Corporate Social Investment Responsibility in the People 's Republic of China Research Paper

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Abstract

China has a unique background in terms of culture, accompanied with a fast-economic growth trajectory. The country has received a lot of attention on the international front in as far as their adoption of corporate social responsibility is concerned. The implementation of the same will greatly influence global sustainability. Thus, this paper seeks to explore ways in which CSR has paved way for growth economically in China from the onset of economic transition, its political, cultural, and historical background, and how such dynamics have affected or been affected by the performance of business firms. Therefore, the pressure on China to adopt CSR in the recent past came close on the hills of a period when the country arguably practiced one of the strongest CSR globally. The transition is viewed against a background of the state owned-enterprise of the Chinese, also referred to as SOE, and a host of private organizations in the same industrial segment in the city of Zhengzhou in the province of Henan in a period of 8 years. While the SOE CSR has been on the decline alongside the structure of ownership, its economic performance did not show any signs of improvement. In contrast, while experiencing a steady improvement in their performance, economically, the private firms in the lower cadre are not showing interest in CSR (Zhanget al, 2014).

Introduction

The nature of CSR compliance is such that it compels organizations to go beyond the statutory requirements and look beyond maximizing profits. It means that such firms should spend their resources at a rate and level beyond what the law requires them to do. CSR demands that companies also take the interest of the stakeholders into consideration, and not just the shareholders’. The stakeholders are the communities that live and operate around where the company is located and sells its products. Such groups as the suppliers, employees and the consumers form part of the stakeholder group (Lin, 2010).

CSR focuses on, apart from goods provided, the employees, the services provided; the quality of life for all affected by the operations of the company. China is well known for its notorious sweatshops and environmental indifference. There has been a series of claims regarding the common occurrence of substandard goods from the Chinese producers. The scandals signal to the fact that many Chinese companies are on a senseless trajectory to make money at all cost, including human life. The products made in China are generally associated with both lower pricing and poor quality. It is interesting to note that, it is probably the declining public image of the Chinese production industry that is propelling the country to, now, vigorously pursue the CSR strategies. Issues surrounding the CSR subject are a common subject of discussion in China across a range of forums (Whelan& Muthuri, 2017).

The government of China plays a significant role in steering the CSR agenda. Article number 5 of 2006 Chinese Company Law is a typical example of the efforts by the authorities. The law requires that every company undertakes CSR. The launching of the principles of CSR for the companies controlled by the central government in China is yet another good example of efforts to promote CSR. Several initiatives to push the CSR agenda are emerging including CSC900T, of the Supply Chain Association and the joint declaration by the Chinese Industrial Association of the Principles of Industry in CSR (Baniket al, 2016).

It is worth pointing out that the advocates of CSR will be happy to witness CSR growing in China. However, the same advocates may cast aspersion on the true objectives of the CSR campaign by the Chinese firms and authorities. They wonder whether the Chinese CSR initiatives are only meant to hoodwink the public and work as a cover-up for the purposes of washing their tarnished image. The apprehension arises from the allegations the Chinese authorities commonly uses such companies as their tools for abusing human rights. The practice by the Chinese authorities, requiring search engine firms to censor individuals and groups based on the instructions that they issue is a good example (Baniket al, 2016)

In furtherance of the government’s quest to control its population in a wide spectrum of respects, China deploys companies owned by the state in conflict zones to protect its own interests. One of the Chinese firms under heavy condemnation on the international front is the Chinese owned National Petroleum Corporation. Human rights organizations have blamed the petroleum firms for human rights abuses, particularly, for direct involvement in the genocide in Darfur region.

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Such developments fly in the face of the goals of CSR. They are the ones that make critics raise concerns about the seriousness of China in pursuing CSR. This article examines the matter from various perspectives, including ideological, instrumental and institutional angles (Whelan& Muthuri, 2017).

Ideologically, it can be argued that the practices of charity by the traditional Chinese enterprises, the function of the state-owned firms; socio-economically based on traditional communism, including the socialist percept gives a basis for CSR as practised in China. Nevertheless, it should not be lost on the reader that economic, political and legal institutions are still a stumbling block to the realization of CSR as the world understands it. It is the view of this article, in as far as the efforts by the Chinese government go in promoting CSR that it is fair to conclude that the authorities may be truly sincere, excluding issues to do with human rights (Whelan& Muthuri, 2017).

China has demonstrated consistency in its economic and political interests for the promotion of the environmental issues and labour. The exclusion of human rights, implicitly, by the Chinese authorities from the formal CSR practices point to a CSR approach with uniquely tailored Chinese traits. Regarding private actions, the actors in the private sector are getting used to the standards of CSR from a world view. However, the carrying out of the standard practices is left to the technological capacity of Chinese organizations and their bargaining power with regard to their customers at the international level. The CSR development in China is a good case study and offers important inferences for CSR discourse at the global level. CSR is part of the scheme of governance, worldwide. Apart from the creation for a large space for business, globalization also presents a scenario where regulators have to deal with firms that are out of reach. The innovative governance approaches at international level have developed ways of curbing the shortcoming of the traditional national regulators. The order of regulation, is still, nonetheless constricted by the institutions at national level. Any efforts to develop global regulation systems must consider the practicability of such practices at the local level (Bergman et al, 2015).

The growth of CSR in China is an ideal scenario for checking the influence of global governance locally. The CSR movement as we know it in the present day is propelled by the civil activists in the developed world. The movement affects developing countries because of the globalization trends. The effect can interlace with the environments in the developing nations and generate both desired and undesirable outcomes. Furthermore, the case study on the Chinese implies that various countries come with different CSR approaches. The implication of CSR is given to both institutional and cultural settings. It shows the significance of comparative studies for CSR (Bergman et al, 2015).

Background of CSR for Investment in China

The process of rural reform came with came with the policy of opening up. The development has led to an increase in exports from USD 18.1 billion in 1978 to in excess of 1.19 billion in the year 2009. Since the 70s, China has seen exponential economic growth which has stood at over 9% for the past 20 years. The economic growth was powered by the denationalization of the economic entities and privatization. It was also occasioned by domestic entrepreneurs and local investors (China Daily, 2009).

CSR was witnessed in China for the first time in the 90s. It was occasioned by factors from the external world. CSR was advocated for the first time by western organisations which brought in western CSR norms. It came at a time when the anti-sweatshop campaign was at its peak. Since the Chinese suppliers were at the centre of focus, and yet they were the main global suppliers of a wide of products and services, were made to accept the norms of CSR as it was and is from the western perspectives. Nevertheless, it was observed that there was resistance to CSR because it was widely tailored along the western views and that it was confusing in the context of the Chinese realities. Other CSR forces pushed the CSR agenda in china, even though it may not have been readily received and accepted. The acceptance was widely passive. For instance, a number of multinationals have written codes of conduct which are tailored, particularly for Chinese business….....

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