Friday, March 29, 2013

Corporate Social Responsibility With Chinese Characteristics Part 3: Wang Maoling on CSR and the Communist Party Line in China--构建和谐社会必须强化企业的社会责任

I have been considering issues of corporate social responsibility in China. See Corporate Social Responsibility with Chinese Characteristics, Law at the End of the Day, Nov. 9, 2011; Corporate Social Responsibility With Chinese Characteristics--Part II, Law at the End of the Day, July 9, 2012. One of the unique structural conditions that may shape the development of CSR with Chinese characteristics relates to the role of the Chinese Communist Party (CCP) in framing the substantive premises within which CSR can be expressed.  Though CCP policy is usually understood as focused on issues of politics and public law, its reach can be much broader.  Its role in shaping CSR for state owned enterprises may be assumed; but it appears to be broader in scope.

(Todd Balazovic, China Steps Up Corporate Social Responsibility Efforts, China Daily, Oct. 15, 2012; "Corporate social responsibility has long been a buzzword in the boardrooms of the West, but it is relatively obscure in China. But as China becomes more important to multinational companies in generating revenue, they are stepping up their corporate social responsibility efforts in the country. . . .  Though it broadly falls into three main categories - community outreach, environmental health and safety and environmental protection - the bulk of CSR work consists of designing a more sustainable company culture or having employees engage in volunteer work, making the exact value of CSR difficult to gauge.")

A recent article published by Wang Maoling, 构建和谐社会必须强化企业的社会责任 "Goujian Hexie Shehui bixu qianghua Qiye de Shehuizeren" ("Constructing Harmony Society must strengthen the ideal of Corporate Social Responsibility"), Qiushi 23 (2005) suggests the contours within which the relationship between CCP and CSR can be understood.  Most interesting is the way in which the substantive values of CCP normative projects, and particularly that of "harmonious society" are transposed into the Western CSR project.  That transposition is particularly notable in the context of accommodating CSR objectives within the framework of corporate welfare maximization.

Shan Gao, an SJD candidate at Penn State's Law School has translated the article with a brief commentary.  It follows below:

Translation of Wang Maolin’s article
Constructing Harmony Society must strengthen the ideal of Corporate Social Responsibility
Wang Maoling. 2005. "Goujian Hexie Shehui bixu qianghua Qiye de Shehuizeren." 
Qiushi 23. 王茂林 
By Shan Gao 3/25/ 2013

It is well known that Chinese companies had subjected to CSR criticisms for many years. Chinese leader aware the severity of these issues and tried to solve it in “Chinese way with Chinese characteristic.” However, this was quite tricky for CCP leader to raise social awareness of CSR concept because this concept actually originated from west, which CCP leader traditionally try to shield society from any influence of the West.

This article is interesting because it shows us how the CCP looks to introduce a “West ideal” like CSR and incorporate to incorporate it within CCP ideology, and principally the Party Line: “Constructing Socialist Harmony Society.” Moreover, the high profile of the author, Wang Maoling,  also indicates the level of scrutiny and interest by the CCP in the incorporation of “Western ideals” transposed into the Chinese political and economic system.

Wang Maolin is a high level party official who served both Party and State positions. These include[1]: Secretary[2] of Shan’xi provincial Party Committee (1991-1993); Secretary of Hu’nan provincial Party Committee (1993-1998); Deputy leader of Central Leading Group for Propaganda and Ideological Work[3] (2001-2002); Deputy Director of Law Committee of NPC (2001-2008); Member of the standing committee of National People's Congress; President of the Chinese Association of Productivity Science (2005-present). Qiushi Journal is the organ of the Central Committee of the Communist Party of China. Its English edition made its debut on October 1, 2009 and has been distributed both at home and abroad.

Wang maoling. 2005. "Goujian Hexie Shehui bixu qianghua Qiye de Shehuizeren." 
Qiushi 23. 王茂林

The ideal of "Constructing Socialist Harmony Society" was a critical strategy decision that proposed by President Hujing Tao on behalf of Central Committee of CPC. In order to apply and practice this strategy decision, we shall give fully attention now and let the enterprises play the role of practicing Harmonious Society in their production. Particularly, strengthen enterprises Corporate Responsibility and clarify the connection between the goal of Constructing Harmony Society and the goal of Corporate Social Responsibility.

"Harmony" is an ancient wisdom that represents Chinese culture. "Harmony Society" is a concept that incorporates a wide portion of social system theory. Constructing a "Harmony Society" not only involved theories of productivity and relations of production, but also involved theories of “Economic foundation and superstructure.[4]” In other words this is a two level task, we shall not only solve the issues on the level productivity but also on the level of economic foundation and superstructure. Under Social Structure Theory, the task of constructing a “Harmony Society” required major social organizations to take their responsibility, which includes responsibilities of CPC, State agencies, enterprises, semi-government agencies, civil groups (NGO), community groups. Among above examples, corporate’ responsibility is the most critical part in the whole social organization system.

“Corporate Responsibility, ” originated from the western market economy, which suggested that a corporation should not only pursuing maximize shareholder’s profits, but should also concerns the interest of stakeholder (Interests that influence and interests that subject to the influence of corporate behaviors) Employee’s interest is the primary concern of the CSR theory. The proposal of CSR ideal was under the background of 20th of last century, when various social conflicts arose after the expansion of the capital. The issues of gap of wealth, labors and poverty caused people’s study and concerns of CSR. Today’s raising attention of CSR issues are largely related to the internationalism. Within the development of the economy, most countries and even companies’ operation activities are no long independent from the globe economy system. There is a trend of demanding corporation take their social responsibility in the western world. CSR concepts has been frequently cited in various international meeting; major commercial journals, such as Forbes and Fortune, ranked companies under the standard of CSR; United Nations took various actions in raising social awareness of the CSR. Currently the widely accepted CSR concept by international society is “a Corporation should not only responsible for producing profits and shareholders’ interests but also responsible for employee, environment and society. Particularly, this is suggesting the ideal of morality, production safety, employer health and labor rights.”

The rise and development of CSR campaign had deeply rooted in the background of globalization with international politics and the activity of international organization like consumer rights organization, labor union, region organization, and human rights organization. From a positive prospect, encouraging CSR could improve the working condition and benefits of the employees as well as the environment protection and social welfare. These prospective are supported and fit in China’s long term objective of sustainable development. However, we should also be alarmed by certain organizations that take advantage of CSR campaign with unkind political objective of pressuring China with western democracy and human rights. [5]

China’s CSR campaign should take the strategy of “guide by government, take cautious steps in accordance with China’s reality.” Furthermore, we should incorporate the CSR ideal into the construction of “Harmony Society.” Under China’s reality and CPC’s political priority, we could summarize the concepts of CSR as follows:

Corporation is the cell of the society, which plays a unique role in “Harmony Society.” Corporation’s CSR is grounded on two aspects: first, within the scope of corporate internal system, which means corporation has duty to produce profits for shareholders, improve working conditions and working benefits for employees. Second, externally, corporation has duty to maintain its positive social image by providing goods or services, paying tax, defending consumer’s rights, adjusting production in accordance with the requirements of Scientific Outlook on Development, actively engaging in social welfare needs during the natural disaster and other occasions. Regardless the nature of ownership, these two aspects requirements is same for both private and state-owned companies.

We shall have a clear understanding the connection of corporation’s economy responsibility and social responsibility. As a business entity, the nature of profits requires a corporation should first produce profits to satisfy its economy responsibility. Then the corporation should fulfill its social responsibility with its profits. In other words, social responsibility needs to be realized through the economy responsibility. This is reasonable because society is a corporation’s sources of profits and market. A corporation should be responsible to the consequences it brings to the society. Without the society, there will be no market and profits for a corporation.

Moreover, if we only consider the issue of productivity, a corporate could satisfy its CSR by merely produce enough economy profits. However, judged from the prospective of “productive forces and production relation,” economy responsibility is not equal to the ideal of CSR that “Harmony Society” required. We need to guide the corporate overcame the conflicts between maximize economy profits and defending the interest of society. We need to promote the ideal that corporation is part of the society and thus should relate the wellbeing of the society to themselves.

For the past 26 years since the Open Up, Chinese corporation had gained tremendous achievements in fulfilling economy responsibility. However, some company sacrifices the interest of public and society for personal gain, which created severe consequences to the society. We spotted this issue and we need to solve it. Otherwise, there will be no harmony in the society.

We shall apply stronger policy in guiding corporation become the role model of harmony society. Legislature shall take measures to regulate the corporations. Government shall take measures to encourage corporations. The corporation shall take a right stand in dealing with the consumer and competitor. The entrepreneur shall have more self discipline that prevents immoral behavior that violate CSR.

We should raise the social awareness of the CSR. Within China’s membership in WTO, there will be higher expectation of CSR requirements on Chinese companies. Particularly, Chinese companies should try to improve the lobar rights, working conditions and working benefits.

Last, China shall create an accurate measure system that measure corporations’ behavior under the ideal of CSR, which reflected the reality of China and corporations’ economy and social responsibility.

[1] Information from Chinese Government Public Information Online:

[2] This is the highest CPC position of the provincial level

[3] This is an agency under the Politburo of the Communist Party of China responsible for nationwide propaganda and information.

[4] Footnote by Translator Shan:
“Economic Foundation and superstructure” To build socialist harmonious society, at the macroscopic level, is harmony between economic foundation and superstructure. A widely accepted theory that been frequently cited by scholars under the discussion of Scientific Outlook on Development. Scientific Outlook on Development see
[5] Translator Shan’s footnotes, the sentence taking about Human rights were deleted in other publications.

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