The Rise Csr In China

The Rise of CSR in China

By Guo Jun, All China Federation of Trade Unions

What is a corporation? This question has long been debated in Western countries and has been shaped by difficult contradictions between capital and labor, profit and justice, and efficiency and balance. In the context of globalization, this debate is not bound within corporate walls or even by country borders, butinstead becomes a global discussion that is the central focus point for multinationals (MNCs), local companies, NGOs, governments and international organizations (e.g. the United Nations) in both developed and developing countries. History of CSR in China The role of corporations in the context of China has changed over time. It is argued that Chinese enterprises in the planned economy era displayedextremely high levels of corporate social responsibility (CSR). This was through direct control from the government, where corporations were not only structured to maximize their own profits, but also to take on a variety of different social obligations. They provided employment opportunities, social welfare, public services, established childcare, schools, public dining halls, hospitals, cinemasand even crematoriums. Due to this crucial role in society, companies were sometimes referred to as “corporations of society.” During this era, enterprises paid more attention to social responsibility than profit. To these corporations, the priority was to protect the rights and benefits of employees and maintain social stability, even though it may not have been completely voluntary. In the earlyyears of China’s reforms, Chinese enterprises changed course rapidly and began to prioritize the pursuit of profits. During this transitional time, the laws and regulations regarding a corporation’s “responsibility” to society were unclear. Labor rights violations occurred frequently and any concern for social welfare practically disappeared. It was under these conditions in 1994 that Chinaintroduced its first national-level labor law, ensuring its suitability for a socialist market economy. The establishment of a socialist market economy has meant that market competition has become more ordered and corporate structure more standardized. Chinese policies currently promote the creation of a wealthy and “harmonious” society with a more people-oriented system of governance and a scientificapproach to development. This has compelled corporations to alter their business models in order to become more socially responsible. An item in China’s Corporate Law has even been revised to incorporate CSR into its fifth article. The CSR Disguise
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Currently, the objective of companies adopting CSR is largely based on the need to improve corporate competitiveness. In response toincreasingly damaging criticism from competitors and consumers on issues such as sweatshop labor and lead-contaminated toys, MNCs have been forced to require that supply chain manufacturers, including those in China, improve their codes of conduct. This led to many U.S. companies conducting internal factory audits and making CSR a global movement. Before then, the idea of CSR was novel in China whenstate-owned enterprises began to privatize. At that time, enterprises essentially used their equipment and facilities as their competitive edge. Today, with the influx of audits that Chinese suppliers are receiving from their U.S. buyers, they are attempting to use better management and CSR practices to increase their global competitiveness. However, there are four major misconceptions regarding CSR inChina: 1. Companies adopt CSR practices willingly and voluntarily. Generally, few capitalists embrace CSR voluntarily because doing so entails short-term costs. While CSR may bring long-term benefits, many companies lack the patience to stick it out. Large MNCs have the resources to support and implement the idea of sustainable development — this is why they tend to promote the CSR movement....