Csr and Social Harmony in Prc

China Begins to Take Corporate Social Responsibility Seriously: CSR and Social Harmony in the PRC©1 Edward F. Ahnert2 Abstract: This essay describes the evolution of Corporate Social Responsibility in the Peoples Republic of China. It links that evolution to the major shifts in Chinese economic policy and in particular to the call for a harmonious society since 2002. It describes how since 2008 the government of China has become the major promoter of CSR not only to achieve a harmonious society but also to advance its global economic interest as Chinese companies seek to penetrate world markets and to buy up strategic resources such as petroleum reserves, iron ore and farm land. It argues that for the promotion of socially responsible business practices to be successful in China in the long run, CSR must move from a reactive, compliance-oriented activity driven by edicts from the central government to a key component of businesses’ strategies based on a continuing dialogue with stakeholders. It cautions against attention to corporate philanthropy and recommends close focus on eliminating externalities of core business practices. It points out CSR issues facing businesses frequently are the result of unmet needs or consumer preferences. Chinese businesses can gain advantage by spotting and supplying these before their competitors thereby creating competitive advantage through socially responsible practices. Political scientists and philosophers sometimes frame their analysis of politics as a contest between liberty and order. The United States and China could be seen as two extremes with the U.S. tilting toward liberty and China toward order. The early history of the U.S. is a story about a struggle for liberty from the rule of a distant power. The foundational myth of the American republic emphasizes the triumph of the individual rights of the people and the restriction of the powers of the central government. On the other hand, the story of the origin of China is

Links: Repository/424962 and related download from CSR-Asia 42 See http://www.chinadaily.com.cn/bizchina/2008-04/14/content_6614860.htm which also contains more details about the guidelines. 43 See http://www.dlapiper.com/foreign_enterprises_csr_compliance/ 44 See http://internationalrivers.org/en/node/3831 and DLAPiper Client Alert http://www.swisscham.org/bei/pdf/CSR_Guidelines_for_Financial_Institutions_in_China_February_2009.pdf 45 “Green Agency to Score and Rank Listed Companies”; South China Morning Post: February 26, 2008 46 “China Retools Its Government in Efficiency Push’; New York Times; March 12, 2008 47 “Shenzhen to Create CSR Standards”; Shenzhen Government Online; November 11, 2006; http://english.sz.gov.cn/pn/200611/t20061120_160780.htm 48 See Quanguo Wu, Director, Economic Committee of Shanghai Pudong New District, “Raising District Responsible Competitiveness: The Pudong New District’s New Development Model” in The State of Responsible Competitiveness 2007; http://www.accountability21.net/uploadedFiles/publications/National%20Responsible%20Competitiveness%202007 %20(1).pdf 49 As reported by Mr. Peng Huagang, Deputy of Research Department of SASAC, in an interview for the China Securities Newspaper; http://www.syntao.com/E_Page_Show.asp?Page_ID=11422 50 Wang Jiming, executive president of the China Business Council for Sustainable Development, http://english.mofcom.gov.cn/aarticle/newsrelease/commonnews/200904/20090406175076.html 51 Liu Zhong, Deputy Director of China’s Security Index Co., Ltd, http://www.syntao.com/E_Page_Show.asp?Page_ID=11403 52 A bilingual executive summary of the report: http://www.accountability21.net/uploadedFiles/publications/Advancing%20Sustainable%20Competitiveness%20of %20China%20Transnational%20Corporations%20_Chinese_English%20Summary.pdf A full English version: http://www.accountability21.net/uploadedFiles/publications/AccountAbility%20%20ADVANCING%20SUSTAINABLE%20COMPETITIVENESS%20OF%20CHINA%20TRANSNATIONAL% 20CORPORATIONS%20-%2019%20April%202009.pdf A full Mandarin version: http://www.accountability21.net/uploadedFiles/publications/Advancing%20Sustainable%20Competitiveness%20of %20China%20Transnational%20Corporations_Full%20Chinese%20Version.pdf 53 “Green rules eye Chinese firms abroad”, China Daily, May 29, 2009, http://www.chinadaily.com.cn/bizchina/2009-05/29/content_7952605.htm 54 Ian Davis, worldwide managing director of McKinsey & Company, “The Biggest Contract”; The Economist; May 26, 2005 55 The concept originates with David Grayson and Adrian Hodges, Corporate Social Opportunity; Greenleaf; 2004. 56 C. K. Prahalad; The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits; Wharton School Publishing; 2005. Prahalad is the Harvey C. Fruehauf Professor of Corporate Strategy and International Business at The University of Michigan Business School. 18