of training materials, template documents and particular advice. In the event of handling complex transactions such as acquisition or divesture, we always partner headquarter counsels with local counsels. 

Inputs are always valued to help form sophisticated and feasible actions. This is also a good process of growing our local counsels’ competency by virtue of more exposure to complexity and learning from peers. 

We do go out for professional assistance from good outside lawyers. Over time we have developed a good shortlist of law firms and particular lawyers we trust. We accumulate the outside legal advice work products and our internal legal work products to build up our legal database.