‘Social Responsibility’ in the Governance of Chinese State-Owned Enterprises

Abstract

This paper sheds new light on the mechanisms used to monitor Chinese MCNs compliance with their corporate social responsibility (CSR) obligations. China’s state-owned MNCs play a pivotal role in the implementation of the Belt and Road Initiative, and continue to account for roughly 30 cent of domestic GDP. SOEs’ position within China’s governance system, and the ideological features of China’s governance model make CSR obligations a binding duty of state-owned MNCs, and of their domestic and foreign subsidiaries.

In Western legal systems, CSR and its more recent evolution of business and human rights are understood as a form of regulation public and private enterprises may adopt on an entirely voluntary basis, and integrate within their business model. China’s case is obviously different. The first part of this paper places the notion of CSR (gongsi shehui zeren) against the backdrop of non-state based compliance and monitoring mechanisms specific to state-owned MNCs. Next, the paper describes the major CSR norms and mechanisms grounded within the system of regulations of the Chinese Communist Party. In its concluding section, the paper presents some reflections on the main features of CSR in China and their relevance to the Belt and Road Initiative.

Keywords: China, CSR, MNCs