Corporate social responsibility in China’s new economic diplomacy ROBeRT J . hANLON

China’s state-owned enterprises (SOE) are often accused of irresponsible business practices when operating abroad, especially in regards to human rights (Brautigam 2009; Taylor 2009; Dobler 2008). Yet the language of corporate social responsibility (CSR) has been gaining significant ground throughout Mainland policy circles as a mechanism to improve corporate behaviour. In 2005, President Hu Jintao’s ‘Harmonious Society Policy’ went as far as directing the country’s business leaders to incorporate CSR strategies into their business models. While such developments are promising, this chapter argues that China’s embracement of CSR should be considered a strategic and sophisticated mechanism to promote trade. Regardless, the government’s attempt to force SOEs to adopt CSR policies has important implications for China’s foreign relations by encouraging corporate elites to consider human rights abroad. In this sense, China’s CSR commitment can be seen as a soft power strategy that brings a new framework for diplomatic engagement. This chapter is divided into five sections. First, it defines and introduces a framework known as CSR engineering to understand how the social responsibility concept has emerged in China. Second, it reviews China’s linkages within the global trading system and implications for economic growth. Third, this chapter explores the nexus between SOEs and human rights violations. Fourth, it offers evidence to highlight China’s applied use of CSR language within global institutions and policy forums. Finally, it offers insight into why China has chosen to engage the CSR paradigm as a soft power mechanism to multilateral economic diplomacy. Findings are based on empirical data collated from official Chinese Communist Party (CCP) policy statements and twenty-six semi-structured interviews with major stakeholders.1 Interviewees included senior management of multinational corporations (MNC), social enterprises, nongovernmental organizations (NGO), small-to-medium size enterprises (SME), intermediaries, consultants, academics and lawyers. Face-to-face interviewees were carried out in Hong Kong, Kunming, Guangzhou and Vancouver between January 2008 and July 2009. Results are also based on several hundred ‘off-the-record’ conversations held with industry at conferences and chambers of commerce events between 2007 and 2010. These conferences include the 2008 Anti-Corruption South Asia Summit in Singapore; the 2009 Anti-Corruption Asia Congress; the 2007 and 2008 CSR-Asia Summit conferences held in Hong Kong and Bangkok; the International Seminar on Business and Human Rights in Paris; and the 2009 Prime Source Forum: Annual Meeting Place for the Apparel Industry held in Hong Kong. To begin, it is worth conceptualizing the evolution of CSR in China to provide context of the domestic forces influencing the government’s approach to socially responsible business abroad.

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