Chinese Enterprises: Time to Assume More Social Responsibility

On November 28th and 29th, the Annual Meeting on Enterprise Competitiveness sponsored by China Business Journal was held with the theme “corporate profitability,going global and social responsibility.” Seemingly unconnected, these three issues, which would otherwise have appeared in a long process of different stages in history, have all come to people’s attention in China within a rather short time, due to its dramatic transformation of economic landscape ove the last 30 years. This is one of the outstanding features for China’s economic development.

Just a few years ago, Chinese enterprises were still concerned with meager profitability; today, corporate profitability has risen to a point where investors around the world are eager to tap into the opportunities of China’s rapid economic growth. Years earlier, we were still grappling with bankrupting state-owned enterprises (SOEs). Now their tremendous profitability has given rise to discussions on whether some SOEs’ monopoly profits will harm consumer interests.

Just a few years ago, we were still anxious to see whether Chinese enterprises would adapt to marketoriented reform and brave fierce market competition and all-round economic opening-up without the help of government protection and subsidies. At that time, efforts to “break the iron-rice bowl”, “cut payroll”, “reduce social burdens” and “pursue profits as the only goal” held sway.But now, we are no longer content with just enterprise profitability, but instead require them to shoulder more social responsibility.

In the span of less than three decades, Chinese enterprises have adapted from a planned, insulated economy to a matured market-based world economy, having covered the primary stage of development of marketeconomy and entering into a more “civilized” modern market economy. In the beginning, enterprises relied mainly on low cost and high input to develop, but at the sacrifice of stakeholders and even the whole of society in regards to low wages, lack of social security, environmental damage, resource exploitation and serious waste. But in the civilized competition of the modern market economy,new sources of growth must be pursued in order to establish and enhance corporate competitiveness. In addition to managerial expertise, technical innovation, patents and brand strategy, businesses became well-versed in financial investment and international capital markes, to compete,learn and gain experience. This is the new mission of Chinese entrepreneurs and executives. Enterprises should not only be profit seekers and wealth creators, but admirable corporate citizens as well.

Effective and fair competition is essential to a vibrant market economy, and businesses also need to be competitive in order to survive and thrive. No matter whether they are going global or taking up social responsibility, acquiring stronger competitiveness is the key. But we must recognize that it is high time for the business community to assume more social responsibility. Our annual meeting on corporate profitability, going global and social responsibility, therefore, has particular resonance from the business and academic communities today, as the three issues represent a historical task for Chinese enterprises, highlighting the potential of Chinese enterprises to become competitive and respected.