Saturday, 15 March 2008

Multinationals and CSR in China

There is a considerable interest in the economics literature as well as in the popular press on the behaviour or multinationals in developing countries. I have done some recent work on China.

It is therefore interesting to see the Chinese popular press jumping on this particular bandwagon. From a political economy perspective, corporate social responsibiluty (CSR) is a good stick for China to beat foreign firms with.

The real issue is not how badly foreign firms behave but how badly relative to their plants in thier domestic market and local firms.

Consumer message to foreign firms: Behave [Shanghai Daily]

CHINESE consumers and workers want transnational companies to exercise more social responsibility following a series of scandals, a survey has revealed.

The survey, by the Guangdong Provincial Situation Study and Investigation Center, polled more than 3,000 respondents - including consumers and employees of transnational companies in Shanghai, Beijing, Guangzhou and Shenzhen - on the firms' image in the nation.

About 70 companies were involved, including drinks giant Coca-Cola and telecommunications major Nokia, both of whom have a high-profile presence in China.

Close to 90 percent of those polled agreed that the companies had made significant contributions to the country's economic development.

However, only about 22 percent of those polled said that the companies had fulfilled their social responsibilities in accordance with profits they had made in China.

Almost 80 percent of the respondents also said there was discrimination against Chinese employees within multinational companies.

Feng Shengping, a researcher with the study and investigation center who led the study, said multinational companies should attach more importance to improving their corporate image among consumers, so they can better integrate into the economy and society.

"The public is paying more attention to whether multinationals are performing in accordance with the law, and whether they realize due social responsibility," Feng said.

"Transnational companies, which were once regarded as exemplary businesses for the Chinese economy, have, to some degree, lost their image among consumers, following a series of business scandals in recent years."

More than 570,000 foreign-invested companies have registered in China since 1982, bringing investment of US$665 billion, the researcher said.

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