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Sustainable Development and Corporate Social Responsibility in China
Toby Lincoln
12/5/2004

Jiang Zemin's retirement may be just the opportunity some in China had hoped for. Not only democracy advocates, but also economic reformers within the Hu Jintao faction pushing for sustainable development policies, may have reason for optimism. Earlier this year, Beijing announced a new green measurement of GDP to take into account the wider social and environmental costs of China's economic growth. As Niu Wenyuan, director of the Chinese Academy of Social Sciences, notes: "The traditional GDP index could not fully reflect the relationship between economic growth and the environment, the environment and people." [1] China seems more prepared than ever before to work with stakeholders from both the corporate and NGO communities to address development problems. The breadth and scope of these partnerships offer corporate social responsibility (CSR) opportunities for those willing to work with Beijing in its pursuit of sustainable development. Jiang's retirement, combined with certain aspects of Chinese political culture, provide hope that such policy trends may continue. If they do, China may be at the forefront of a new way of modernization, one that could become a model for the rest of the developing world.

Beijing has fostered sustainable development policies since the mid-1980s. In 1986, China launched the largest poverty alleviation program in the world. While there were undeniable problems in implementation, rural income per capita rose by 2.28% per annum between 1985 and 1992. More recently, there have been attempts at addressing the issue of migration away from areas considered unfit for human habitation, with a program that aims to move 10 million people by 2010. But the sustainable development trend in Chinese policy is evident not just in programs that deal with those at the margins of society. Though the Three Gorges Dam has rightly been criticised for its impact on the environment, Beijing has shown a commitment to renewable energy. The leadership followed a promise in May 2004 to produce 12% of electricity from hydroelectric power with an industry report on the viability of wind power. The resultant collaboration with Greenpeace and the European Wind Association provides ample illustration of China's willingness to work with NGOs and other stakeholders in achieving its renewable energy goals. [2] Similarly, a recent partnership between Daimler Chrysler and the Ministry of Science and Technology to put 100 fuel cell buses on the streets of Beijing by the end of 2004 is evidence of the CSR opportunities available to those businesses interested in cooperating with the government. [3]

In China, however, the support of both central and local government is vital to getting such projects off the ground. The activities of Global Village of Beijing provide a good example of this: Throughout 2003, this Chinese NGO was involved in a wide variety of projects. Working with the Beijing Municipal Government and Exxon Mobile, the charity undertook to heighten awareness of recycling in the hope of contributing to the Government's objective of having 50% of rubbish sorted in the capital by 2008. Its work in Xuanwu district involved 15,000 households and the distribution of 1.35 million recyclable bags. [4] Such grassroots activities not only raise awareness of sustainability issues, but also forge ties between NGOs, multinational corporations (MNCs), and government.

Direct links between foreign businesses and various sections of the Chinese government have also been helpful in promoting sustainability issues. Witness the China-EU Sustainable Business CEO forum held in May 2004. During the conference, executives from Siemens, British Petroleum, Bayer and other MNCs working in China were able to meet with politicians from the Ministries of Commerce, Science and Technology. [5] Such meetings promote communication between stakeholders, and can produce real results on the ground. Take, for example BP's work on environmental issues. Part of the US$6 million the company spent in China went to the Environmental Educators Initiative. Launched in 1997, the Initiative's aim was to educate some 200 million Chinese children on environmental issues. Beijing's acceptance of the need to educating people about the environment allowed the State Education Commission to play "a crucial role in ensuring the project's success." [6] As a result of the Initiative, BP was given the chance to be involved in the China Environmental Forum in 1997, the country's first ever high-level environmental event. CSR programs have taken off with MNCs in other industries as well. In the textiles sector, Gap has worked directly with clothing manufacturers to implement a code of conduct to improve working conditions, which even includes systems for dealing with worker grievances. By the end of 2003, some 90 manufacturers were participating in the initiative. [7]

The governmental support given MNCs demonstrates that Chinese policy makers are serious about engaging with partners on developmental issues. This tendency has even led to collaboration with foreign governments. Despite the fact that Beijing has a strategy for dealing with China's increasing HIV infection rate, it must contend with opposition from local officials prejudiced against the disease, as well as prostitution, rising drug use and (in some areas) inadequate healthcare. In response, the China-UK HIV/AIDS Prevention and Care Project was commenced in 2000. Designed to focus on the high-risk areas of Yunan and Sichuan, the program aimed to establish "best practice" and incorporate this into national policy. A formidable barrier to the effective implementation of HIV strategies in many countries has been social prejudices, which in China extend into the police and health bureaucracies. To deal with this, the China-UK project worked with the Ministries of Public Security and Justice to produce a manual for officials that concentrated on harm reduction in the Intravenous Drug User community. [8] Projects among actual high-risk groups included a pilot in Sichuan that distributed 30,000 syringes and educated 200 drug users. [9] Following the creation of the China-UK project, the Global Business Coalition on HIV/AIDS established the China Business and AIDS Working Group, which held its first meeting in August 2004. Bayer Coporation's General Manager for Corporate Communications Bill Valentino chaired the meeting, clearly indicating the seriousness with which Beijing is attempting a broadbased solution to its AIDS problem. [10]

The problems besetting Chinese economic development are also being met with more sustainable policies, albeit gradually. While the spate of announcements from Beijing supporting sustainable development may simply be an attempt to discredit Jiang Zemin's economic policies, this explanation does not take into account the increasingly onerous environmental and social difficulties plaguing China. Nor does it account for the emphasis which has historically been placed on internal stability in Chinese politics. The historical development of Chinese political culture is unique from that of Europe in many areas, a fact which may lead to a different type of economic development. China's preoccupation with stability contrasts sharply with the European experience, where competition is the overriding factor. But, it still may be going too far to suggest that Chinese policy makers are definitively less likely than their European counterparts to advocate economic expansion above all else. Indeed, it is easy to find numerous examples of economic expansion in China that have severely harmed the environment, and been less than socially responsible. However, it is hard to deny the increasing emphasis being placed on sustainable development by Beijing and hopefully Jiang's retirement does not reveal support for such projects as merely part of an internal power struggle. The noises made by China in this area should continue to be encouraged by the international community, as engagement with Beijing to alleviate its social and environmental problems would allow MNCs and others to actively pursue CSR policies on both the local and national levels. Such partnerships would not only benefit the environment, they could also foster openness within China, and help to promote a model of development that puts people and the planet before profit and shareholders.

Toby Lincoln is a researcher in corporate social responsibility and reputations management. He received a Masters in Chinese Studies from the School of Oriental and African Studies in London.


Notes:
1. http://www.wbcsd.ch/Plugins/DocSearch/details.asp?strDocTypeIdList=240&DocType=240&StrCharValList=&DateStart=01.01.1753&DateEnd=31.12.9999&MenuId=ODQ&DocId=6009&URLBack=%2Ftemplates%2FTemplateWBCSD4%2Flayout%2Easp%3Ftype%3Dp%26MenuId%3DODQ%26doOpen%3D1%26ClickMenu%3DRightMenu
2. http://www.commondreams.org/news2004/0915-02.htm
3. http://www.csrwire.com/article.cgi/2782.html
4. http://www.gvbchina.org/English/english.htm (see 2003 annual report)
5. http://www.chinadaily.com.cn/english/doc/2004-05/11/content_329701.htm
6. http://www.bp.com/genericarticle.do?categoryId=2011134&contentId=20008487. Corporate Social Responsibility in China: Mapping the Environment p. 65 7.http://www.theglobalalliance.org/documents/ChinaReport-web.pdf
8. http://www.futuresgroup.com/Documents/ChUK_Midterm_Report.pdf
9. ibid
10. http://www.businessfightsaids.org/news_read.asp?sct=2&ID=9333&PR=1

This article appears on AFAR with permission from China Brief, Jamestown Foundation.

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