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Observations & Measures on CSR Performance of Overseas Chinese Enterprises (1)

Prof. HUANG Haoming,
Executive Director & Vice Chairman
China Association for NGO Cooperation (CANGO)
This article focuses on the CSR performance of overseas Chinese enterprises covering the aspects of the current situation, international standards, successful cases, existing problems and main reasons causing those problems. The author of the article also points out the strategic measures to respond to the changing situation of external environments in terms of corporate development, strategic planning, and cooperation with NGOs as ways of promoting the internationalization process, compliance of management and performance of CSR of overseas Chinese enterprises.
Key Words
Overseas Chinese enterprises, corporate social responsibility, NGO relationship, strategic measures
  1. Current Development of Overseas Chinese Enterprises
In 2008, the State-owned Assets Supervision and Administration Commission of the State Council (hereafter referred to as SASAC) issued the Guidance on Central-government Owned Enterprises Social Responsibility Performance. It was the No. 1 document of 2008 and the highest level of the State Council documents in terms of Chinese enterprises’ CSR performance, an indication that the Chinese government is emphasizing on enterprises performing their social responsibilities. China has become the second largest economy in the world in the past 12 years and the improvements of opening up the economy and the advancement of the going-out strategy have made leaps and bounds in the internationalization process of Chinese enterprises. In 2013, Chinese domestic investors had set up 5,090 organizations in 156 overseas countries and regions, which totally value 90.2 billion USD in terms of non-financial direct investment. However, those Chinese enterprises encounter many challenges in the process of investing abroad with the criticism from western society, pointing out their lack of community involvement and partnership with the local NGOs in the destination countries and regions they locate.
Then, what is the relationship of Chinese enterprises and the social responsibilities? This can be summarized in three aspects from their internal logic: First of all, performing their social responsibilities has become the inevitable requirement for the development of those Chinese enterprises which have invested abroad. The 5,090 Chinese enterprises which have set up their factories, business companies and representative offices in 156 overseas countries and regions have become a large group of enterprises, which means they must have close contacts with the local government, business companies, social organizations, and the local consumers. Secondly, there must be a close relationship between the Chinese enterprises and the local society. Objectively speaking, the business activities must bring out connection with the local people. For example, their recruitment of local employees inevitably brings out the employment relationships, and whether they can handle the labor relationship according to the international regulations partly defines their social responsibilities. Finally, overseas Chinese enterprises and local stakeholders are inevitably linked together in other possible ways. The Chinese enterprises are linked to the government (both national and local level), business, NGOs, and individuals with either financial benefits or legal obligations, therefore their behaviors and words will influence the connection, interaction and conflict with the local society.
To sum up the above, CSR performance has become a relatively important element for overseas Chinese enterprises in terms of both business development and standard management. This is also a bottleneck for overseas Chinese enterprises to consider how they should handle the issues such as environmental protection, labor relationship, consumers’ rights protection, etc. besides their abidance to the local laws and regulations.