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Multinationals Must Shoulder More Responsibility
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Several days ago, I was invited to deliver a speech at a corporate citizens forum and the organizers asked me to comment on multinational companies' corporate social responsibility in China. I agreed happily.


Why happily? Because CSR is a significant part of China's social progress and a commitment to corporate responsibility from multinationals is especially anticipated by the public.


The fact that the organizers picked the topic indicates the focus the whole society has on this topic. China used to treat multinationals as guests and offered them preferred treatment over domestic companies.


Now people have begun to see multinationals as part of society.


The Chinese have a tradition of treating foreigners with generosity and hospitality, so a guest usually gets better treatment. But becoming a family member means taking on responsibility.


Against this background, we have begun to ask multinationals to consider their social responsibility.


This is not asking too much from them, because they are capable of doing so. Compared to Chinese private and State-owned enterprises, multinationals have the power and influence to play a significant role in helping China's social progress.




To be frank, this expectation from the Chinese reflects their dissatisfaction about the status quo.


In many donations by multinationals, we see a lot of genuine willingness to grow with the local community, but they are not enough. I think multinationals can be more helpful in the following four areas:


First, multinationals should operate honestly like they do in their home markets, with the consciousness of a local citizen.


For example, we take many foreign medicines, which have been in use in overseas markets for many years. But multinationals should be clear China's healthcare system is quite different from the Western systems.


So what marketing and sales strategies should multinationals take and how should they build their sales teams?


This is not just a business activity, it is also an ethical issue. What I mean by providing products with a citizen's consciousness is multinationals should be responsible to consumers, for example offering training and education to doctors on the proper use of their new medicines.


In this area, multinationals still have room for improvement.


Some multinational pharmaceutical companies even hide information or mislead doctors. If we compare the instructions printed on some medicines in China and in overseas markets, there are significant differences in wording, completeness, and details of side-effects.


Second, multinationals should purchase and produce with the consciousness of a citizen.


As we know, multinationals set up factories in developing countries in the past in order to get closer to raw materials or supplies, but this also brought environmental issues.


Now, they outsource problematic issues to local companies. But this does not stop the pollution and exhaustive exploitation of local resources. Of course, it is unfair to put the responsibility of government agencies on multinationals.


But multinationals do have a role to play. Multinationals' Chinese operations can help reform their suppliers, who generate profit from the blood and sweat of their laborers.


Third, multinational companies can help build a system of citizen consciousness. We know China has many problems, such as corruption. So, operating in such an environment, multinationals can participate in corruption, or help reduce it, taking advantage of the systems in their home countries to help the government fight graft.


Why are they well behaved at home, but in China ignore business ethics and just chase profits?


Finally, I hope successful multinationals will help set an example for domestic companies in terms of how to become influential and respected businesses.


The author is a professor at the School of Economics and Management with Tsinghua University, and executive deputy director of the National Center for Economic Research with the university.


(China Daily January 17, 2007)

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