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The role of international PR firms in the use of CSR to achieve harmonious society in mainland China and Hong Kong

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The role of international PR firms in the use of CSR to achieve harmonious society in mainland China and Hong Kong

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THE ROLE OF INTERNATIONAL PR FIRMS IN THE USE OF CSR TO
ACHIEVE HARMONIOUS SOCIETY IN MAINLAND CHINA
AND HONG KONG

by

Patrick M. O’Boyle

_____________________________________________________________________

A Thesis Presented to the
FACULTY OF THE GRADUATE SCHOOL
UNIVERSITY OF SOUTHERN CALIFORNIA
In Partial Fulfillment of the
Requirements for the Degree
MASTER OF ARTS
(STRATEGIC PUBLIC RELATIONS)

May 2007

Copyright 2007 Patrick M. O’Boyle

ii
Epigraph

“尊敬他人会为你赢得广泛的认可,
并促进你的经营”– 陶朱公, 越王的助手
“Treating people with respect will gain one wide respect and
improve the business”
Tao Zhugong 500 B.C., Assistant to the Emperor of Yue,
2
nd
Business Principle

“人人为我, 我为人人”
“Do everything you can to help others, and when you are in need,
others will help you”
Dr. Sun Yatsen (1866 - 1925)

iii
Acknowledgements

I would first like to thank those who agreed to be interviewed for this thesis’ primary
research section, including Drs. Stephen Frost, Jian Wang and Deng Xinxin. My
sincere gratitude also goes to my committee members, Michael Parks and Jerry
Swerling, as well as to my committee chair, Jennifer Floto. Thank you all for your
valuable comments, questions, input and encouragement.

I also want to thank my research assistant Charlotte for all of her help in translating
Chinese webpages, articles, documents and other text, and for sitting through hours of
“Gongguan Xiaojie” with me.

iv
Table of Contents

Epigraph ii
Acknowledgements iii
Glossary vi
Preface vii
Abstract viii

CHAPTER ONE: Introduction 1

1.1 Introduction 1
1.2 Statement of Problem 3
1.3 Definition of CSR 6
1.4 Harmonious Society – A Chinese Concept 6
1.5 Civil Society – A Western Concept 8

CHAPTER TWO: Literature Review 13

2.1 Western Concepts of CSR 13
2.2 Chinese Concepts of CSR 15
2.2.1 Philanthropy 16
2.2.2 China’s State-Owned Enterprise System 17
2.2.3 Social Responsibility from a Modern Chinese Point of View 19
2.3 A Brief History of Chinese Industry 21
2.4 South China Morning Post Coverage 24
2.4.1 “Looking Beyond the Investment” 25
2.4.2 “Firms Focus their Efforts on Specific Education Initiatives” 29
2.4.3 “Team Spreads CSR Message” 30
2.4.4 “Firms Keener to Give Something Back to Society” 32
2.4.5 “Goodwill Hunting” 35
2.5 Summary of South China Morning Post Coverage 36
2.6 The Standardization of CSR Guidelines in China 38
2.7 Summary of the Standardization of CSR Guidelines in China 42
2.8 NGOs in China 42
2.9 What Makes Good CSR? 45
2.10 The Legend of Lei Feng 48
2.11 Serge Dumont & Chinese Brands Abroad 50
2.12 Dr. Jian Wang 53
2.12.1 Corporate Communication Practices and Trends: 54
A China Benchmark Study 2006
2.13 Summary of Dr. Jian Wang Research 57
2.14 Arguments against CSR in China 58
2.14.1 Chinese Attitudes toward Ideas and Products Imported 58
from the West
2.14.2 Aversion to Self-Aggrandizement 61

v
2.14.3 CSR is Nothing but Corporate Smoke and Mirrors 62
2.14.4 Mind your own Business! 65
2.15 Summary of Secondary Research 66

CHAPTER THREE: Primary Research 67

3.1 Dr. Deng Xinxin Interview 67
3.2 Summary of Dr. Deng Xinxin Interview 75
3.3 Dr. Stephen Frost & CSR Asia 76
3.4 Summary of Dr. Stephen Frost Interview 85
3.5 Case Study: Fleishman-Hillard - TNS “The CSR Challenge: 85
Where Does Hong Kong Stand?”
3.5.1 The Role that Research Plays in PR Firms’ CSR-related Work 86
in China
3.5.2 The Research 87
3.5.3 The Event 90
3.5.4 The Website 93
3.5.5 Fleishman-Hillard’s CSR 94
3.6 Summary of Fleishman-Hillard - TNS “The CSR Challenge: 95
Where Does Hong Kong Stand?”
3.7 Gongguan Xiaojie 95
3.8 Summary of Primary Research 98

CHAPTER FOUR: Conclusion 100

4.1 Conclusion 100

BIBLIOGRAPHY 104

vi
Glossary
Chinese Communist Party CCP 中国共产党
Corporate Social Responsibility CSR 企业社会责任
Harmonious Society 和谐社会
The Kuomintang KMT 国民党
Multinational corporation MNC 跨国企业
People’s Republic of China PRC 中华人民共和国
Public relations PR 公关
Renminbi (the Chinese unit of currency) RMB 人民币
Special Administrative Region SAR 特別行政区

Special economic zone SEZ 经济特区

State-owned enterprise SOE 国营企业

U.S.-China Business Council USCBC 美中贸易全国委员会

vii
Preface
Chinese characters appear throughout this thesis because they offer clarification of the
Chinese concepts, terms and idioms referenced herein. This thesis deals extensively
with the People’s Republic of China (PRC) and the Hong Kong Special
Administrative Region, which use two different systems of Chinese characters
(simplified and traditional). Only simplified Chinese characters appear in this thesis
because Harmonious Society, a concept fundamental to the arguments and research
presented herein, is a PRC invention. Some of the characters that appear in this thesis
are accompanied by romanization that gives non-Chinese speakers an idea of the
characters’ pronunciation. There are many romanization systems in existence, but this
thesis relies almost exclusively on Hanyu Pinyin, the system promoted by the PRC
government and used throughout the PRC. Throughout this thesis, words spelled out
in Hanyu Pinyin are italicized. Some terms (i.e. Kuomintang) are not spelled in Hanyu
Pinyin because they are more easily recognized when spelled as they have historically
been romanized.

Where text from newspapers, magazines or other sources that use British English
(such as The Economist or sources from Hong Kong) is cited, the original British
spellings have been preserved. Therefore, words such as “organisation,” “endeavour”
and “programme” appear in their unaltered form because that is how they were spelled
(or spelt, as the case may be) in the original source.

viii
Abstract
“Harmonious Society” is an idealized state of national being that today’s Chinese
Communist Party considers a solution to societal problems such as corruption, wealth
disparity, unemployment, inadequate healthcare, pollution and worker unrest.
Business – domestic and foreign – is the Party’s top-ranking lieutenant in the
campaign to achieve Harmonious Society. Corporate Social Responsibility is the tool
that business will use to bring 1.3 billion Chinese into the 21
st
century incarnation of
the great socialist vision: national stability and equality for all citizens.

International PR firms create, enact and publicize CSR programs that complement the
CCP’s drive for Harmonious Society, genuinely benefit stakeholders and, ideally, earn
clients the goodwill that will (theoretically) increase profits. This thesis explores how
international PR firms operate in China’s unique CSR environment. What is the state
of CSR in China today and what does the future hold for international PR firms’
efforts to conduct CSR business in China?

1
CHAPTER ONE: Introduction

1.1 Introduction
Read through any newspaper or current events magazine today, and it’s hard not to
find reports trumpeting the growing wealth and power of the People’s Republic of
China. China is “on the rise” and has already been designated “the new superpower”
by pundits, politicians and publications throughout the West. Militarily, politically and
economically, China is certainly a force that the U.S. and the rest of the world cannot
ignore.

Western business has long been fascinated by China’s promising commercial
possibilities, and as China’s economy grows, so too does the West’s desire to do
business there. Ad-man and China hand Carl Crow’s 1937 book “400 Million
Customers” describes the rich opportunities and profits awaiting Western businessmen
in China during that era (Crow, 2002). The concept behind Crow’s book was
resurrected in 2005 when businessman and Ogilvy PR China consultant James
McGregor released the book “One Billion Customers” (McGregor, 2005). These
books show that for entrepreneurs, it is hard to resist the lure of China’s masses, who
provide both low-cost labor and a ready market for Western products.

Thanks to economic reforms launched by Chinese leader Deng Xiaoping in 1978,
China has opened to the West. With giddy excitement, multinational corporations have
charged in, sensing the promise of untapped markets and vast fortunes to be made.

2
They realize that China is the world’s newest and biggest emerging market for a wide
variety of products and services. And as the West marches further into China,
trumpeting its products, services and ideals, international PR firms are there to lend a
hand and tap into the new revenue streams now flowing from China. In the hands of
these firms, corporate social responsibility is a powerful tool, although concepts of
what CSR entails and how best to practice it vary widely between China and the West.

Western businesses operating in China soon discover that conforming to the Chinese
Communist Party’s wishes and, at times, helping the Party achieve its goals, are
prerequisites to business success in China. Today, one of the grandest and most often
touted goals of the CCP is Harmonious Society – a theoretical state of national being
in which the grandest dreams of the socialist vision (social order, equality, national
stability and security, and jobs and healthcare for all citizens) are achieved without the
trepidations China suffered under 20
th
century Socialism. For decades, socialist society
in China was marked by class struggle and violent upheavals such as the Great Leap
Forward (1958-1962) (Landsberger, 2007) and the Cultural Revolution (1966-1976)
(VMCR, 2007). The CCP considers Harmonious Society a silver bullet that can help
rectify the grievous wrongs of the past and solve some of China’s most pressing
societal problems. Such problems include, but are not limited to: corruption, wealth
disparity, disease, hunger, unfair labor practices, low wages, dangerous working
conditions, inadequate healthcare, degraded infrastructure, unemployment and
environmental degradation.

3
Harmonious Society is too ambitious and expensive a goal to be achieved by either the
CCP or the Chinese citizenry alone. Business – local and foreign – is therefore to be a
primary actor in pursuing Harmonious Society. CSR is to be the tool that business
uses to help achieve the CCP’s goal. Enter the international PR firms; multinational
communications experts like Fleishman-Hillard, Ketchum, Edelman and Ogilvy.
These PR firms see in CSR a chance to tap into a new market and offer services highly
valuable in today’s China, such as creating and publicizing CSR programs that help
stakeholders and endear corporations to the government. Most importantly to
international PR firms and their clients, CSR programs are intended to earn
corporations public goodwill and, ultimately, greater profits. In conducting their work
with CSR, PR firms are in their element; crafting strategic plans for CSR programs,
interacting closely with CCP officials, communicating with Chinese stakeholders and
publicizing their clients’ socially responsible deeds. But in performing these services,
international PR firms encounter difficulties because China’s CSR landscape differs
greatly from that of the West.

1.2 Statement of Problem

CSR in China, like the nation itself, is definitely on the rise. And it is a powerful force
that could ameliorate many of China’s pressing problems. But while the Chinese, like
people in most other societies, do appreciate the importance of treating others fairly
and helping less fortunate members of society, Western corporations tend to consider
CSR an investment from which they can expect a return. CSR programs will only pay
off, many corporations reason, if stakeholders hear about the programs. Corporations

4
hire international PR firms to publicize CSR efforts, but in doing so they run up
against millennia-old Chinese cultural traditions that discourage self-aggrandizement.

This is not to say, however, that international PR firms’ CSR work in China is strictly
limited to promotional PR tactics, such as the placement of laudatory media reports
about clients’ CSR and events held to publicize philanthropic donations and CSR
programs. International PR firms’ CSR work in China goes far beyond mere
promotion and extends into other areas of the CSR industry. International PR firms
can support CSR in many other ways, such as by organizing CSR conferences,
conducting CSR research, having partners speak on behalf of clients, focusing on CSR
issues rather than on raw dollar amounts, connecting clients with NGOs and influential
officials, and organizing internal communications campaigns related to CSR.

That being said, it could be that as Western corporations acquire more China
experience, they will come to realize that their efforts to publicize CSR efforts contrast
sharply with the behavior of Chinese firms. As China sinicizes (Bartleby, 2007) these
Western corporations, they may modify their CSR promotion efforts and align them
more closely with traditional Chinese mores. As for Chinese companies, it is doubtful
that they themselves will ever completely embrace international PR firms or the
Western CSR ideal. There are very few, if any, examples of a large Western PR firm
really working at a significant level with a mainland firm (Frost, 2006). Due to factors
such as Chinese aversion to bragging and reluctance to hire outside consultants,
international PR firms are thus forced to focus almost exclusively on MNC clients.

5
Regardless, there is still plenty of CSR business to go around for international PR
firms operating in China. And they will continue to prosper in China’s growing CSR
industry as long as they diversify their CSR services beyond mere promotion of
clients’ programs.

Aside from cultural taboos against self-aggrandizement, international PR firms’ CSR
efforts in China are further hampered by the argument that the firms are pressing the
CSR agenda in China only so that they can open up a new market for the services they
offer. But in China, where genuine help is needed so badly by so many people, the
motives of ethical corporate behavior ought to be irrelevant. What is important is that
corporations behave ethically. What is important is that money is donated to worthy
causes, communities are provided with new schools, pollution is cleaned up, wages are
made fair and employees treated with respect. If facilitating these kinds of CSR
activities earns PR firms their fees and the activities improve Chinese people’s
perceptions of MNCs, what of it? What is vital to the Chinese nation and to the MNCs
that operate there is that the CSR programs are genuine and effective. Any company
that touts its CSR, but that fails to actually enact genuine, thoughtful CSR programs,
besmirches its own reputation and the professional reputation of any PR firm
associated with the faux CSR program.

6
1.3 Definition of CSR
The working definition of CSR that will be used throughout this thesis comes from
Ogilvy Public Relations Worldwide, one of the international PR firms currently
operating in China. Ogilvy defines CSR as follows:
At its heart, CSR is about one thing: that regardless of whether or not people
are consumers of a given company’s goods or services, they should benefit,
ideally, from the very existence of the company. They certainly should not
suffer from it (Ogilvy, 2007).

The author chose this specific definition from the many that are available because this
definition is broad enough to encompass the many forms that CSR can take. This
definition does not limit the concept of CSR to traditional forms such as philanthropy
or environmental protection.

1.4 Harmonious Society – A Chinese Concept

The term Harmonious Society was first mentioned publicly by Jia Qinglin on March
12, 2005 at the Third Session of the Tenth National People’s Congress (People’s Daily,
2005). Jia is the fourth-highest ranking member of China’s Politburo Standing
Committee. President Hu Jintao, Premier Wen Jiabao and other leading Chinese
communists were all present for this landmark address, which laid out an important
new concept in Chinese politics. Since Jia’s speech, other leading communists,
including Hu Jintao and Wen Jiabao, have publicly declared that Harmonious Society
is a national goal. Thus, it has become a major issue and an often repeated mantra of
the Chinese government.

7
The follow excerpts (translated from Chinese by the Chinese Foreign Ministry)
paraphrase a declaration by the Sixth Plenum of the 16
th
CPC Central Committee
(Beijing, October 8-11, 2006). These passages offer insight into what CCP leaders
believe that Harmonious Society entails:
The building of a harmonious socialist society is an important strategic task,
which was put forward by the CPC under the guidance of Marxism-Leninism,
Mao Zedong Thought, Deng Xiaoping Theory and the important thought of the
“Three Represents” and with full implementation of the scientific concept of
development. Harmonious Society…embodies the common aspiration of the
whole Party and people of all ethnic groups.

The harmonious socialist society we are going to build…will adhere to the
Party's basic line, basic program and basic experience, adhere to the guidance
of the scientific concept of development in overall economic and social
development, follow the overall requirement of building a democratic society
under the rule of law, a society based on equity and justice, an honest and
caring society, a society full of vigor and a stable and orderly society in which
humans live in harmony with nature, strive to develop social services, promote
social equity and justice, foster a culture of harmony, improve public
administration, enhance the creativity of the society, pursue the road to
common prosperity, and push forward coordinated development of social
construction, economic construction, political construction and cultural
construction with the emphasis on solving issues people care about most and
issues that concern their most immediate and most realistic interests.

The main objectives and tasks for building a harmonious socialist society by
2020 are as follows: the socialist democratic and legal system is further
improved; the fundamental principle of administering the country according to
law is implemented in an all-around way; people's rights and interests enjoy
concrete respect and guarantees; the widening of the gap between urban and
rural development and development between different regions is gradually
reversed; a reasonable and orderly income distribution pattern takes shape in
general; the wealth of households increases universally and people lead more
affluent lives; the employment rate is relatively high and a social security
system covering both urban and rural residents is established in general; the
basic public service system is further improved and the government attains
relatively big improvements in administrative and service levels; the
ideological and moral qualities, scientific and cultural qualities and health
qualities of the whole nation are improved markedly and further progress is
made in fostering a sound moral atmosphere and harmonious interpersonal
relationships; creativity of the whole society is enhanced markedly and an

8
innovation-based country is established in general; the public administration
system is further improved and social order is in good condition; efficiency of
utilization of resources is enhanced markedly and visible improvement in
ecological environment is achieved; the objective of building a moderately
prosperous society of a higher level and in an all-around way to benefit the
Chinese people is realized and striving to attain a situation in which all people
do their best according to their abilities, everyone is provided for and people
live together in harmony (Chinese Foreign Ministry, 2006).

These excerpts offer a summary of the CCP’s countless public comments regarding
Harmonious Society. Despite the preceding excerpts’ long-winded description of
Harmonious Society, there is nothing in the way of solid direction on how exactly to
achieve it. Harmonious Society is a vision of what an ideal China would look like, and
what the country’s current leaders hope to leave as their legacy. It seems an honorable
goal to work towards. But it remains questionable how and whether Harmonious
Society can be accomplished. And while China’s political elites preach the gospel of
this new vision, hundreds of millions of normal citizens struggle to survive in the
anything-but-harmonious Chinese society that actually exists today. Assuredly, their
reality is far-removed from the pie in the sky socialist dreams of their political
overlords in Beijing. Miles and worlds away from the utopia envisioned by Hu, Wen,
Jia and Co., China’s masses must have a difficult time believing that the dream of
Harmonious Society will ever come to fruition.

1.5 Civil Society – A Western Concept

Harmonious Society is akin to the Western concept of civil society, a thorough
definition of which is provided here by the London School of Economics’ Centre for
Civil Society:

9
Civil society refers to the arena of uncoerced collective action around shared
interests, purposes and values. In theory, its institutional forms are distinct
from those of the state, family and market, though in practice, the boundaries
between state, civil society, family and market are often complex, blurred and
negotiated. Civil society commonly embraces a diversity of spaces, actors and
institutional forms, varying in their degree of formality, autonomy and power.
Civil societies are often populated by organizations such as registered charities,
development non-governmental organizations, community groups, women’s
organizations, faith-based organizations, professional associations, trade
unions, self-help groups, social movements, business associations, coalitions
and advocacy groups (London School of Economics, 2004).

The above definition offers the Western viewpoint of an ideal social construction: civil
society. But this model is not completely applicable in China, where nearly any
organized group must have the endorsement of the government or face opposition,
suppression and/or destruction. The London School of Economics’ vision of civil
society includes “institutional forms distinct from the state,” “faith-based
organizations,” social movements and trade unions, none of which would ever be
permitted to radically alter the social order propagated by the CCP. While there are
thousands of organizations in China dedicated more to helping society than serving the
government (Mosher, 2003), it is wrong to assume that all of these groups operate
under the same civil society paradigm that governs such groups in the West. Due to
the CCP’s nearly six decades of absolute power, the Party’s influence extends far
wider and deeper in Chinese society than most westerners would feel comfortable with
in their own countries. Therefore, the independence of civil groups operating in China
is rarely, if ever, absolute.

China is growing by leaps and bounds as it charges into the 21
st
century. Indicators
such as amount of goods exported, oil consumption and U.S. Treasury Bill holdings

10
have all risen substantially since 2001 (PNC, 2006). Figures have not yet been
finalized, but the value of China’s exports in 2006 is somewhere in the neighborhood
of US$170 billion (Elliot, 2007, p. 34). Economic growth, however, is far outpacing
social and political development, especially outside of major cities. According to a
recent issue of Time magazine:
If you ever feel mesmerized by the usual stuff you hear about China – 20% of
the world’s population, gazillions of brainy engineers, serried ranks of soldiers,
10% economic growth from now until the crack of doom – remember this:
China is still a poor country (GDP per head in 2005 was $1,700 compared with
$42,000 in the U.S.) whose leaders face so many problems that it is reasonable
to wonder how they ever sleep. The country’s urban labor market recently
exceeded by 20% the number of new jobs created. Its pension system is
nonexistent. China is an environmental dystopia, its cities foul beyond
imagination and its clean water scarce. Corruption is endemic and growing.
Protests and riots by rural workers are measured in the tens of thousands each
year. The most immediate priority for China’s leadership is less how to project
itself internationally than how to maintain stability in a society that is going
through the sort of social and economic change that, in the past, has led to
chaos and violence (Elliot, 2007, p. 35).

Despite the clean public bathrooms, bustling commerce, ritzy Western-style hotels and
endless hectares of shiny new buildings found in Shanghai and Beijing, China is still
in many ways a third world nation. The sad reality is that much of the country is
uncivilized and abysmally poor. In the villages outside of the cities, one finds the
“other” China (some would say, the “real” China), which exists just off the beaten
tourist track. In the countryside, not so many kilometers away from Beijing’s wide
boulevards and the swanky lounge bars of Shanghai, one can see how the vast
majority of Chinese people really live. Poverty, ignorance, injustice and misery are
endemic; the people’s state of existence epitomized by the idiom “eating bitterness
and enduring toil” (吃苦耐劳).

11
Here in the other China, there are no street sweepers picking up garbage. Public
bathrooms consist of an alley or a hole in the ground. There are no hotels that accept
foreigners. And the latest construction project consists of a village pigsty made from
scrap wood and wire. This is the China that the government would prefer to hide away
from visitors, who aren’t likely to drop in for a visit when they come to town for the
2008 Olympics. But this is the China that will play the biggest role in the nation’s
uncertain future, and this is the China that needs CSR the most.

The accomplishments of China have defied all expectations over the last 30 years, so it
may seem possible that Western-style civil society and/or Harmonious Society could
actually be achieved. But in the author’s opinion, these two paradigms face such
enormous obstacles that neither will ever be fully actualized. In the decades to come,
the four-character term for Harmonious Society – 和谐社会 – will probably change
and be replaced by some new catchphrase that more closely suits the prevailing socio-
political climate. Likewise, the Harmonious Society ideal will probably someday go
the way of the Lei Feng legend (see section 2.10) or Deng Xiaoping’s Four
Modernizations (see section 2.3) – vaguely remembered by the Chinese but no longer
nearly as relevant as when the idea was first propagated by national leaders. Fully
attaining the goal of Harmonious Society, however, is not as important as the societal
growth that occurs along the way. In pursuit of Western-style civil society or
Harmonious Society, China will continue to inch forward, generation by generation,
toward regaining its long-lost status as the most advanced, prosperous and civilized

12
nation on the face of the earth. Civil society and Harmonious Society are ideals that
China may never attain. But in pursuing them, the nation will go far.

International PR firms should welcome the push for civil and/or Harmonious Society
in China and view it as a grand opportunity. For PR firms and their corporate clients,
CSR is an extremely useful tool that dovetails nicely with the goal of Harmonious
Society. Those organizations able to align themselves with the government’s
development goals will reap the benefits of official CCP approval and support. In
China, which at the present time cannot claim to have either a civil or a harmonious
society, government backing is crucial for large organizations, including corporations.
To seize the strategic business advantage, companies must quickly get on board with
Harmonious Society and demonstrate that they are doing something to help build up
the country. International PR firms able to assist in this endeavor will share in the
rewards.

13
CHAPTER TWO: Literature Review
There are millions of webpages dedicated to the topic of CSR and PR in China. This
Literature Review summarizes only a few choice selections, from English and Chinese
language sources, of all the information that is available to those interested in these
topics. To narrow the range of information, sources presented in this Literature
Review support one of two attitudes toward international PR firms that conduct CSR-
related business in China:
1. Sources that indicate Western-style CSR is catching on in China and that
international PR firms will have increasingly more chances to conduct CSR-
related business in China.

2. Sources that indicate international PR firms are failing or could fail in their
attempts to do more CSR-related business in China.

The Literature Review will begin with an examination of Western and Chinese views
of CSR, and then explore arguments for and against the rise of CSR in China.

2.1 Western Concepts of CSR
In the West, there seem to be as many definitions of CSR as there are companies
claiming to practice it. But there are several recurrent themes that appear in the many
definitions of CSR. Cited below are some select definitions of CSR that highlight
central themes such as treating stakeholders well and living up to one’s professed
values; in effect, “practicing what you preach.” These high-minded ideals are what
Western companies, and the PR firms that represent them, should strive for.
CSR means different things to different companies, it can be broadly defined
as the concept that corporations should voluntarily commit to ethical,
responsible business practices, reflecting the interests of all stakeholders in the

14
company’s policies and actions. Key areas of concern include but are not
limited to employee relations, environmental stewardship, community outreach,
and corporate governance. (American Chamber of Commerce in Shanghai)
(AmCham, 2006)

[CSR is] the integration of business operations and values, whereby the
interests of all stakeholders including investors, customers, employees, the
community and the environment are reflected in the company’s policies and
actions. (CSRwire) (CSRwire Homepage, 2007)

[CSR] is simply about accepting the responsibility that goes with employing
people or using the services of those who do. It is about complying with labor
standards, laws and regulations – local, national and international. It is about
paying a living wage, working reasonable hours, providing a safe workplace
and respecting the human rights of those employed – from toilet cleaner to
general manager. (Neil Kearney, General Secretary, International Textile,
Garment and Leather Workers’ Federation) (Kearney, 2006)

CSR is what your stakeholders think you should be doing if you are a good
company. (Stephen Frost, CSR Asia) (Pawlyna, 2006)

In terms of power and influence you can forget about the church, forget
politics. There is no more powerful institution in society than business... The
business of business should not be about money, it should be about
responsibility. It should be about public good, not private greed. (Anita
Roddick, founder of The Body Shop) (Roddick, 2005)

We need a new system of values, a system of the organic unity between
humankind and nature and the ethic of global responsibility. (Mikhail
Gorbachev) (Gorbachev, 2006)

We are made wise not by the recollection of our past, but by the responsibility
for our future. (George Bernard Shaw) (Shaw, 2006)

The above-mentioned concepts of CSR are admirable but represent the views
primarily of Western thinkers on the subject. These ideals, regardless of their merit,
cannot be easily forced on China, a proud, ancient civilization with its own
traditions and epistemology. Western corporations and PR firms must bear this in
mind when considering their CSR programs in China. They must be careful to

15
avoid ethnocentrism and the assumption that what works for the West will also
work for China.

2.2 Chinese Concepts of CSR

A business’ priorities should entail the following: caring for and respecting
employees; protecting the natural environment so that the sky is blue and the
water clean; doing charitable works; and helping the poor, because if one gets
rich, then one ought to help others get rich, too. (Wahaha Corporation CSR
philosophy) (Wahaha Corporation, 2007)

Companies should conduct CSR voluntarily because business utilizes a lot of
social resources. Although a company creates profits, without the support and
understanding of the society, the company does not have a platform on which
to develop. (Guo Guangchang, President of Shanghai Fu Xing Corporation)
(Guo G., 2007)

Conducting good business is not about donating money or doing other
charitable acts to gain face…Businesses that conduct CSR simply to gain face
tend to select programs randomly; programs that have no connection with the
business’ long-term development strategy. But if we study the CSR of leading
MNCs, we see that they do not blindly donate money to charity. Instead, they
choose programs that suit their values and strategies. When a business decides
to devote resources to CSR, the program should relate strongly to the business’
core competency. The business can then achieve more obvious results, as well
as help to further strengthen its core competency. (Guo Shina, former president
of IBM China) (Guo S., 2007)

Before, because of my own personal ideals and beliefs, I didn’t want other
people to know when my company made charitable donations. But this way of
doing things might have been a bit childish because a business that cares about
CSR and that hopes to influence others should let people know the company
through its actions. Doing so will attract more business and attract more people
to meet society’s needs. Business can actually do tangible things to support the
development of society. Creating wealth is very important, but CSR is equally
important. (Chen Tianqiao, President of Shanda Company) (Chen T., 2006)
[CSR] is to conduct our business in a socially responsible and ethical manner,
respect the law, support universal human rights, protect the environment and
benefit the communities where we work. It is to do business the right way,
with integrity and honesty. (Greater China Country Chairman Peng Xiaofei,
Chevron) (Ma, 2006)

16
The Chinese concepts of CSR presented above in many respects mirror the Western
ideals of CSR mentioned in section 2.1. But the words of these modern day Chinese
business leaders represent a paradigm shift that has occurred in China only recently,
and one that has not been fully embraced by the entire Chinese business community.
The “new” concept of CSR that Guo, Chen, Peng, etc. speak of has not been
universally adapted in China because it is quite different from the types of CSR that
were practiced in China until very recently. China does have its own CSR tradition.
But in years past, CSR was practiced differently under two distinct, primary
paradigms, which are:
1. Philanthropy, particularly the donation of money and facilities to the
hometowns of successful Chinese businesspeople

2. The state-owned enterprise system, which supported Chinese workers and their
families for much of the 20
th
century

2.2.1 Philanthropy
As in the West, philanthropy is a major element of CSR among Chinese companies.
But in ages past, large monetary gifts were not issued by the rich as grants to NGOs or
disbursed through government channels. Instead, successful Chinese businesspeople
made large donations to their hometowns. Donations could have been used for civil
works projects, such as the building of roads, schools and healthcare facilities. This
form of CSR guaranteed that the donor would receive much “face” (面子) in his
hometown. Donations helped improve the reputation of businessmen who, although
financially successful, were nonetheless looked down upon because business was not

17
regarded as an honorable profession (Deng, 2007). This disdain for businessmen is
exemplified by the Chinese saying “士農工商” (literally, “scholar/official-farmer-
worker-businessman”), which summarizes the social hierarchy of ancient China. The
meaning of this phrase is that businessmen are ranked lowest on the social scale
behind those who work in education/officialdom, tilling the land and industry (Liu G.,
2007).

During the Communist era, any sort of ostentatious display of wealth was deeply
frowned upon. Indeed, throughout the turbulent 1950s, 1960s and into the 1970s,
landlords and those with wealth were specifically targeted as class enemies. These
unlucky souls were stripped of their money, deeds and titles and held up to society for
ridicule; many were even killed for their perceived crimes. But in 1978, Chinese
leader Deng Xiaoping announced the relaxation of policies that for nearly three
decades had stifled private enterprise and foreign investment in China. The drive
towards a modern China began. The economic reforms that Deng launched have
resulted in the great wealth that China enjoys today. After 1978, Chinese businessmen
began to regain the freedom to make money, as well as the freedom to practice
philanthropy.

2.2.2 China’s State-Owned Enterprise System
Chinese industry is deeply affected by the country’s state-owned enterprise system.
The Consulate General of Switzerland in Shanghai provides a short, accurate
assessment of the Chinese SOE system’s history and the extent of its influence:

18
After the founding of the P.R. China in 1949, the government nationalised
almost the entire industrial economy by taking over the previous state owned
companies, subsidiaries of foreign firms [and] private companies. Two
categories of ownership were created along the Soviet model: ownership by the
state and ownership by the people, often called collective ownership. By 1958,
the state sector accounted for 89.17% of the industrial output, up from 32.69%
in 1949 (Sun, 1999). On the eve of the economic reforms in 1978, the SOEs
accounted for 80.8% of the total industrial output (Lin J.Y., 1999) / (CCER,
2002).

Under the former planned economy, the SOEs had little discretion over their
business operations. Production, purchase, sales and even the wage rates were
all decided and allocated by the government. Moreover, SOEs had [multiple]
functions at that time. On the one hand, they were enterprises supposed to
reach production targets and generate profits, on the other hand, they should
act as policy executors who had to provide job opportunities and undertake
social welfare functions for their body of employees. With this burden of
multiple and sometimes conflicting tasks, the economic performance of the
state-owned sector was extremely poor. Many SOEs just survived on the
government’s protection and subsidies, e.g. cheap raw materials and low
interest loans from the state banks, among which a large percentage became
non-performing eventually.

At that time, the secure jobs in [these] enterprises were called “large canteen
meal” and “iron rice bowl”. Even if the bowl fell to the floor it never broke
(Nie, 2005).

In the SOE system, CSR took the form of guaranteed healthcare and wages, retirement
benefits and other perks for the millions of Chinese who spent their lives toiling in the
SOE machine. Every large industry in China was controlled by SOEs, which provided
the cradle-to-the-grave social welfare that today’s Chinese workers can only dream of.
This system of “socialist corporate paternalism” guaranteed everyone housing,
medical care and some form of income. The SOE system was primarily concerned
with the welfare of workers, still an important part of Chinese CSR today. But the
SOEs’ socially responsible programs did not extend to other elements of CSR, such as
environmental conservation, that are considered important today.

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2.2.3 Social Responsibility from a Modern Chinese Point of View

The change in Chinese attitudes toward CSR is exemplified in a May 2006 article by
Chen Shengqiao, a Chinese marketing communications consultant and business
columnist who studies and frequently writes about social responsibility among
Chinese companies. The article, “Social Responsibility Makes Corporations More
Competitive,” appears on the Chinese-language “Corporate Social Responsibility
Alliance” website (Chen S., 2006). This article outlines several key reasons why social
responsibility is important to Chinese companies and stresses the point that social
responsibility needs to be part of every company’s overall business strategy. Chen’s
progressive views support the hypothesis that the Chinese are increasingly paying
attention to CSR.

Chen believes that business is tightly entwined with social responsibility and that
businesses must conduct CSR programs. He also believes that although it is
imperative to put shareholders’ profits first, a business should also appreciate non-
contractual responsibilities such as environmental protection, employee welfare and
charity. These responsibilities are not as absolute or legally binding as contractual
obligations, but exert great influence and can even determine whether a business
survives or fails. Chen’s key points, translated from Chinese, are as follows:
1. CSR makes a business more competitive. Nowadays, there is increased
competition between Chinese and foreign firms. But they aren’t just
competing on the basis of the Four P’s (price, products, placement and
promotion). They also compete on the basis of brand image and social
influence. If a business takes social responsibility seriously, and makes
protecting and promoting social development a business strategy, this
helps bring the business closer to the public. It also helps achieve the

20
government’s goals, wins the business government support and
improves the brand image. Businesses need to view CSR as an
investment in the brand.

2. CSR helps the business break through trade barriers and market
barriers. China depends more and more on exports, but we are also
facing the problem of trade and market barriers set up by other
countries. Take, for example, the Stockholm Convention on Persistent
Organic Pollutants (Hagen & Walls, 2005), an agreement reached in
October 2004 that put strict controls on environmental pollutants. Such
agreements really affect China. Chinese companies didn’t use to pay
much attention to environmental protection, but now we are obligated
to do so. If we aren’t environmentally responsible, ethical risks become
business risks. Ignoring environmental responsibility is not an option,
and such kinds of CSR must be part of the whole business strategy. It’s
especially necessary if Chinese companies hope to add credit to our
brands and business image in the foreign market.

3. CSR helps a business grow. Traditionally, whatever a business does is
meant to maximize profits. But nowadays, businesses realize that they
are beholden not just to shareholders, but also to other stakeholders. If a
business does everything for economic reasons (profits) and consumers
see that, then consumers will feel disgusted with the company and
won’t buy its products. Of course companies must still seek to
maximize profits, but they also need to meet priorities set by employees,
suppliers, consumers, the society at large and the government. Only
through balancing the “profits” that all of these stakeholders receive
and working with these parties to achieve a harmonious win-win
relationship can businesses remain strong in the long run.

Clearly, Chen has a strong appreciation for the place of CSR in modern China. His
comments are also good news for international PR firms hoping to conduct CSR-
related business for Chinese clients. If more Chinese companies were willing to follow
Chen’s suggestions and begin developing advanced, diverse CSR programs, then
international PR firms might find more Chinese clients willing to take advantage of
the PR firms’ services.

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2.3 A Brief History of Chinese Industry

To better understand the current state of the modern Chinese business world, it’s
important to first develop an understanding of the history of Chinese industry and
business. This brief history is designed to give the reader a sense of how the Chinese
business landscape has evolved.

China’s industrial sector, which today feeds Western consumption and dominates Asia,
began its rise to glory in the late 19
th
and early 20
th
centuries. Industrially speaking,
China lagged far behind the West prior to this era. The movement to undertake
massive, fast-paced industrialization was a reaction to China’s devastating military
defeats at the hands of industrialized nations around this time. These defeats included
losses to Great Britain in the First Opium War (1834-1843), Great Britain and France
in the Second Opium War (1856-1860), France in the Sino-French War (1884-1885)
and to the Japanese in the First Sino-Japanese War (1894-1895). During the Opium
Wars, China’s disjointed, weak military was quickly crushed by Great Britain’s
technologically superior military; the Chinese were no match for Great Britain’s
warships, cannons and other advanced weaponry. During the 8-month Sino-Japanese
conflict, Japan’s European-built warships destroyed most of China’s fleet.

As a result of these losses, which cost China land rights and large indemnities, and
forced the country to make major trade concessions to foreign powers, China
recognized the value of industrial development and began to modernize. If the nation
was to maintain its independence and avoid being ruthlessly dissected by foreign

22
invaders, then there was no other option but to acquire the industrial base and
technology that was serving Europe and Japan so well.

As this modernization period began, the Chinese viewed the ultimate goal of industry
with a nationalistic eye. Business owners also felt obligated to secure the country and
the public from further humiliation and war. Industry set out to provide the tools that
would win the country back its territory, independence and prestige, thereby helping
the greater society. The idea was to serve the nation state and make the entire nation
strong.

After the CCP wrested control of China away from the nationalist Kuomintang (KMT)
party in 1949, industry began to serve the CCP through a centrally planned economy
and politics began to play a larger role in business. Collectivization of industry and
agriculture were the rule (Frazier, 2002). Business and industry were blended to form
a massive juggernaut of production and politics. This model lasted until the formal
announcement of a sea change was made in 1978. In December of that year, at the
Third Plenum of the 11
th
Central Committee, Deng Xiaoping announced a series of
pragmatic new economic reforms known as the Four Modernizations (四个现代化).
Elements of China’s new plan called for the de-collectivization of agriculture, a
declaration of China’s “open door” to foreign investment and the modernization of
industry, agriculture, national defense, and science and technology. Economic success
also became a priority (Country Studies, 2007). Between 1979 and 1980, four Special

23
Economic Zones (SEZ) were established in southeast China: Shenzhen, Zhuhai,
Xiamen and Shantou. These SEZs remain models of business success in China. In the
mid 1980s, further economic reforms were introduced; the “scope of mandatory
economic planning [was] reduced, state enterprise autonomy increased [and] foreign
trade decentralized” (Reed College, 2002). The culmination of all these reforms was
Deng’s January 1992 “Tour of the South,” during which “His speeches opposed
cautious party purists and urged people to experiment with radical economic opening
up in order to achieve prosperity” (Reed College, 2002). It was during the tour that
Deng spoke the famous words that ensured the bright future of Chinese businessmen:
“To get rich is glorious; to be poor is shameful” (致富光荣, 贫穷可耻). Deng’s words
are not meant to be a capitalist call to arms so much as a clarification that Socialism, at
its core, calls for everyone in society to receive an equal share of all resources. If
everyone is rich, then that brings glory to the nation. If everyone is poor, then the
nation is shamed. The implied meaning of Deng’s words was that Chinese people
ought to begin accumulating wealth, and then feed that wealth back into society so that
everyone could enjoy a higher standard of living. China has certainly prospered
greatly in the years since 1992. But what is not so apparent is whether the rich have
been willing to take the next step and help raise up their fellow citizens.
Nowadays, business in China must still pay heed to the government, but business’
main goal is to serve the wallet, not the Party or the people. Nonetheless, thanks to
Deng’s words and a history of social responsibility in China, the idea that industry and
business should work to make the country strong still exists in China’s business world.

24
This is probably especially true among older Chinese, who witnessed China’s
revolution and their country’s subsequent economic struggles and development.
Younger generations of Chinese, however, who have grown up in a country radically
different from that their parents knew, may not feel as obligated to help facilitate the
public good as their parents. How long Deng’s words will resonate is open to debate,
and it may be that future generations of Chinese businessmen will forget the deeper
meaning of Deng’s words and instead focus only on achieving their own personal
financial “glory.”

2.4 South China Morning Post Coverage
CSR has become a much talked about topic in China. The increased emphasis on CSR
is particularly evident in Hong Kong, a Special Administrative Region of China where
a lack of physical area certainly has not limited the appetite for business and the
capacity for earning money. Despite fears that Hong Kong’s economy would falter
after Great Britain gave up control of the former colony to the PRC in 1997, Hong
Kong’s economy has instead thrived (HKTDC, 2006). Perhaps it is Hong Kong’s
integration into the mainland economy (and thus, the push for Harmonious Society)
that has given rise to an increased emphasis on CSR by Hong Kong companies.
Whatever the reason, the practice of CSR is widespread among Hong Kong companies
and they are, through leadership by example, helping to move their mainland
compatriots down the same road.

25
The July 20, 2006 edition of the South China Morning Post, Hong Kong’s English-
language paper of record, contained a special insert focusing on CSR in Hong Kong.
This insert contained more than a dozen articles about the topic, and a multitude of
viewpoints, sources, quotes and facts were presented. According to the author’s
research, the running of this special insert by the South China Morning Post was
partially ad-driven and partially an editorial decision. Furthermore, four of the five
articles discussed in this section of the thesis were written by freelancers, as opposed
to staff reporters. Only Scarlet Ma (“Looking Beyond the Investment”) is a full-time
South China Morning Post reporter. It is difficult to know exactly how much of the
CSR insert’s content was placed or influenced by PR firms or the corporations
mentioned in the articles. To the reporters’ credit, the first two of these five articles
openly identify sources as PR professionals or corporate representatives before
quoting them. These two articles offer some very interesting insights into Hong
Kong’s CSR trend from a PR perspective, which is why they are included in this thesis.
In the remaining three articles, the extent of PR/corporate influence over the content is
less obvious; therefore, the reader is advised to remain critically vigilant when
considering their content.

2.4.1 “Looking Beyond the Investment” (Ma, 2006)

Citing the words of an Edelman Hong Kong employee, this article begins by summing
up the way that many Western corporations and PR firms view CSR in China:
Corporate social responsibility can be a way to generate cash rather than leak it
if companies follow a few necessary steps, according to Ashley Hegland

26
(CSR Asia, 2006, Ashley Hegland), a specialist in CSR and sustainability at
public relations agency Edelman. Hegland said:

CSR is not a cost but a worthy investment; it is not an add-on but the key to
successful reputation management. CSR can bring incredible benefits but
many Hong Kong companies are not taking advantage of it. They are reacting
to the trend but not really seeing CSR as their opportunity.

It is interesting to note how neatly Hegland’s suggestions for companies dovetail with
the CSR work that PR firms, including Edelman, do in Hong Kong. PR firms are
ready, willing and able to help corporations run CSR programs precisely because the
Western paradigm of CSR coordinates perfectly with the kind of work that
international PR firms do: identifying stakeholders and helping clients connect with
them, managing reputation, etc. Consider these further quotes from Hegland in which
he describes how corporations should conduct CSR programs. After reading his
suggestions, a Western CEO would naturally turn to a PR firm for help in achieving
the good results described in “Looking Beyond the Investment”:
Externally, the company must identify its stakeholders, which might include
non-governmental organisations (NGOs), the government, partners, clients,
end users and the public. It must talk to stakeholders and determine the issues
that needed to be addressed.

One of the most important things is to have a meaningful two-way dialogue
with stakeholders. If these relationships are well managed, stakeholders will
think the company is adding value to them.

Identifying stakeholders; talking to them; determining the issues that need to be
addressed; meaningful two-way dialogue; well-managed relationships. These are the
kinds of activities and catchphrases that are the bread and butter of PR firms. CSR, it
seems, is good for everybody: corporations, stakeholders and PR firms.

27
Also quoted in this article is Microsoft Hong Kong senior director of business and
marketing Adam Anger. His view of CSR is in line with the traditional Chinese moral
viewpoint that it is good and correct for those with wealth and power to look after the
needs of society’s less advantaged groups:
Every successful corporation [has] a responsibility to use its resources and
influence to make a positive impact on the world. Microsoft is committed to
creating opportunities in communities around the world. We foster economic
growth and contribute to [society] through innovative technologies and
partnerships with government, industry and community organisations. We are
committed to serving the public.

Anger then describes the ways in which Microsoft contributes to Hong Kong society.
The CSR programs he mentions offer Hong Kongers computer hardware and
educational programs that give people valuable computer skills. Of course, these
activities also expand the market for Microsoft products. According to the article:
Microsoft helps to bring technology to underprivileged people in Hong Kong,
including schools. It offers grants, software and computer courses. And it
supports networks to help people realise their potential through improved
access to technology. The company also has a community-based technology
and learning centre project that helps NGOs. Microsoft has helped to establish
15 of these learning centres, and more than 20,000 individuals have benefited
from its free IT training programmes.

Technology is vital to Hong Kong’s ongoing success, and community
partnership is the best way to foster growth, advance technology use and skills,
and promote digital inclusion. With the support of partners and customers,
Microsoft is committed to creating greater value for Hong Kong in the years to
come.

It’s unknown whether Microsoft was an Edelman client at the time that this article
appeared in the South China Morning Post. But if this were the case, it would be an
excellent example of Edelman securing laudatory press coverage of Microsoft’s CSR
efforts in Hong Kong.

28
This article also describes the CSR efforts of another MNC: Chevron (Greater China).
Chevron’s country chairman Peng Xiaofei states in the article that Chevron focuses its
CSR efforts internally. This differs from the approach of Microsoft, which gears its
CSR programs toward external stakeholders. The article states:
Chevron offers employees courses on safety and health. Staff have flexible
working hours so that work does not clash with family responsibilities. The
company has spent more than $6,000 per employee to give staff the best
working environment. Thought goes into the work environment to ensure that
chairs offer support and comfort, keyboards are in an ergonomic position and
the lighting in the office is right.

The article mentions that Chevron employees are committed to CSR, too. For example,
in 2005, employees volunteered through the Boys’ and Girls’ Clubs Association of
Hong Kong to spend time with children from low-income families, teaching and
talking with the kids. Said Peng of these CSR efforts:
We are very proud of our employees. It’s easy to donate money for charity
work but not as easy to contribute time and effort. I think our staff’s
participation is more valuable than the money we spend [on sponsorship].
Everything is worthwhile when you see the smiling faces of the kids and our
colleagues. The community service brings mutual benefits. The kids were well
taken care of and our staff found the service rewarding. We give our staff and
their families opportunities to have a meaningful and quality life. And they
have a better sense of belonging to the company.
Again, it is unknown whether Chevron was an Edelman client in the summer of
2006. But if so, then Edelman’s media relations team was probably behind this
glowing report on Chevron’s CSR efforts. Regardless of how the article was
placed though, it appears that both Chevron and Microsoft have undertaken serious
CSR programs in Hong Kong that are having an effect.

29
2.4.2 “Firms Focus their Efforts on Specific Education Initiatives” (Knight, 2006)
This article highlights the popularity of educational programs as a form of
CSR in Hong Kong, and specifically lauds the CSR efforts of Citigroup in the SAR.
Again, readers must keep in mind that Citigroup and/or its PR team may have had a
hand in placing this article. But still, the article demonstrates the type of CSR
programs being enacted in Hong Kong today. Robert Morse, chief executive of
Citigroup Corporate and Investment Banking (Asia-Pacific), describes a Citigroup
program called the Financial Education Series:
[The program consists] of 12 financial education programmes organised in
conjunction with the government, non-profit-making organisations and other
local bodies, such as Radio Television Hong Kong, Education and Manpower
Bureau and ET Business College. Citigroup’s Financial Education Series uses
the bank’s expertise in banking and finance to foster a better understanding
about money and financial management in the community.
The financial education programs described in the article include branded Citigroup
programs such as the Citigroup International Case Competition and the Citigroup
Stock Challenge, as well as the Personal Economics Programme and the Adventures
of Agent Penny. These programs were, respectively, designed to teach young Hong
Kongers about business, the basics of equities and stock investment, developing
financial and economic literacy, and fundamental concepts of money management.
Through grants made to partner organizations, Citigroup spent HK$8 million in 2005
to fund financial education programs in Hong Kong.

In this article, Richard Welford of CSR Asia (an Asia-based NGO dedicated to
disseminating news about the development and practice of CSR throughout Asia)

30
praises Citigroup’s practice of creating CSR programs that are based on the
corporation’s area of knowledge and experience (finance, in the case of Citigroup).
Welford said that more companies in Hong Kong ought to go this route instead of
spreading their CSR funding around to many different programs in different areas.
Educational programs, like those organized by Citigroup, are a great service to the
community. And as Welford notes, they serve the corporation in two ways. For one,
the programs improve the corporation’s image with the public. Second, they give the
corporation access to up-and-coming talented individuals who may be persuaded to
eventually join the corporation.

2.4.3 “Team Spreads CSR Message” (Taylor, 2006)
Community Business is a non-profit organization in Hong Kong whose stated mission
is to “Inspire, lead and support businesses to continually improve their positive impact
on people and communities” (Community Business Homepage, 2007). The leadership
of this organization consists of businesspeople from a wide variety of local and
international companies and organizations that operate in Hong Kong. The “Team
Spreads CSR Message” article describes the Hong Kong Corporate Responsibility
Charter, an agreement initiated and developed by Community Business members
seeking to integrate CSR principles into their own companies and promote CSR in the
greater Hong Kong community. The compact, which the members agreed upon in
September 2005, was signed by organizations such as Timberland, UBS, Towngas,
Manpower, DHL, CLP Holdings, the British Council, MTR Corporation, PepsiCo
Asia, Schroders and Standard Chartered. Benjamin Hung Picheng, country head of

31
consumer banking at Standard Chartered, is quoted throughout this article. Hung
serves as chairman of the Community Business Leadership Team, the group of 40
senior executives who initiated and developed the Hong Kong Corporate
Responsibility Charter. Together, the team works to spread knowledge of CSR and
strengthen the practice of CSR in Hong Kong. They pay particular attention to Hong
Kong-based small and mid-sized firms, many of which are unfamiliar with Western
concepts of CSR. Said Hung:
CSR is more entrenched in the OECD [Organisation for Economic Co-
operation and Development] countries such as the United States, Britain and
Europe than in Hong Kong. The notion of CSR in Hong Kong is more
prevalent among multinational companies. If you look at our membership, it
tends to be multinationals with the exception of a few large local companies
such as the MTR Corporation and CLP Holdings.

Hung also said that signatories of the Charter police themselves; there is no
enforcement of CSR rules or principles. In time, he hopes, more native Hong Kong
companies of all sizes will come to see the importance of CSR and incorporate it into
their business strategies. Like the other articles presented in the South China Morning
Post’s July 2006 CSR special insert, this article may have been influenced more by PR
forces than by solid investigative reporting. Nonetheless, the existence of the CSR
charter that is described in this article is an indication that businesses in Hong Kong
are (at least on a superficial scale) taking it upon themselves to begin implementing
CSR, and that there is a movement afoot to encourage Hong Kong businesses to
comply with basic CSR standards.

32
2.4.4 “Firms Keener to Give Something Back to Society” (Pawlyna, 2006)
This article highlights the growth of CSR consciousness among Hong Kong firms and
describes the increasing popularity of CSR programs. According to the article, CSR is
commanding the attention of Hong Kong’s business leaders, and local companies are
becoming increasingly keen to publicise their good deeds and good intentions. Quoted
extensively in this article is Dr. Stephen Frost of CSR Asia. Frost is a trusted and
widely quoted authority on CSR in Asia and has broad knowledge of CSR trends and
practices throughout the continent.

Frost states in this article that CSR means different things to different companies
because the world of business is so diverse. Said Frost, “We don't expect an extractive
company to be doing the same sort of things as an apparel company.” Frost means that
companies ought to focus their CSR efforts in areas where they are most
knowledgeable and experienced, an approach exemplified in “Firms Focus their
Efforts on Special Education Initiatives” (section 2.4.2).

What matters most, according to “Firms Keener,” is that companies engage in an
ongoing dialogue with their stakeholders. Frost continued, “[CSR] is becoming more
popular among local companies in Hong Kong because more foreign companies are
doing it, so the branches and subsidiaries of foreign companies are expected to do it as
well.” These local branches and subsidiaries must have open communication with the

33
relevant stakeholders if they expect to fall in line with the international CSR vision of
the head office.

The article goes on to mention the key findings of the Fleishman Hillard-TNS survey
of Hong Kong mid-level executives, as well as the key drivers of CSR in Hong Kong
and other information gleaned from the research. For an in-depth analysis of this
research and how Fleishman Hillard used it, refer to the Case Study in this thesis’
Primary Research section (section 3.5).

Frost noted that the area of “supply chain CSR” was one of the more credible human
resources CSR practices in Hong Kong. Supply chain CSR refers to a mother
company’s efforts to foment responsible, sustainable practices in the smaller
companies that provide the goods or services necessary to produce the mother
company’s goods or services. Frost said of supply chain CSR, “That’s where the big
brands that are sourcing from China are trying to ensure their suppliers meet the
compliance requirements on labour and social standards. Supply chain businesses are
extremely aware of labour practice issues.” Since the supply chains of Hong Kong
companies often extend into mainland China, it follows that Hong Kong’s CSR is
having an effect there.

Frost also describes the importance of stakeholder dialogue when devising CSR plans.
He cites the building of a cable car system on Hong Kong’s Lantau Island near Po Lin
Buddhist Monastery as an example of successful stakeholder dialogue. He is referring

34
to the extensive consultation that took place before construction on the cable system
began with several groups who had an interest in the project. These groups included
the monastery itself and the bus company that has a monopoly on transportation to and
from the monastery. These stakeholders were contacted and asked to provide their
thoughts on how best to complete the project.

The article also describes Community Business (see section 2.4.3), a Hong Kong-
based non-profit that works with businesses and helps them focus on corporate
community investment and diversity, and work-life balance. The chief executive of
Community Business is Shalini Mahtani, who said that one of the biggest stumbling
blocks for CSR in Hong Kong is that people have a very limited idea of what CSR is.
She said that many Hong Kongers consider CSR nothing more than philanthropy
when, in fact, there are pressing local issues that could be solved if business owners
considered other forms of CSR. Mahtani mentioned the fact that many companies
dismiss women who become pregnant, sexually harass female employees and don’t
hire disabled workers. Rectifying these problems is not at all related to philanthropy,
so the businesses need to realize that they can and should take action to improve such
problems. The article stated:
Increasingly, companies are realising that CSR pays dividends in how it affects
a company’s reputation and bottom line. There is often a financial cost to CSR,
but this is offset by intangible benefits, such as greater company loyalty, which
in turn translate into dollars saved.
The final portion of this article describes how companies are enacting CSR programs
because doing so might get them listed on CSR-linked stock indices. Two of these

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indices are the Dow Jones Sustainability Index in the U.S., “which tracks the financial
performance of leading companies worldwide that adopt sustainable practices,” and
Britain’s FTSE4 Good Index Series, which “measures the performance of companies
that meet globally recognised corporate responsibility standards and facilitates
investment in those firms.” Said Stephen Frost, “People tend to have much longer
investments in these funds, and companies like that. It’s another stamp of prestige that
you can put on your company name, which adds that little bit to differentiate you.”

2.4.5 “Goodwill Hunting” (Rodwell, 2007)

This article appeared in the South China Morning Post six months after the
newspaper’s special CSR report. It describes how charities and NGOs have recently
been requesting more money from businesses in Hong Kong. The reason for this
increase is that after the Asian financial crisis (1997), government funding of such
groups was cut off. The Hong Kong Society for the Aged (Sage), for example, lost
HK$18 million that had previously been provided by a government grant. Sage tried
fund-raising methods such as soliciting donors and selling products to the public, but
these efforts did not bring in nearly as much money as had been lost when the
government grant was cut. The article says that Sage is now approaching businesses
for financial support, and that this is becoming common practice for NGOs:
Businesses are under pressure from their stakeholders to demonstrate a sense
of CSR and are looking for ways to give back to the community. NGOs are
happy to offer them a chance to exhibit their caring side by donating to a good
cause.

36
Diana Tsuitan, managing director for East Asia-Pacific at international NGO Mercy
Corps, says that companies prefer not to allow money donated to a charity to be used
however the charity wants. Instead, companies prefer to fund special projects that will
be publicized and garner media attention. Tsuitan said that it’s hard to get Hong Kong
companies to look beyond the public relations benefits associated with donating. But
in the West, she said, CSR had gone beyond simple philanthropy and is more about
corporate behavior than about a company’s charitable donation budget. Tsui-tan added,
“If the corporation is smart and they are giving back to the community in a strategic
way, it will help them enhance their brand building in the long run, but this is not the
traditional way that most Hong Kong companies feel comfortable to give.”

2.5 Summary of South China Morning Post Coverage

This series of South China Morning Post CSR-related articles provides useful
snapshots of the development of CSR in Hong Kong, although it is unknown exactly
how much influence the organizations discussed in the articles had over the content of
the coverage. Furthermore, these articles come exclusively from the English language
press. To maintain balance in research, numerous Chinese language sources dealing
with CSR are presented elsewhere in this thesis. When considered as a whole, the
South China Morning Post articles strongly indicate that CSR is a serious issue in
Hong Kong that commands the attention of corporate executives, NGOs and local
businesses. When considering CSR (or business in general) in Hong Kong though, it is
important to remember that this international city’s business environment is much
more mature, transparent and developed than that of mainland China. Hong Kong

37
has the benefit of long years of intense exposure to Western culture and business
practices. Therefore, Hong Kong CSR is more advanced than CSR in the rest of China.
The key points of the South China Morning Post articles are as follows:
• Gaining newspaper coverage of a corporation’s CSR efforts in Hong Kong
seems to be one way that PR firms help companies promote their CSR
programs.

• Corporations’ CSR programs are more effective when they deal with areas in
which the corporation has expertise and experience.

• CSR programs allow corporations in Hong Kong to assist the community
while also identifying possible future employees.

• CSR is already popular among MNCs in Hong Kong, and local small and mid-
sized companies are also beginning to incorporate CSR into their business
models.

• An important and widespread form of CSR among Hong Kong companies is
supply chain CSR. Since Hong Kong companies’ supply chains often extend
into mainland China, workers there can also experience the benefits of CSR.

• Stakeholder dialogue is a crucial part of formulating good CSR programs.

• More charities and NGOs in Hong Kong are under financial pressure, which
means there are more CSR opportunities for businesses.

• Some Hong Kong businesses still have not learned that there is more to CSR
than philanthropy.

• Some Hong Kong companies prefer philanthropy to other forms of CSR
because they believe that it brings them good PR benefits.

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2.6 The Standardization of CSR Guidelines in China

“Shenzhen CSR Standard: An In-depth Perspective,” an article that appeared in the
April 2006 CSR Asia newsletter (Ho, 2006), describes how CSR in China is
transitioning from a theoretical, high-minded ideal toward establishment as codes of
conduct. National labor and environmental laws already exist in China, and if
companies were to obey them, then the practice of good CSR would already be
widespread in China. Unfortunately, obedience to laws passed by the distant central
government in Beijing is often lacking among the Chinese. The creation of CSR
standards is designed to prod Chinese companies toward compliance with the laws and
provide companies with a useful yardstick against which to measure their current CSR
programs. As CSR standards such as the one in Shenzhen become widely used, the
guidelines may begin to take hold across the country and Chinese businesses will
hopefully begin moving toward obeying the existing laws. Ideally, the CSR codes will
eventually become regulations that are adhered to and, most importantly, enforced.
Regulation brings predictability to the business world and relief to Western companies
operating in China, most of which would probably prefer to operate in a fair, open
marketplace where procedures and expectations are standardized.

The Shenzhen CSR Standard article, produced by CSR Asia writer Brian Ho,
describes this trend, presenting another argument in support of the hypothesis that
CSR is gathering steam in China and thereby offering international PR firms big
opportunities. Thanks to the CCP’s very public push for Harmonious Society, Chinese
companies are now more aware of the importance of CSR than ever before. These

39
companies, however, may nonetheless avoid enacting CSR programs because doing so
can cost money, thereby reducing the companies’ profit margins. Government
standards are one way to begin pushing these companies in the direction of CSR
compliance and Harmonious Society.

Zhang Guojiu is the Deputy Director of the Wage and Welfare Department in the
Shenzhen Municipal Bureau of Labour and Social Security (SMBLSS) in the city of
Shenzhen, Guangdong Province. During an interview with Brian Ho for the
“Shenzhen CSR Standard” article, Zhang stated that the SMBLSS, in cooperation with
other related departments, has drafted a document called “Instructing Opinion on
Promoting Corporate Practicing [sic] Social Responsibility” that represents
government efforts to encourage CSR in Shenzhen. Ho writes that the guidelines are
“only an internal document intended for circulation in government circles, and [are]
not yet freely available.” Zhang himself described the scope of the document: “The
Standard is for businesses related to the Shenzhen municipal government, such as
outsourcing of government projects, merchandise for government orders, state-owned
enterprises, and so on.” The government’s plan sounds admirable enough. But Zhang
admitted that enforcement of the CSR Standard will be difficult. Much of the Standard
deals with workplace issues, such as fair wages and occupational safety. In China,
where competition is intense and profit margins can be slim (The Economist, 2006),
companies that implement the kind of government-defined CSR standards that Zhang
discusses could risk going out of business. Said Zhang, “Complying with laws and
regulations is the bottom line in CSR. However, this is a problem in Shenzhen since

40
many companies only focus on revenue and provide poor labour conditions to achieve
their goals.”

Shenzhen’s CSR Standard idea does seem like a step in the right direction toward
achieving Harmonious Society, and similar standards and codes are being enacted
throughout China. Unfortunately, most of them are like the Shenzhen standard in that
they are both voluntary and unenforceable. Another example of this trend is the
CSC9000T (China Social Compliance for Textile & Apparel Industry), a code of
conduct enacted in 2005 that targets China’s massive textile industry. The code sets
CSR guidelines that will ideally get the textile industry in line with current laws and
with achieving the goal of Harmonious Society. According to the official CSC9000T
website (RSCA, 2005):
The CSC9000T is based on Chinese laws, international conventions and
practices, as well as China’s special needs. The implementation of CSC9000T
can help to improve social responsibility management and promote a
harmonious society. Implementing the CSC9000T will [also]:

• Protect employees’ legal rights and interests, and increase employees’
motivation and productivity.

• Help business enterprises to improve management systems, especially
social responsibility management, occupational health and safety
management, and human resource management, and therefore enhance
competitiveness.

• Drive sustainable development of the textile and apparel sector in
China, uplift the sector’s international image, and guide the sector
[toward integration] into the global supply chain.

• Put the vision of “building a harmonious society” into action.

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Aside from homegrown Chinese efforts to standardize CSR, international CSR
standards such as the United Nations Global Compact (Powell, 2004) and the SA
(Social Accountability) 8000 (ECO, 2007) are also gaining acceptance in China. This
shows that the government is taking steps to put high-minded CSR ideas into practice.
But Chinese firms are more likely to act in their own best interests than lose money by
adhering to new government standards that have no teeth. “The mountains are high
and the emperor is far away” (山高皇帝远) runs an old Chinese saying. Companies,
particularly those far from Beijing, may be less than likely to stick to the national
government’s new suggestions regarding CSR.

Zhang Guojiu noted that CSR is more familiar to Chinese in big cities like Shenzhen
than to those living and doing business in the vast areas of China that lay beyond the
city limits. In remote areas, where companies need to be educated about CSR and
convinced to take action, how could international PR firms play a role? Brian Ho
writes:
Zhang said that the concept of CSR is not so well-known outside the major
cities in China. To change this, advocacy or campaigns are needed in these
places in order to educate people about the concept. Therefore, CSR promotion
such as conferences, declarations and roundtables are required. However, in
Shenzhen, since many people have heard of the concept, what the city needs to
do is to work on some grass roots and practical strategies to develop better
social responsibility amongst its companies.

Clearly, there is work to be done for those international PR firms willing to expand
their CSR practice beyond China’s major cities.

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2.7 Summary of the Standardization of CSR Guidelines in China
Brian Ho’s article and the CSC9000T show that the Chinese government is making an
effort to spread the gospel of CSR. It is unknown, however, whether Chinese
businesses will adhere to the new CSR standards. It may seem strange to Westerners
or those raised in civil society that instead of enforcing existing laws, the Chinese
government chooses to issue unenforceable CSR standards. But such is the nature of
China’s unique CSR environment. A sudden widespread crackdown on industries or
companies that don’t obey the existing laws would probably only exacerbate existing
economic and social problems. The establishment of CSR standards is a less disruptive
way for the government to push the idea that CSR is important and necessary. The
increase in CSR codes of conduct is quite an opportunity for international PR firms.
PR firms should actively seek to help Chinese businesses get their CSR programs in
line with the new guidelines through informational campaigns, organizing CSR events
and education of stakeholders.

2.8 NGOs in China

NGOs are highly relevant to the topic of CSR and international PR firms in China.
They function as a vehicle for CSR in that corporations often give NGOs money to
support the NGOs’ socially responsible work, thereby allowing the corporation to
honestly say that it is engaging in genuine CSR programs. One element of the CSR-
related work that international PR firms do in China is to connect corporate clients
with the right NGO.

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NGOs are an increasingly powerful force in China, although the exact number of them
operating in the country varies widely depending upon the source. According to the
World Bank, there were 133,000 NGOs registered in China in 2006 (World Bank,
2007). But China’s state-owned Xinhua News Agency put the number of NGOs
operating within the country in 2006 at 346,000 (Xinhua News, 2007). According to
the article that cited this figure, the number indicates an 8% increase from 2005. The
article also quoted Zhang Weilin, a Ministry of Civil Affairs official, as stating that
since September 2006, NGOs had participated in 211 projects supporting rural
development, involving a total investment of RMB$5.5 billion (US$688 million). The
article continued:
Since 1978 when China initiated the policy of reform and opening-up, the
country has witnessed a steady increase in the number of the [sic] NGOs,
which are called “civilian organizations” in Chinese officialese. Civilian
organizations have served as “helpful assistants” to the government in many
areas including poverty reduction, environmental protection, education, health
and employment.

Jiang Li, Vice Minister of Civil Affairs, said the ministry would strengthen
supervision of NGOs and map out measures this year to clean up illicit fee
collections, false reporting and corruption among them. Earlier reports said
that the ministry has started to formulate methods of evaluating the structure,
business, financial status and social influence of NGOs.

Currently, most of China’s NGOs are small and do not have a standard
operation [sic], which results in a limited role in social affairs and inadequate
trust from the public.
Considering the source of this article (Xinhua), it’s not surprising that the tone of the
piece seems to cast doubt upon the legitimacy and trustworthiness of NGOs. The CCP
is deeply suspicious and fearful of NGOs, many of which are funded by foreigners and
frequently draw attention to China’s embarrassing problems. According to an article in

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the San Francisco Chronicle (Pocha, 2006), “Beijing [is concerned] that the United
States, Europe and some wealthy individuals have been using NGOs as fronts to push
for greater democracy, and even regime change, in authoritarian states around the
world.” Nonetheless, large numbers of NGOs are permitted by the government to
operate in China. Herein lies the CCP’s dilemma. On one hand, the government wants
to maintain firm control by limiting the activities of organized groups operating in the
country. But on the other hand, NGOs are an integral part of achieving Harmonious
Society, which calls for the kind of grassroots solutions to societal problems that
NGOs provide.

Regardless of their true numbers and their problematic relationship with the CCP,
NGOs currently operate in all of China’s provinces and autonomous regions, as well
as in the four municipalities (Beijing, Tianjin, Shanghai and Chongqing). The
audiences, issues and sectors that NGOs touch upon include: child welfare, disaster
prevention and relief, education, environment, ethnic minorities, gender, health,
HIV/AIDS, labor and migration, law and rights, microfinance, elderly people, rural
and community development, sexuality and reproductive health, social policy and
economic reform, special needs/disability and volunteerism (DINGO, 2007). Some of
the more well known NGOs operating in China are: Habitat for Humanity
International, the Red Cross, the Bill and Melinda Gates Foundation, Greenpeace, the
Lion’s Club, the Special Olympics and the Salvation Army.

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2.9 What Makes Good CSR?
In China, the American and Chinese business communities are brought together by
organizations such as the American Chamber of Commerce PRC (AmCham PRC), the
U.S.-China Chamber of Commerce (USCCC) and the U.S.-China Business Council
(USCBC). These organizations operate within China, where they facilitate business
contracts, conduct seminars and conferences, organize trade missions and generate
networking opportunities. The U.S.-China Business Council’s website describes the
organization:
The United States-China Business Council, Inc. (USCBC) is a private, non-
profit, non-partisan, member-supported organization. It is the principal
organization of US corporations engaged in business relations with the
People’s Republic of China. Founded in 1973 as the National Council for US-
China Trade, USCBC originally served the early efforts of US business in
China in the absence of formal diplomatic relations between the two nations.
With the massive growth of US-China economic engagement since the end of
the 1970s, USCBC has continued to assist firms entering the field for the first
time, but increasingly the bulk of its work has served the interests and needs of
US firms with well-established commercial relationships in China.
Headquartered in Washington, DC, USCBC also serves its corporate members
from field offices in Beijing and Shanghai (USCBC Homepage, 2007).

In addition to the services and activities they provide and arrange, the American-
Chinese business organizations periodically issue reports relevant to those doing
business in China. In 2006 the USCBC released such a report, entitled “Best Practices
– Corporate Social Responsibility in China.” The USCBC website explains the origin
and development of this CSR report: “Many foreign companies are seeking to
implement or expand corporate social responsibility (CSR) programs in China. The
experiences of several leading multinational corporations (MNCs) with well-
established and effective CSR programs there provide some important best practices.”

46
The USCBC report offers valuable CSR-related information and advice. For example,
CSR programs conducted in China by MNCs are typically broken down into four
areas: community outreach, environmental protection, education, and environmental
health and safety (EHS). (USCBC, 2006) The report also suggests eight actions that
MNCs can take to ensure that their CSR programs in China are effective. These
actions are included in this thesis because they transfer quite well to the business of
international PR firms, and serve as a primer for PR firms looking to enter China’s
CSR market. The best practices cited in the report, which are imperative elements of
any CSR program, are as follows (USCBC, 2006):
1. Define clearly the goals of the CSR program and how the company will
measure success: This includes tying China-based CSR programs to the overall
CSR goals of the company’s US headquarters.

2. Weave CSR into the corporate structure by involving top executives in the
CSR programs, creating oversight committees and community outreach
councils, and establishing communication links between the managers
responsible for implementing CSR programs in China’s different cities/regions.

3. Select projects carefully: This includes ensuring that proposed CSR programs
are relative to the area in which they are enacted and also relative to the
company’s specific business.

4. Get employees involved by establishing an employee-run COC (community
outreach council) in which CSR initiatives are discussed, planned and
monitored. Also, design local CSR initiatives around the interests and concerns
of local employees. Having grown up in the area, employees are often very
familiar with the specific needs of the local community.

5. Select partners carefully: Consider partnering with national and/or
international NGOs.

6. Consider partnering with educational institutions and professors: Improving
local education is a popular theme of CSR programs conducted by MNCs in
China. Local academics can be very knowledgeable about local needs, and can
wield considerable influence in local politics and development.

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7. Relate CSR efforts to government development goals: Political support can
increase the positive effects of CSR programs. But ignoring the government’s
plans, policies and goals can stymie even the most well-meaning of CSR
programs.

8. Craft media outreach plans: Communicating the positive effects of CSR
programs is a key element in maximizing the benefits of the programs for the
company.

One important point made in the USCBC report is that MNCs should consider
partnering with NGOs that can help them conduct CSR programs. There are a plethora
of NGOs to choose from (see section 2.8), so MNCs may be inclined to seek a PR
firm’s help in selecting the best one with which to partner. According to Edelman’s
2007 Trust Barometer, 56% of Chinese respondents trust NGOs to “do what is right”
(Edelman, 2007). Furthermore, there is evidence that the reputation of NGOs in China
is improving and that people are beginning to realize that NGOs are helping to
supplement the government’s efforts to achieve Harmonious Society (Jin, 2007). If
indeed NGOs are increasingly trusted, then PR firms should consider specializing in
linking MNCs with the perfect NGO partner. It is important for MNCs to remember,
however, that dealings with PR firms take place in the unambiguous context of a
business-client relationship. Unlike NGOs, PR firms can be easily controlled and/or
fired if the business relationship doesn’t work out. NGOs, on the other hand, are not so
beholden to corporations. MNCs that are less than genuine in their CSR efforts may
find that their NGO partner has become a loose cannon that publicizes the
shortcomings of the corporation’s superficial CSR programs.

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In general, the USCBC report offers encouraging news for international PR firms
operating in China because almost all of the suggestions outlined in the report relate to
areas in which these firms’ expertise could be very useful to MNCs. For example, the
research arm of any international PR firm could provide the tools necessary to help
MNCs achieve Points #1, #3 and #5 (Define clearly the goals of the CSR program and
how the company will measure success; Select projects carefully; Select partners
carefully). PR firms would also be adept at bringing together Chinese influencers
(officials, academics, executives, etc.) and their MNC counterparts. In this way, the
PR firms could help MNCs achieve Points #5, #6 and #7 (Select partners carefully;
Consider partnering with educational institutions and professors; Relate CSR efforts to
government development goals). Point #8 (Craft media outreach plans) is a prime
candidate for PR firm involvement because media relations has always been one of the
basic services offered by the PR industry, and PR firms are generally very experienced
in this area. For all of these reasons, international PR firms operating in China should
welcome the 2006 USCBC report. If these firms are not already involved in CSR in
China, then they would be wise to recognize its potential.

2.10 The Legend of Lei Feng

The USCBC report’s seventh point, “Relate CSR efforts to government development
goals,” may very well be the most important piece of advice contained in the report.
Today, the CCP’s most important “government development goal” is Harmonious
Society, and Western companies, including PR firms, should use CSR to take
advantage of the drive for Harmonious Society. To understand one approach to

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achieving this, consider the example of Lei Feng, a legendary communist soldier
whose patriotism and selfless acts made him a paragon of Communist virtue. A vivid
description of Lei Feng is provided on a Chinese website dedicated to his life:
The Great Communist Warrior Lei Feng!
Lei Feng was a great communist warrior who devoted himself fully to serving
the people. Born in 1940 to a poor farmer’s family, he became an orphan at
seven. Despite his bitter circumstances, he developed a deep emotional
attachment to the CCP, joining the Red Army at 16. He worked extremely hard
and became a model for everyone. Lei Feng set an example of how one should
dedicate oneself fully to serving the people and fighting for communism. He
always remembered how to be a human being, living for the people while
remaining loyal to the Party, the country and communism. He studied Mao
Zedong thought diligently in order to increase his ability to serve, and his
biggest source of happiness was seeking advantages for others, never for
himself! (Gu, 2006)

Comrade Lei Feng’s deification by the CCP is clearly a PR/propaganda exercise.
And it is whispered that his life story may in fact be based upon forged pro-CCP
“journals” supposedly written by the soldier and discovered after his death.
Nonetheless, the story of Lei Feng offers a useful example of how virtuous
behavior that is in line with CCP goals can be held aloft by the Party as a model
for all Chinese to follow. Lei Feng has been invoked by the CCP many times since
his death in 1963, and March 5 is still recognized (although nowadays not widely
celebrated) as Lei Feng Day. On Lei Feng Day in 1990, in the wake of the June
1989 Tiananmen Square massacre, Jiang Zemin and other Party leaders implored
all of China to study Lei Feng and stand up for the Chinese communist way. The
relevance of Lei Feng to CSR, international PR firms and Western companies
operating in China is that good deeds that help China do not go unnoticed by the
central government. Perhaps, a corporation enacting CSR policies that effectively

50
help achieve Harmonious Society could become as widely praised as Lei Feng,
although hopefully, the merits of those policies would be more easily verifiable
than the legendary good deeds of the iconic communist soldier. A corporation that
achieved the same CCP endorsement and level of public awareness as Lei Feng
could rest assured that its long-term stability and sales figures in China were all
but guaranteed.

According to the legend, Lei Feng did good deeds silently and without the desire for
recognition. PR practitioners from international PR firms and in-house operations
should consider this example and search for ways to practice and publicize CSR in a
subtle, Lei Feng-type way. Doing so could inspire the CCP to hold up the company for
emulation by other businesses. But PR practitioners must be at the table with senior
management to encourage CSR of this kind. They ought to ask questions such as
“What are we doing for the good of society as we make our money? How are we
responding to the Party’s call? What projects can we implement that meet the social
and political expectations of the country and help achieve Harmonious Society?”

2.11 Serge Dumont & Chinese Brands Abroad
In a January 2006 press release (Omnicom Group, 2006), it was announced that Serge
Dumont had been appointed Senior Vice President of Omnicom Group Inc. (a global
marketing and communications company) and President of Omnicom Asia-Pacific.
The release also summarized Dumont’s unique background:

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Mr. Dumont is a French businessman who has worked in Asia, particularly in
China, for more than 20 years. Often referred to as the “founder of the public
relations industry in China,” he has made unique and pioneering contributions
to the industry. Mr. Dumont began his career in the communications field in
the mid-1980s by establishing a consultancy that rapidly grew into a market-
leading strategic communications firm catering to numerous Fortune 500
clients. In 1993, he sold his company to the U.S. public relations group
Edelman. Mr. Dumont joined the Edelman corporate board and was appointed
Group Executive Vice President and President, Asia. He left Edelman in 1998
and focused on personal investments and advisory assignments.

Serge Dumont is relevant to the topic of PR and CSR in China for several reasons. He
understands China’s PR industry because he has been involved with it since its nascent
stages. Furthermore, as the press release notes, “Given his unique strategic
communications background, Mr. Dumont has frequently been retained as a high-level
advisor by governments and multilateral bodies such as the World Health
Organization, the Beijing Municipal Government and the French government.”
Dumont is also an active philanthropist who has worked to fight HIV-AIDS in China
and who also established a scholarship fund for students of China’s Tsinghua
University.

At the 2005 IABC (International Association of Business Communicators) Conference
in Washington D.C., Dumont gave a presentation that serves as another powerful
argument for why CSR could catch on among large Chinese companies. Dumont’s
presentation dealt specifically with the efforts of these companies to sell their products
beyond the borders of China and make their brands internationally well known and
respected. But if Chinese companies hope to succeed abroad, they will eventually
discover that Western buyers of Chinese products (corporations and consumers) can

52
be sensitive about how foreign suppliers operate at home and whether they employ
good environmental and social practices. If Chinese companies hope to continue
selling products to the West, then they may be forced to start paying more attention to
CSR or lose business. Wal-Mart, for example, has an Ethical Standards Department
that contacts Chinese suppliers and demands that their practices fall in line with
international SA8000 standards and Wal-Mart’s own CSR standards. Wal-Mart
auditors conduct reviews of Chinese factories to determine whether they are following
the various guidelines. If a Chinese factory fails the audit, then Wal-Mart stops
ordering from that factory. The Wal-Mart standards began with rules relating to
worker safety. But since 2006, Wal-Mart has been enforcing environmental protection
standards, which indicates that the corporation’s CSR rules are getting stricter (Zhang
K., 2006).

The Chinese companies discussed in Serge Dumont’s presentation include Bird
(electronic communication devices) (Corporate Information, 2007), Galanz
(microwave ovens) (Galanz Homepage, 2007), Haier (household appliances) (Haier
Homepage, 2007), Huawei (telecom industry) (Huawei Homepage, 2007), Lenovo
(computers) (Lenovo Homepage, 2007), Little Swan (electrical appliances and
consumer products) (Wright Reports, 2007) and TCL (electronics) (Global Sources,
2007). Dumont said that these companies want to expand outside of China because
global brands are lucrative and because the PRC government supports globalization.
The Chinese companies face hurdles, however, because of problems such as limited
overseas marketing experience, foreign consumers’ fear of China and/or mistrust of

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Chinese brands, and high marketing and R&D costs (Dumont, 2005). The companies
Dumont spoke of, while well known in China, are still a long way from becoming
household names in the West. Along the road to international success, they will
probably eventually be forced to show the world that, in addition to supplying the
consumer products that the world buys, they are also using CSR to help solve China’s
pressing societal problems.

As a high-level Omnicom executive, a branding genius and an old school China hand,
Serge Dumont is in the perfect position to promote CSR among Chinese companies
and help them succeed in their international branding efforts. Omnicom owns a large
number of advertising and media companies, as well as three of the world’s largest
international PR firms: Fleishman-Hillard, Ketchum and Porter Novelli (Omnicom
Homepage, 2007). He is also dedicated to improving China through philanthropy and
other forms of CSR. With Dumont on board, Omnicom is very well situated to
facilitate – and take advantage of – the rise of CSR in China.

2.12 Dr. Jian Wang

The research and publications of Dr. Jian Wang, an assistant professor at Purdue
University, have dealt closely with public relations, integrated marketing
communications, and international advertising, media and communications. He has
worked extensively in the U.S. and China and published many books and articles
relating to communications systems in both countries. According to his online
biography:

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Prior to joining the Purdue faculty, Dr. Wang was a senior communications
specialist at McKinsey & Company. His responsibilities involved advising
clients and consultants on various aspects of developing and implementing
strong communication strategies. He served leading multinational and regional
clients on assignments across many industries. Dr. Wang has also served as a
research consultant to Ketchum Public Relations in New York City and Hong
Kong, where he carried out a wide variety of research projects for Ketchum
clients (Purdue University, 2005).

On November 14, 2006, Dr. Wang, the Corporate Communication Institute (CCI) and
the Beijing Horizon Market Research Group released a study underwritten by
Prudential Financial, Inc. that details some surprising trends in Chinese corporate
communications (Wang & Goodman, 2006). The study, “Corporate Communication
Practices and Trends: A China Benchmark Study 2006,” deals exclusively with
Chinese companies, 23 of which were interviewed for the study. The latter potions of
the study deal specifically with CSR communications in China. The author
interviewed Dr. Wang two weeks after the release of the study, so this section of the
thesis contains elements of both primary and secondary research (Wang, 2006).

2.12.1 Corporate Communication Practices and Trends: A China Benchmark Study
2006
Dr. Wang’s study touches on the following areas of Chinese corporate
communications: the importance, role and functions of corporate communication;
corporate identity and crisis communication; use of third-party vendors for corporate
communication activities; the importance and drivers of CSR; CSR focus areas and
practice; and CSR communication. Regarding the key findings, the text of the study
reads:

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Key findings from this benchmark study of corporate communication practices
and trends in Chinese companies reveal a robust growth and development of
this strategic marketing function.

1. Chinese companies focus on corporate image building, brand strategy, and
marketing and sales support.

2. Rising budgets and hiring projections indicate a healthy commitment to the
importance of corporate communication in the benchmark companies.

3. The practice of corporate communication in the Chinese companies
emphasizes tactical functions compared with the strategic emphasis of
Fortune 1000 companies; one area recognized, but underdeveloped, is a
crisis communication capability.

4. Companies use outside vendors or agencies for building corporate identity,
brand strategy, and public relations.

5. Chinese corporate communicators recognize the need to develop strong
Corporate Social Responsibility (CSR) action, now centered on disaster
relief and higher education, aspiring to develop environmental protection,
energy conservation, and workplace safety.

6. There is general agreement on the importance of corporate communication
about CSR engagement, and the internet is the preferred means to
communicate with internal and external audiences over the broadcast and
print media.

While the study’s findings are all intriguing, points #5 and #6, and the final section of
the report (dedicated specifically to CSR), are the most relevant to the topic of this
thesis. According to the research, the primary drivers of CSR among Chinese
companies are: improving corporate image/reputation, meeting customers’
expectations, and creating corporate culture and value. In contrast to research
previously described in this thesis, factors that the respondents did not consider
important drivers of CSR include making contributions to social development and
adherence to government policy and advice. But the report also states:

56
With the rapid development of Chinese enterprises, like elsewhere, Chinese
companies are becoming more and more powerful social institutions in that
country. The Chinese government and the general public now have higher
expectations of Chinese companies to not only deliver economic benefits but
also contribute to building a “harmonious society,” a concept propounded and
promoted by the current administration in China.

In the larger debate on the role of CSR in China, many Chinese companies and
executives have argued that such a role should be fulfilled by the more
successful companies, because, for most companies, they simply don’t have
enough financial resources to devote to such programs and activities… Overall,
the findings suggest that there is a clear acknowledgement of the social role
that businesses have in society (Wang & Goodman, 2006).

Dr. Wang’s research also reveals that CSR communication to both internal and
external audiences is important to the survey respondents. While the companies
definitely see value in communicating CSR programs externally, the report states that
internal communication of CSR activities is more widely supported. Dr. Wang stated
in his interview with the author that several important questions regarding CSR
communication remain unanswered. What is the best way for PR firms and
corporations to talk about CSR in China? How do they communicate their CSR
programs? What are the elements of an effective CSR program that will fit well into
corporate strategy? Whatever the answer to these questions, Dr. Wang’s research
shows that respondents prefer to use the internet to communicate CSR activities.

In his interview with the author, Dr. Wang also described some of the better known
examples of MNCs’ CSR efforts in China. Microsoft, for example, donates computers
to Chinese universities for the good of higher education. Starbucks promotes and sells
Free Trade coffee in China. GE runs extensive CSR programs in China and HP’s

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globalized CSR strategy includes China. Still though, Western corporations are unsure
of how to create the best business structure for CSR programs in China, Dr. Wang said.

2.13 Summary of Dr. Jian Wang Research

The findings of the “Corporate Communication Practices and Trends: A China
Benchmark Study 2006” research confirm that Chinese businesses consider CSR an
important part of their place in society. Other important points to glean from Dr.
Wang’s research are:
• The Chinese government and public expect business to provide economic
benefits and help to improve society. Business accepts these responsibilities,
but smaller businesses feel that larger, more successful businesses have a
greater responsibility to give back to the country.

• CSR focus areas among Chinese corporations include environmental
protection, energy conservation, disaster relief, workplace health and safety,
and support for education (primary, secondary and higher).

• The primary motives for communicating CSR are: improving corporate
image/reputation and meeting customers’ expectations.

With so much attention being paid to CSR and its connection to Harmonious Society,
it is clear that CSR is at least now on the radar of Chinese corporations. It may be
some time before substantial numbers of Chinese companies actually move to conduct
real CSR programs, but the process has at least been set in motion. For a variety of
reasons, however, Chinese companies may remain reluctant to hire international PR
firms for CSR-related services. Reasons for this will be discussed in the following
section.

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2.14 Arguments against CSR in China

Thus far, secondary research has generally supported the argument that there are great
opportunities for international PR firms to conduct CSR-related business in China.
There are, however, several powerful factors that could hinder or even derail
international PR firms’ efforts.

2.14.1 Chinese Attitudes toward Ideas and Products Imported from the West
The history of the interaction between the West and China is ancient and its starting
point is lost in the mists of time. It was probably trade (conducted along routes such as
the Silk Road) that first joined East and West. For hundreds, if not thousands, of years,
Western businesspeople traveled to China to acquire products that were highly valued
in the West, such as silk, tea and spices. In the 21
st
century, Western businesspeople
still come to China to pursue money-making ventures, and China’s labor now provides
the world with countless types of goods. Western products are widely available in
China, and items such as high-quality liquor, luxury cars and brand name clothing
from the West are widely prized as status symbols. According to a June 2004 issue of
The Economist:
In China, attitudes toward luxury have changed dramatically from just a few
years ago, when any form of ostentation was frowned upon. Today’s Chinese,
above all the young, love to flaunt their status. Claire Kent, an analyst at
Morgan Stanley, says that, whereas people in the West are buying more
discreetly branded luxury goods identifiable only by those “in the know”, the
Chinese favour prominent logos that shout, “Look, I’m rich.”

Until recently 90% of all luxury spending in China was by men. But, says
Hugues Witvoet of LVMH Investment Asia, more Chinese women are buying
brands to assert their independence and to feel good.

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Luxury-goods firms are thus becoming wildly excited about the possibilities –
in China and beyond. Armani plans to open 20-30 new stores on the mainland
by 2008. Prada will invest $40m in China in the next two years, and almost
double the number of stores there this year to 15. Louis Vuitton will open its
first full-range shop on the mainland in Shanghai in September, and will have
13 stores by year end. (The Economist, 2004)

This hunger for ostentation is, as The Economist points out, a relatively new
phenomenon. Prior to China’s opening to the world, which began in 1978 with Deng’s
announcement of China’s intention to modernize, Westerners and imported Western
products were viewed with suspicion and even contempt.

This cultural attitude is exemplified by the experience of the Macartney Embassy. In
1793, King George III of Great Britain sent a delegation to Beijing (then called Peking)
in an attempt to convince the Chinese emperor Qianlong (reigned 1736-1795) to open
up China for trade with Great Britain. The delegation, led by George Macartney, First
Earl Macartney, came bearing lavish gifts of mechanical clocks, scientific instruments
and even a hot air balloon. These gifts, which represented the most advanced
technology the West had to offer, were inteded to impress the Chinese with Western
ingenuity. The delegation was rejected, however, and King George’s hopes were
dashed when he received a letter from Qianlong that stated simply, “We have never set
much store on strange and ingenious objects, nor do we need any more of your
country’s manufactures.”

The Chinese contempt for Western products, technology and ideas was clear.
Although the West’s influence in China is widespread and obvious today, Chinese

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skepticism toward newfangled Western imports remains significant. This skepticism
could carry over to ideas such as CSR and civil society, which Chinese might view as
yet more “strange and ingenious” Western imports that China can certainly live
without.

Like CSR and civil society, corporate public relations is not a Chinese invention. PR,
as international PR firms view it, is not widely understood in China, where there are
widespread misconceptions about the industry. The work of female PR practitioners,
sometimes referred to as huaping (花瓶; flower vase), is considered to consist mainly
of attending events, looking pretty and entertaining businessmen through flirtation and
scintillating conversation. The book “Multinational Corporations’ Public Relations in
China” sums up some of the other prevailing views of PR among Chinese:
It must be noted that in China misunderstandings about public relations exist
on a quite wide scale. For instance, some people perceive public relations as
being equivalent to efforts [to] manipulate and exploit social connections to
receive special treatment. For others, public relations just consists of social
activities centered on social butterflies. Public relations can also be regarded as
being in the same league as advertising that promotes products. With respect to
what public relations can do, a large number of people in the business sector
simply vest too much hope in public relations’ ultimate power, thinking that
public relations is a panacea to an enterprise’s problems.

The wide existence of those improperly formed perceptions of public relations
in the Chinese society challenges corporate practitioners in at least two ways.
First, the popular belief in the negative facets of public relations tends to make
corporate practitioners’ [efforts to] relate their company to its external
constituencies harder. Second, given the misunderstandings about public
relations, it becomes quite likely that non-public relations individuals involved
in a company’s public relations situations have unrealistic and inappropriate
expectations about how corporate practitioners’ work should be done and what
results they should deliver (Liu X., 2006).

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Without a strong understanding of what PR entails, and what it can and cannot
accomplish, Chinese publics may have little respect for the industry. And as a
Western import, PR could also suffer due to a kind of cultural arrogance that
disparages “strange and ingenious” ideas from outside of China. Much like their
counterparts in the West, the Chinese masses need opportunities to learn more
about PR – and CSR as well – before they can be expected to respect it.

2.14.2 Aversion to Self-Aggrandizement
No treatise on public relations or CSR in China would be complete without mention of
Chinese people’s aversion to self-aggrandizement. This well-known cultural trait
precludes loud trumpeting of one’s generosity, philanthropy or other good deeds.
Western companies, rightfully concerned with their bottom line, often consider CSR
an investment. Their logic dictates that if consumers are made aware of a
corporation’s good CSR activities, the consumers will have more respect for the
corporation and, in turn, buy more of the corporation’s products, thereby increasing
profits. Chinese companies, however, are traditionally less concerned with reputation
and certainly averse to loudly publicizing their companies’ good deeds. To do so
would be a loss of face and a violation of strict, ancient Chinese social and ethical
codes. For this reason, it would be difficult for PR firms to get as much promotional
mileage out of Chinese corporate CSR programs than would be the case for Western
corporations running CSR programs in China. In order to succeed in China’s unique
CSR envirnment, international PR firms must offer a diverse, advanced selection of
CSR services far beyond mere promtion of CSR efforts. The Stephen Frost interview

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in the Primary Research section of this thesis (section 3.3) deals more with the issue of
Chinese aversion to self-aggrandizement.

2.14.3 CSR is Nothing but Corporate Smoke and Mirrors
Despite the lofty CSR ideals often posited by CEOs, corporate websites and at press
conferences, there are many people who view CSR (and the PR industry in particular)
with a very critical eye. Their viewpoint coincides with that of author, legal scholar
and University of British Columbia law professor Joel Bakan, who famously wrote
that “Corporate social responsibility is an oxymoron...as is the related notion that
corporations can...be relied upon to promote the public interest” (Bakan, 2004).

The Center for Media and Democracy-PR Watch (PRwatch Homepage, 2007) and
Corporate Watch (Corporate Watch Homepage, 2007) are two websites that look
doubtfully upon CSR and PR. These sites meticulously log the transgressions of
corporations and PR agencies, and archive their long history of deceit and
skullduggery. Amidst their numerous and in-depth reports on the ethical shortcomings
of corporations and PR agencies, a valid point is made: CSR is often used by
corporations and PR practitioners as a tool to manufacture positive public perception
of a company whose activities are anything by socially responsible. This is a valid
point. Without real substance, the promise of CSR becomes a tragic blasphemy; a
betrayal of stakeholders’ trust, the environment, and traditional media values such as
honesty and lack of bias. CSR is good business, especially in the 21
st
century, but
ethics demand that CSR programs be genuine. Luckily, in today’s wired world of the

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internet and 24-hour news, corporate dishonesty is often revealed despite the utmost
efforts to conceal it. Hopefully, this vigilance will continue.

Other negative views of CSR come not from those outside of corporations and the
business world, but from within. One common argument is that business’ primary
purpose is to make money by always acting in the interests of shareholders. The
interests of other stakeholders, such as employees and suppliers, are also meant to be
looked after, but only in the interests of generating more profit. The January 22, 2005
issue of The Economist includes a series of articles that highlight the business
community’s attitudes toward CSR. Several of the articles describe the benefits of
CSR programs, but much of the coverage is given over to poking holes in the CSR
movement, which was at that time just becoming mainstream in the U.S. Various
arguments that discredit CSR are presented, among them that corporations, by their
very existence, do enough to help society by providing jobs, products and profits
(Crook, 2005, Capitalism and Ethics). Another article laments the plummeting
reputation of capitalism, an institution that is often attacked by proponents of CSR.
The author reminds readers that capitalism is largely responsible for many of the
blessings that the masses take for granted today: a high living standard; abundant
education and entertainment; improved health, economic and social progress; and
more opportunities to travel (Crook, 2005, World According to CSR). But the idea
that CSR is nothing but corporate smoke and mirrors is best summed up in the article
“The Good Company” (The Economist, 2005):

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CSR was always intended to be more about how companies conduct
themselves in relation to “stakeholders” (such as workers, consumers, the
broader society in which firms operate and, as is often argued, future
generations) than about straightforward gifts to charity. Seen that way,
donations, large or small, are not the main thing.

Setting gifts aside, then, what about the many other CSR initiatives and
activities undertaken by big multinational companies? Many of these are
expressly intended to help profits as well as do good. It is unclear whether this
kind of CSR quite counts. Some regard it as “win-win”, and something to
celebrate; others view it as a sham, the same old tainted profit motive
masquerading as altruism. And, even to the most innocent observer, plenty of
CSR policies smack of tokenism and political correctness more than of a
genuine concern to “give back to the community”, as the Giving List puts it. Is
CSR then mostly for show?

It is hazardous to generalise, because CSR takes many different forms and is
driven by many different motives. But the short answer must be yes: for most
companies, CSR does not go very deep. There are many interesting
exceptions—companies that have modelled themselves in ways different from
the norm; quite often, particular practices that work well enough in business
terms to be genuinely embraced; charitable endeavours that happen to be doing
real good, and on a meaningful scale. But for most conventionally organised
public companies—which means almost all of the big ones—CSR is little
more than a cosmetic treatment. The human face that CSR applies to
capitalism goes on each morning, gets increasingly smeared by day and washes
off at night.

Under pressure, big multinationals ask their critics to judge them by CSR
criteria, and then, as the critics charge, mostly fail to follow through. Their
efforts may be enough to convince the public that what they see is pretty, and
in many cases this may be all they are ever intended to achieve. But by and
large CSR is at best a gloss on capitalism, not the deep systemic reform that its
champions deem desirable.

Pessimistic views of CSR may have been reversed somewhat in the years since the
above-mentioned articles appeared. But as the work of the Corporate Watch and
Center for Media and Democracy websites indicate, suspicion of corporations and
CSR by Westerners themselves is still widespread. PR firms, probably just as

65
distrusted as corporations, might find it very difficult to reverse this viewpoint among
Western audiences.

2.14.4 Mind Your Own Business!
Let every man sweep the snow from before his own door, and not trouble
himself about the frost on his neighbor’s tiles. (各人自扫门前雪, 勿管他人瓦
上霜), Ancient Chinese saying

As the above aphorism exemplifies, there is a certain practical attitude in China that
one must first look after one’s own before helping to meet the needs of others. Simply
put, there has never been a strong, widespread movement in China to watch out for
people one does not know, or care for things that do not explicitly belong to oneself
(such as the environment). This viewpoint is understandable, considering China’s long,
turbulent history of war, famine and disease. Through centuries and millennia of
upheaval and tenuous existence, the idea of first looking out for one’s own family and
friends became ingrained. Today, surviving from one day to the next in a harsh world
is still the primary goal of millions of Chinese.

For this reason, it could be hard to instill in the Chinese the viewpoint that spending
money to do good for others or the environment can really pay off. The best way to
increase CSR among Chinese companies is to show them that by funding, maintaining
and publicizing good CSR programs, they can actually profit in the long run. This,
however, begs the question of whether or not Chinese publics will be swayed by
companies’ CSR programs.

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There are myriad areas in which MNCs and Chinese corporate CSR efforts are helping
to improve China, but there is still a long way to go. Unfortunately, although China
has many pressing problems, the Chinese government does not appreciate those who
make such problems public. Politics is always an issue for corporations, NGOs,
individuals or organizations local and foreign. Those who enact CSR programs must
walk a fine line between meeting the needs of stakeholders and the expectations of the
government.

2.15 Summary of Secondary Research
The sum of the secondary research indicates that CSR is an increasingly common and
important part of doing business in China, for native and foreign actors. There are,
however, still major hurdles to overcome before CSR can fulfill the promise of solving
China’s many problems and improving the lives of average Chinese. China represents
a major market for international PR firms interested in conducting CSR
communication and performing CSR-related research, events and programs. The
CCP’s drive for Harmonious Society represents a major opportunity for international
PR firms able to align their clients’ CSR programs with the government’s goals.
However, there is not yet wide appreciation for international PR firms’ CSR services
among Chinese companies. For now, it seems that Western MNCs will form the vast
majority of PR firms’ clientele in the CSR arena.

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CHAPTER THREE: Primary Research

3.1 Dr. Deng Xinxin Interview

Dr. Deng Xinxin is a professor and the Director of the Department of Communication
at the Communication University of China in Beijing. His MA and Ph.D are both in
Communications, and he also has a law degree. Dr. Deng’s career has included stints
as a writer and editor at China News Publishing, China News Service and Huasheng, a
Chinese newspaper reporting international news. His research covers the fields of
communications, and internet and broadcast journalism. He has written and translated
many academic articles and published his own research papers in China and abroad.
He is also a trustee of the Beijing Internet Media Association (Li, 2007).

Throughout the 2006-2007 school year, Dr. Deng has been a visiting scholar at the
University of Southern California’s Annenberg School for Communication. As a
journalist and an academic whose work has dealt closely with Chinese media, Dr.
Deng is an informed source with extensive knowledge of Harmonious Society, public
relations, corporate responsibility and business’ role in solving China’s societal
problems. He shared his thoughts on these topics with the author during a face-to-face
interview in January 2007 (Deng, 2007). In the interview, Dr. Deng and the author
discuss two viewpoints of social responsibility represented by a pair of Chinese
phrases. These phrases have already been introduced earlier in this thesis, but for the
reader’s convenience and reference, they are translated again here: “尊敬他人会为你
赢得广泛的认可, 并促进你的经营” (“Treating people with respect will gain one

68
wide respect and improve the business”) and “各人自扫门前雪, 勿管他人瓦上霜”
(“Let every man sweep the snow from before his own door, and not trouble himself
about the frost on his neighbor’s tiles”).

In your opinion, what is Harmonious Society?

I think that in China the term, the concept, is well known from the media. It
was put forward by the top leaders of China, so almost everybody knows the
term. What’s the definition? What does it mean? I think that is quite
complicated because different people have different interpretations of this
concept. But why the emphasis on this concept, this term?

I think it’s because Chinese society is changing rapidly. Deng Xiaoping said in
a speech almost 15 years ago when he traveled to southern China, “Let some
people become rich first. And the rest will follow.” The idea was for a group of
people to become rich first and then give something back to the society to help
the rest. That’s the kind of idea he had in his mind.

That means that a certain social gap is allowed to exist. You cannot get rich
overnight, so once a group of people become better off, then the other group of
people can also eventually have a better life. It’s kind of a step-by-step
approach. But I think that in the past 10 or 15 years, the society has changed a
great deal. Some people, a small group of people, have become extremely rich
while the rest, the majority, have not improved significantly. So there is a
social gap in many areas in terms of access to information, access to education,
even access to basic needs like food and housing.

A lot of the SOE employees were laid off. Their jobs were guaranteed in the
past; but not anymore. Today the government simply doesn’t have enough
money to raise the living standard of all these people. There are still a lot of
poor people in the rural areas. And now there’s a new problem facing the
government: They have to help urban residents who have lost their guaranteed
jobs. These people still have family, young kids to care for.

Is Harmonious Society the government’s plan or idea for a way to help all those
people?
Yes, Harmonious Society tries to address those problems. Despite the reforms
that are happening, there are still problems, so the government is trying to
narrow the gap between the rich and the poor and also trying to not widen the

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gap. So, for example, since last year, farmers don’t need to pay tax and their
kids don’t have to pay for textbooks.

There aren’t many primary schools in the rural areas, so farmers’ kids might
have to travel 10 miles to get to school. For very young kids it’s almost
impossible to receive an education without a school bus. The government is
trying to mobilize the society to pay more attention to this kind of social
problem, which has arisen only in recent years.

What role do you think business or corporations will play in raising the living
standard and helping to achieve Harmonious Society?
It’s difficult to say. I’m not very familiar with Western corporations. In the
past, China had a planned economy. Almost all of the enterprises were owned
by the state. At the top of each enterprise was a government official, so the
SOEs were not independent. The officials acted according to government
orders, so they weren’t responsible for losses or gains. Thus, they never
thought about giving anything back to society from the enterprises. They
couldn’t make this type of decision because they didn’t have the freedom to do
so. If the government wanted the enterprises to contribute something to the
local community, the government would give them an order and they would
act accordingly.

If you are an independent enterprise or a corporation, however, you will try
your best to make money. Then you will think about public relations as a way
to communicate with the people around you, the local community that you
operate within and local groups of people.

When Chinese companies want to give something back to the people, do they usually
focus on the local people? If a company wants to do philanthropy or build a school,
for example, do they usually do that in their local area only?
I think it depends. I think the government put Harmonious Society on the table
to try and mobilize social forces to address the problems China is facing. And I
think they could ask or encourage corporations or enterprises to give
something to society. I think that to build a local school or give local
communities some support is something that is more and more getting people’s
attention. But state-owned companies, which in many areas are still
monopolies, like China Telecom, give a lot of money to build, for example,
100 primary schools in ten provinces or in western China. I think that with the
coordination of the central government, the state council or the provincial
government, such programs could be successful.

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Is there a long history in China of corporations doing things like that for people?

No. As I said, until recently we didn’t have corporations. We just had
enterprises or firms that were part of the government and that contributed to
the local government’s revenue. The heads of these enterprises were also
appointed by the central government.

I know that SOEs were the dominant business model for much of the second half of the
20
th
century, during the communist era from 1949 on. But what about 100, 200 or 500
years ago in China? Was there a tradition of companies giving anything back to
people?
We didn’t have companies at that time.

How about businesspeople?

The business community in Chinese history was always very weak in terms of
their social status and political power.

They were persecuted sometimes too, right?

Yeah. Business was looked down upon by Chinese people traditionally
because everyone thought, “You need to be a scholar. You need to be an
intellectual. You need to be an official. Or, you need to be a landlord.”
Landlords were supposed to treat their farmers kindly. This sort of thing was
encouraged, but people were not encouraged to be businessmen, who were
very much suppressed by social forces.

I know that in southern China successful businessmen would sometimes return home
and make philanthropic gifts to their hometowns.
Overseas Chinese. Yeah, they still do.

Is that an old tradition?

Yes. I think it’s a very unique Chinese tradition that exists among overseas
Chinese who have gone abroad and gotten money.

What kinds of good things do such businesspeople do in China? Obviously they might
build a school, but what other CSR-type activities might they try?

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Open a business to employ local people. That’s a way to give back by giving
your neighbors jobs. That’s a way to give something back to your hometown,
your motherland, your fatherland, or whatever you want to call it. This is a
tradition that’s very strong in Chinese culture. I think that in Chinese culture,
one thing is very important: You need to remember that you are Chinese, that
you were supported, that you were raised by Chinese, by this piece of land.
You owe them something. I think that after China opened to the outside, many
overseas Chinese went to Taiwan, Hong Kong or came into the mainland, and
they invested a lot of money.

When did that begin?

In the 1980s after China opened up. Before that it was impossible. But after
that China tried to attract foreign investment. I think the majority of investment
came from the overseas Chinese. Even the people from Taiwan who went to
the U.S., got degrees, worked there and earned lots of money eventually came
back to the mainland. They invested a lot in southern China, which is why the
economy in the southern belt along the coast – Guangdong, Zhejiang, Jiangsu
and other such areas and provinces – developed very fast. This represents a
kind of a relationship, a kind of history and cultural background. It’s a “mind-
heart link” to that piece of land. This kind of thing we seldom find in other
cultures and this kind of Chinese cultural phenomenon is difficult to interpret.

I want to show you a quotation. I’m curious if you’ve ever seen it before: 尊敬他人会
为你赢得广泛的认可, 并促进你的经营 . To me this quotation represents the concept
of helping and giving back to the community. What do you think of this quote?
I think it’s quite common – the concept – not the wording. Dr. Sun Yat Sen
said “人人为我, 我为人人,” which means that you do everything you can for
others, and when in need, others will help you. Not in exchange, but as part of
the role you must play in society. Everyone tries to help others, help to
contribute to the society and determine what kind of society it will be. Very
close to “harmonious,” isn’t it?

It is! It’s very harmonious. I think that in China a lot of people have that idea.

Yeah, it’s a kind of tradition.

But it comes up against this idea – 各人自扫门前雪, 勿管他人瓦上霜 – which is sort
of the opposite viewpoint, right?
They’re in different contexts.

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What’s the context of this one: 各人自扫门前雪, 勿管他人瓦上霜?

That is very much a pragmatic viewpoint. 尊敬他人会为你赢得广泛的认可,
并促进你的经营 is on a moral level. Everyone should behave like that and do
things for others.

And 各人自扫门前雪, 勿管他人瓦上霜 is more on a practical level.

尊敬他人会为你赢得广泛的认可, 并促进你的经营 means you don’t expect
anything in return for good deeds. But when everybody plays his or her role,
you will get help when you are in trouble or in need. In the history of China,
there have been lots of problems: war, famine, earthquakes, floods, etc. There
was no law and order for long periods of time. So you try to protect yourself,
you see? It was better to do less because it wasn’t any of your business.

Difficult circumstances lead to this kind of thinking (各人自扫门前雪, 勿管他
人瓦上霜). In certain cases we just have to be careful. It doesn’t mean we
should be more selfish, but you need to be careful because society is
complicated and things are not always as simple as we would think. Not
everybody is a saint. There are always evil people who might try to take
advantage of our kindness.

In China today there are some big problems. People are hungry, the gap between the
rich and the poor, law and order, corruption and all those things. Do you think that
Harmonious Society and companies giving back to the community can help solve
China’s problems?
I think it does have a role. If the corporations give something back to the
society, that’s good. But the thing is, the corporation has to be an independent
decision maker. For the state-owned enterprises it doesn’t make much sense.

Why not? Why is that important?

Because they cannot make decisions on their own. They have to follow the
official orders or government department, like China Telecom. They gave
RMB$1 billion to the western provinces. It’s not like Forbes, Microsoft or Bill
Gates will say, “I’ll give $10 billion to these poor areas, to these people.” For
large state-owned industries, the decision is made for them. The head of China
Telecom still needs to write a report to the state council because it’s not a
corporation. It’s a state fund.

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How about Western corporations that operate in China? They have a lot of money to
donate and they have a big interest in improving their public relations. Maybe part of
the answer is for the big Western corporations, not the state-owned enterprises, to
provide the money.
I think they are giving. They make money and they want to build up a good
image so they want to do something for the local communities to strengthen
their relations with customers or potential customers and also with the society.
They give to Chinese communities because they are operating within China, so
they need to build up a good image and be seen as good Chinese citizens
without green cards, without Chinese citizenship. But I think a good company
with a long-term vision needs to behave and try to be a good citizen. I think
that’s what PR is all about: Give something back by participating in something
like social welfare, projects, helping young kids, promoting cultural exchanges,
sports exchanges and things like that.

It’s my theory that the Chinese government is encouraging Western corporations to
donate and enact corporate social responsibility programs because if corporations do
that, it helps achieve Harmonious Society. Part of achieving Harmonious Society is
having someone pay for it and put the money in.
The problem is that the society has problems that cannot be solved only by the
government or only by the people themselves. The government needs to
mobilize many different elements to address its issues. Definitely the Western
corporations and foreign investors or foreign operators in China do have a role
to play. But my belief is that we also need to encourage Chinese companies to
do the same. The problem is that the heads of these companies are not
capitalists. The heads of the largest companies are government officials,
ranking officials, so they have to report what they are doing. They don’t own
the companies. They are just executives, so they cannot decide.
The government is “the owner of the owner” and is the representative of the
people. The government is the owner of the state-owned enterprises, the state-
owned corporations. These are the biggest Chinese companies. China still has
some privately owned enterprises, but that sector is still growing and still
developing. State-owned industries include telecom, oil, flight/airplane
companies, shipping, gas and water. All are state owned. And of course, the
media is a monopoly.

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Can you give an example of a successful Chinese CSR program?

Xiwang Gongcheng (希望工程): the Hope Project. This program supports little
kids by providing schools and education. People donate money to the Hope
Project, which is a fund that anyone can contribute to. The money is used to
support kids in poor areas so they can go to school, or the money is used to
build schools, provide textbooks and buy computers or even the tables and
chairs for the school.

Do donations come mostly from Chinese or foreign contributors?

Everyone can donate. It’s a foundation that does work all over China. This
program was initiated by the government. A company can donate money, for
instance, RMB$10 million or $100 million or $500,000. Or an individual can
donate. The person gives to the foundation and then he can say, “I want you to
use this money to support kids in the Xinjiang Autonomous Region.” This
program was not initiated by Microsoft or China Telecom. China Telecom or
Microsoft can give money to the foundation. They can coordinate with the
foundation to meet the organization’s expectations. But companies did not start
the Hope Project.

How old is the Hope School Project?

10 or 15 years old. This kind of thing is needed to support operations of
foreign investors or even from individuals, like me. If I want to donate
RMB$500 a year to support, for instance, three kids, the Hope Project gives
me their names and addresses. I can keep contact with the kids by post. I don’t
think you can contact them by email because they don’t have computers. You
can also travel to the village to see the kids you support.

It’s interesting that the government started this project.

In China, traditionally, the government has always been a super big player in
the society, in almost everything. Before China opened to the outside,
everything was taken care of by the government. Monthly passes for
transportation, for example, were given to everyone by the government. It was
a benefit that was part of your salary. But now things have changed. You’ve
got a sort of freedom, but you need to take care of yourself and do a lot of
things for yourself. But some people who, for example, have poor health or not
enough money, or aren’t well educated, have a difficult time. I think that
Harmonious Society is a sign that the government has noticed this and has
decided, “We need to step in.”
We have to do something and we need to not rely on the government. But the
government lets everyone in the society know and raises their awareness of
these kinds of problems. They’re trying to solve the problems, and I think

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that’s positive. But the most difficult part of achieving Harmonious Society is
the structure.

When you say “the structure,” do you mean how to distribute resources fairly? How
to make sure that everybody reaps the benefits?
I think that those are the results. What I mean is that the basis for really making
the society operate in a positive way is its structure. This includes the
government, the people’s relations with the government and the election of
government officials. How to monitor the rules and laws, and also moral
standards? What kind of a code of conduct exists for the government and for
ordinary people? How should corporations behave for the benefit of the society?

What can corporations do to give back?

Whatever they can do, they should do. They need to try their best to do what’s
good for society and also good for their own interests. This is part of raising
people’s standards. We instantly will think about our own interests: “I need
some clothes. I need some food, tonight. I need to have a nice house to live in.”
Everybody is selfish to some extent. That’s a basic of economics.

It goes back to 尊敬他人会为你赢得广泛的认可, 并促进你的经营. To make
people generous, you need to educate them. You need to raise their moral
standards. That’s quite difficult. People will say “Everyone is selfish to some
extent.” But you cannot say, “Everybody is selfish.” Everybody is generous, if
they are at all able to do so. I think changing this attitude is difficult. That’s
why we Chinese have so many sayings and terms and idioms, many from
Confucius, to try to teach people to behave that way.

3.2 Summary of Dr. Deng Xinxin Interview

The views expressed by Dr. Deng in this interview with the author can be summarized
in four main points:
• Most of China’s largest industries are still state-controlled entities run by CCP
officials who are not free to make independent decisions about spending
money on CSR programs. Dr. Deng feels that independence is necessary for
leaders of such large organizations to make meaningful decisions about
enacting CSR programs.
• Western MNCs do have a role to play in contributing to solving China’s
problems, but Chinese companies need to play a larger a role.

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• The Hope Project is a successful government-run CSR program in China that
MNCs and Chinese companies contribute to. The Hope Project offers MNCs
the opportunity to work hand-in-hand with the Chinese government on a large-
scale social responsibility project.

• To achieve Harmonious Society, Chinese people’s thinking must be adjusted.
Moral standards must be raised and citizens must adhere to the Chinese moral
ideal of helping others without expecting anything in return.

3.3 Dr. Stephen Frost & CSR Asia

CSR Asia is an Asia-based NGO dedicated to disseminating news about the
development and practice of CSR throughout Asia. According to its website:
CSR Asia is a social enterprise that strives to be the leading provider of
information about corporate social responsibility (CSR) in the Asia-Pacific
region. Through our two main offices in Hong Kong and Singapore, CSR Asia
builds capacity in companies and their supply chains to promote awareness of
CSR in order to advance sustainable development across the region. In
association with its partners it publishes reports, provides training and
education on CSR issues, facilitates stakeholder dialogue, and undertakes
contract research and advisory services (CSR Asia, 2006, 3 Day Academy).

On the first Wednesday of nearly every month in Hong Kong, CSR Asia holds a “CSR
Wednesday” event that features speakers and discussion of CSR-related topics. CSR
Wednesdays are open to the public and usually attract a variety of people from the
Hong Kong business community. The organization also hosts, sponsors and/or
monitors CSR-related training courses, conferences, seminars and events throughout
Asia. Some fairly recent examples of such events include:
• The CSR Challenge – Where does Hong Kong Stand? (July 4, 2006 in Hong
Kong). Presented by Fleishman Hillard-Hong Kong and marketing research
firm TNS, this event was attended by executives from Hong Kong’s local and
international business communities. CSR Asia’s Stephen Frost moderated a
discussion by three distinguished panelists of a recent CSR-related study
conducted by TNS (CSR in Hong Kong, 2006, HK Challenge Addressed).

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• Risky Business – Corporate Governance in Asia (September 25-26, 2006 in
Hong Kong). CSR Asia organized this event, which featured 11 keynote
speakers. According to an online description of the event: “CSR Asia’s latest
conference tackles the links between good corporate governance and corporate
social responsibility (CSR). It emphasizes the need to have good governance
policies and procedures in place as part of CSR. We will focus on the role of
governance tools in mitigating risks associated with issues such as bribery,
corruption and fraud. It will also be argued that good governance is integral to
managing risks associated with the environment, human rights and labour
standards. Many of these risks are now the subject of litigation. Asian values
and perspectives on governance will be considered as a way to promote good
governance in the region. But where they are used as an excuse not to engage,
this must also be tackled” (CSR Asia, 2006, Risky Business?).

• 3 Day Advanced Training on CSR (January 10-12, 2007 in Hong Kong). The
course leaders of this CSR Asia training course were Richard Welford, Erin
Lyon and Stephen Frost. According to the online summary: “This 3-day
intensive training course is aimed at CSR, Sustainability managers, NGOs
interested in engaging the business sector, representatives of business
associations, consultants and anyone interested in learning about corporate
responsibility best practices. Concepts like image and brand enhancement and
risk management will be introduced. Case studies will also be used in the
training course to demonstrate the linkage between CSR and good business”
(CSR Asia, 2006, 3 Day Academy).

• China Environmental Management Conference (March 7-8, 2007 in Shanghai).
CSR Asia is a media partner for this event, which featured keynote speakers
from DuPont, 3M Asia Pacific Ltd., Johnson & Johnson and Sinotec. Key
topics included: China’s evolving environmental framework; Encouraging
clean production in China and promoting sustainable development;
Benchmarking waste management practices in exploration and production;
Optimizing EMS to improve environmental performance and create values;
Defining and measuring corporate social responsibilities and sustainable
development; and effectively and efficiently dealing with environmental crisis
and emergence in order to minimize environmental pollution and operating
costs (Avail Corporation, 2006).

CSR Asia’s website (CSR Asia Homepage, 2006) provides a wealth of information
relating to the organization’s eponymous topic of interest. Dr. Stephen Frost, whom
the author met during a summer 2006 internship with Fleishman Hillard-Hong Kong,
is the director and co-founder of CSR Asia and a frequent contributor to the content of

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the website. Frost is a true China expert and a knowledgeable, experienced authority
on the subject of CSR in Asia. In a phone interview, he spoke with the author about
the current state of CSR in China and offered many interesting insights (Frost, 2006).
Selected sections of the interview are presented here.

From my research thus far, it seems that CSR is becoming more and more popular
with Western firms that are operating in China and also with Chinese companies
themselves. How are the international PR firms, like Fleishman-Hillard, Hill &
Knowlton, Ogilvy and Edelman driving or affecting the development of CSR in China?
I think there are a couple of ways. One is that all of the companies you
mentioned we’ve had some contact with over CSR. And each one of those
companies, from my understanding, is getting more and more requests from
their big Western clients about what sorts of things they could be doing for
CSR-related activities in China. So I think those clients of those companies
that you mentioned have put communications and PR strategies into the hands
of the Fleishman-Hillards of the world and are now also asking them to advise
on communications strategies around CSR. So all of those PR companies have
got much more interested in CSR. We’re seeing, in our public training, we’ve
seen in just about every single one we’ve had some members of a PR or
communications firm coming along to get more up to speed on CSR. So I think
they’re being requested a lot more about CSR, so they’re driving what happens
because of the advice they’re giving.

The second thing is that I think just about each one of the firms that you
mentioned, and several others, are conducting some sort of research on CSR
and putting that research into the public arena. You were involved in
something that Fleishman-Hillard did here in Hong Kong (Note: Frost is
referring to the July 4, 2006 “The CSR Challenge: Where Does Hong Kong
Stand?” event, which is discussed later in the primary research section). I
think most other large communications firms are doing the same sort of thing
and I think that has an influence on what happens as well.

What are some of the big CSR success stories in which these firms have been involved,
the international PR firms I mentioned? What are one or two examples of how they

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played a part in a successful CSR program, or maybe you could even talk about some
of their failures, because I know that they’re not all good.
A lot of these firms don’t talk a lot about their failures. But we’ve been
involved with a couple of companies, with, thinking of, what’s their
name…Ketchum? Yes. We’re involved with Ketchum with one of their big
clients; a logistics company. And they helped that company devise a CSR
strategy in terms of volunteer and community work. But, I’ve got to say, let me
backtrack a bit.

My feeling of what the PR and communications companies are doing is still
fairly much, PR and the kinds of CSR work they get involved with tends to be
of two sorts. One sort is trying to hitch companies up with civil society
organizations in China. So they’re a bit like a dating agency. The second thing
that they’re doing is assisting with fairly high-profile CSR-type events. It was
Ketchum, I think, that was involved with Ronald McDonald House relief stuff
in China just a month or so ago. They brought over Sarah Ferguson, the
Duchess of York, for when McDonalds launched a Ronald McDonald House
in China. Although firms like Apco are doing a bit of this, I don’t see much
evidence that they are really doing the really heavy duty strategizing at the top
of the companies on their CSR programs out here.

I think the big success stories have been around community initiatives and
community investment, that kind of thing. I think that has an influence because
from a bit of a critical perspective, I think that not all, but a lot of the PR firms,
are driving CSR into a fairly narrow sphere of that community investment,
involvement with and working with NGOs and civil society on the ground. As
you know, CSR consists of a much broader set of topics than that. Not that all
companies do that. One of the conversations we’ve been having in Hong Kong
has really been about how some of the PR firms are driving CSR in a particular
direction.

Do those international PR firms ever help mainland companies or do they focus
exclusively on the Western, multi-national corporations that are operating within
China?
I can’t think of an example off the top of my head where any of those big firms
has really worked at a significant level with a mainland firm.

Do you see the growth in CSR in the mainland firms as separate from the whole
Western PR firm scene?

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Yeah, I do. We’ve worked with some of the mainland companies who are
starting on CSR. I think there are a couple of things there. One is that mainland
companies just by and large are very hesitant about spending money on any
external consultancy or, you know, work like that. They’re very much in-house,
do-it-themselves kinds of firms. Even the big ones that have released CSR
reports seem to have done so completely from internal drivers. They don’t
seem to have got any external, certainly none of the big PR firm, assistance
whatsoever. But I think what’s driving, what the difference between CSR in
Chinese companies and big Western companies is that CSR in Chinese
companies is to a large extent driven by the whole government’s talk about
Harmonious Society and the role that business should play in developing
Harmonious Society, which fits very neatly into a sort of CSR package.

Is the Chinese government really pushing the message right now that business should
be a part of Harmonious Society?
Yes. I was at a very big official CSR event in Shenzhen about a month ago.
They had very senior guys from the party, from Beijing. They had the mayor
of Shenzhen, who’s one of the most powerful mayors in China, a very
powerful political figure. And they mentioned to us over and over and over
again, “CSR is important and business’ role in national development and
Harmonious Society is crucial.”

So despite the drive for profits that seems to have overtaken China these last five or
ten years, there is still a drive to bring together government, the good of the people
and business. All that stuff is being rolled into one.
Absolutely. It’s a very different message than plans or reforms. I mean, the
whole state-owned enterprise system, which was cradle to the grave welfare,
was sort of CSR gone crazy, right? That’s gone now. That’s gone. And profit
making is the motive for all private firms in China, obviously. But the
government sees a widening gap between rich and poor. They see growing
social unrest amongst those who are not sharing in the benefits of economic
growth, particularly rural inhabitants and migrant workers in the cities. And
you know, there have been a lot of protests and a lot of unrest in China over
the last five years. The government realizes it cannot keep a lid on that protest
by itself. And it’s really calling on business to: ensure that workplaces are fair;
wages are fair; businesses are obeying the law; businesses are paying tax on
time; all those sort of CSR-type messages. And they’re calling on CSR.
They’re also talking about Harmonious Society, which has become the most
overused phrase in Chinese public speeches in the last 18 months. You cannot
have an official speech without mentioning Harmonious Society.

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So the government really makes a point of bringing up that term?

Yes. And it’s all linked back to “business has a role in national economic
development, national social development, and national political
development.” Those three areas are articulated very clearly in any speeches of
this nature. And that’s why I think you’re not getting the big Western PR firms
involved in CSR decision-making, strategizing, or even communications
messages from the big Chinese companies because most of their drivers are a
very different set of drivers than [those of] the Western companies.

For Western corporations that are operating in China, what are the advantages and
disadvantages of using those international PR firms versus in-house communications
experts to publicize the corporation’s CSR programs?
I think the first thing is that Western companies, by and large, are more than
happy to publicize their CSR work. In this region, particularly Chinese firms
but across Asia in general, companies are much less willing to blow their own
trumpet because culturally, particularly in China, culturally you do not talk
about how good you are. One of the first things you learn when you study
Chinese as a language is that when someone compliments you or praises you
on something, you respond with “Nali? Nali?”(哪里? 哪里?), a phrase that
translates literally to “Where? Where?” but which actually means, “Not really.
Not really.”

This works at a company level as well. Companies are very resistant to
promoting their good deeds. I’ll give you an example. McDonalds committed
itself to spending RMB$26 million on their Ronald McDonald House over the
next three years. That was the announcement. But if you go and look at Li &
Fung, which is a big trading company in Hong Kong, every year they pay out
HK$100 million for scholarships for Chinese students. And you never, ever
hear of that. They never talk about that. Now, you know, there are very few
Western companies that would be shelling out HK$100 million and wouldn’t
be talking about it.

Exactly. Western companies would want a return on that “investment.”

That’s right, they’d want a return. And you know I understand that completely
and that’s fair enough. But in the Chinese case, the Chinese companies are
happy to have a photograph of themselves handing out the million-RMB check
to the Red Cross. So Chinese newspapers are full of pictures of Chinese
business leaders handing over the 10-yard check. Huge check, you know, 10
people holding it. They’re happy with that sort of stuff, but they think beyond
that. They’re very, very cautious. And you know, part of it is that they just

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don’t want other people to know what they’re doing, and that whole cultural
thing. I think Western PR firms want to be involved in public relations and
promoting that sort of thing. And Chinese companies are saying, “We don’t
need that. We don’t want that.”

Do the multinational corporations generally use the PR firms? Or do some of them
just use their own in-house communications experts?
I have no idea. But we work with a lot of companies in the toy, apparel and
shoe sectors, and increasingly in the electronics sector, that are doing a lot of
stuff that they try and keep away from the PR people in their own companies.
Like Bill Anderson at Adidas, for example, he’s in charge of their supply chain
CSR. He’s very cautious of letting too much get into the hands of the PR
people at any desk because he really hates the thought that all the stuff he’s
doing in the supply chain would be seen as PR. But I think there’s quite a lot of
those people out there in those sectors that I mentioned who are really involved
in what the company does on the ground, in factories for instance, because they
really believe that conditions should change for the better. And they don’t see
it as PR fodder at all. And there’s quite a bit of resistance to that. But in other
firms, where it’s driven from the head office in the U.S. or Europe,
communication strategies and big firms associated with doing that, there are no
qualms about that.

It goes back to the culture of the multinational corporation and ties back to the main
strategies back at headquarters in the U.S. or wherever.
Well, partly. But it’s also that people on the ground here have some autonomy.
Companies like Nike, for instance, learned very early on that publicizing what
they were doing was counter-productive. If you’re telling people too often how
good you are, there’s a lot of people out there who start saying, “Well, you
know, they’re telling us all the good things they’re doing. But we know they’re
doing a lot of not-so-good things; they’re not telling us that.”

Right. For every good CSR program that a company might publicize, critics will find
shortcomings to highlight. And of course, companies won’t talk about their
sweatshops in Malaysia or how they’re polluting the environment.
Right. So companies that have been under enormous criticism; your Philip
Morrises, your Nikes, your Adidases, Reebok, Mattel, Gap, those sort of
companies, are much more cautious on their PR messages. Companies like

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Levi’s; Levi’s is probably doing the most on-the-ground engagement with
migrant workers in China, but you never hear about them.

It’s interesting that they wouldn’t want to publicize that. A big company like Nike, it
seems like they’d want the PR. Back in Beaverton, Oregon Phil Knight or some other
executive would be telling them to really push the CSR.
They’re pushing it. They’ve got 80 people globally working on compliance on
CSR in their supply chains. And they release a CSR report, but they’re very
cautious about pitching a message that says “We’re great guys” because that’s
what they did for 10 years and it didn’t work. Now the message is a much
more cautious one, a much more humble one. It’s also a message that says,
“We’re doing a lot but we haven’t got a lot of this right. We need help.”
They’ve had to learn the hard way that the more you tell people what you’re
doing, the more they resist. And the second thing there is that the more
information you provide people, the more they have to criticize. So, you know,
Mattel is the number one toy company in the world and they put out a big
report every year. And that just gives activists something to grab onto. So the
number two toy company in the world doesn’t put out anything and everyone
leaves them alone because they’ve got nothing to attack. So it’s pretty
complicated, I think.

There’s one CSR horror story, I’m not sure if it took place in Asia or somewhere else,
but it was about a tobacco company that made a CSR donation and then spent 10
times that amount of money on publicizing the CSR.
It was Philip Morris. I think it was in the U.S. actually. In one of our training
courses, we have the communications director for Asia for Philip Morris to
come along and give a talk titled “Can a cigarette company be socially
responsible?” It’s a really fabulous talk because it’s really in your face, to the
students, to the participants in the training. It’s a very good talk and she talks
about that case. She talks about, you know, I think they gave US$10 million.
And they spent, well, I don’t how much they spent, but they spent more than
what they gave and Philip Morris learned a very tough lesson from that, and so
did a lot of other companies. There is caution now. That story is pretty well
known in the community out here.

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OK. I’ve got one last major question for you Stephen. Do you see the drive for CSR in
China as losing steam or do you foresee a long-term CSR trend that will occur in
China and possibly even cause major paradigm shifts in Chinese civil society?
It’s not slowing down at all. In fact it’s the reverse. In 2005, the Chinese press
dubbed 2005 “The Year of CSR.” 2006 has been more intense. In November
2006, I could have gone to four very major CSR conferences in China. That’s
just the major ones. Even if I put two or three staff whose job was just to attend
CSR seminars, workshops, conferences and other things in China, we would
not keep up. We would not keep up. And it’s getting more and more senior. In
2004, the Shenzhen city government closed down a CSR seminar because they
were worried about CSR. This year, the mayor of Shenzhen said that CSR is
the future of Shenzhen. So in two years, it’s completely reversed. And you’ve
got some of the most powerful ministries in China researching CSR and
releasing documents on CSR that companies should be following. Shenzhen
City is releasing a CSR standard for the city. The Shenzhen stock exchange has
an instruction on CSR. All of these things are just snowballing. I don’t know
whether it’ll bring about a paradigm shift, but in civil society, a lot of people in
China are now talking about CSR. You know, The China Philanthropy Times,
which is a newspaper that deals with sort of the philanthropy of Chinese
companies, is now talking about CSR, saying, “You know, it’s no longer just
about philanthropy.” And I think that the discussion about CSR in China will
just keep on growing. Companies are starting to report on CSR in China.
Companies are starting to understand it. We see it as a market for CSR Asia.
But it’s a difficult one for us to kind of get into because of the issues I talked
about before. I really don’t see it slowing down at all. It’s here to stay and I
think it’s going to have a profound influence, particularly because more and
more Chinese companies are investing offshore. They’re operating in more
transparent environments, and they’re learning about these sorts of things and
will bring these lessons back into China as well.

Yeah, that’s right. One of the related issues is that Chinese companies want to start
expanding, sending their brands overseas and making their companies more well
known outside of China. It seems like CSR could become more important to them
because foreign consumers will say, “Hey, what are you doing in your own country?
What kind of programs do you have to help your own people?”
Absolutely, and we’re seeing that in Hong Kong. We just did some research on
Hong Kong clothing brands. So this is your Giordanos, your Pasinis, these sort

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of companies. And as those companies start to move out of Asia, they’re
realizing that they’re operating in a completely different environment where
consumer pressure matters. And they have to start thinking about these sorts of
things. And that sort of thing will happen to Chinese companies as well.

3.4 Summary of Dr. Stephen Frost Interview

The views expressed by Dr. Frost in this interview can be summarized in five main
points:
• CSR is much more than a passing fad in China’s business world. It will remain
an important issue in China for many years.

• CSR is a very hot topic among political figures and business because it is tied
so closely to the CCP’s drive for Harmonious Society.

• International PR firms’ CSR clients are overwhelmingly Western corporations.
Chinese companies are generally reluctant to publicize their CSR efforts, so
PR firms are not able to market this element of their CSR services to the
Chinese business sector.

• International PR firms’ involvement with CSR usually takes one of three forms.
The firms often act as a kind of “dating service” that hitches corporations up
with civil society organizations to act as conduits for the corporations’ CSR
programs. PR firms are also involved with organizing high-profile CSR events
and conducting CSR-related research.

• Some MNCs, in an approach similar to that of Chinese companies, are
reluctant to publicize their own CSR programs. The MNCs know that doing so
may draw criticism or unwanted scrutiny.

3.5 Case Study: Fleishman-Hillard - TNS “The CSR Challenge:
Where Does Hong Kong Stand?”
Fleishman-Hillard, a subsidiary of Omnicom, is one of several large, well-known
international PR firms operating in China. TNS is a marketing research company that

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also operates internationally. This section deals with a partnership between the two
companies that resulted in research relative to this thesis. The story of the partnership
provides a case study in how international PR firms are driving the development of
CSR in China and also corroborates Dr. Stephen Frost’s view regarding two of the
ways that international PR firms are shaping China’s CSR landscape: through research
studies showing the importance of CSR and through high-level events that showcase
CSR-related issues. While the FH-TNS study itself is technically considered
secondary research, the author’s firsthand work at Fleishman-Hillard with other
aspects of “The CSR Challenge: Where does Hong Kong Stand?” qualify as primary
research.

3.5.1 The Role that Research Plays in PR Firms’ CSR-related Work in China
Research can be an important and powerful tool in the hands of PR agencies that are
involved with CSR in China. By conducting a CSR-related research project, either by
themselves or in conjunction with a research firm, PR firms can produce
documentation that persuasively highlights the need for companies to enact CSR
programs. The research can also be used to identify areas in which the PR firm is able
to assist client companies. Consider, for example, Edelman’s annual Asia Pacific
Stakeholder Study, the 2005 version of which was conducted with global research firm
Harris Interactive (Edelman, 2005).

This research examined Asians’ “trust in institutions and information sources, the
drivers of stakeholder opinions and the drivers of responsible corporate

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behavior/CSR” (Edelman, 2005). The study’s findings touch on five areas that are of
interest to international PR firms, such as Edelman, that operate in China: trust in
institutions, trusted communication sources, spokespeople (degree of trust and
believability), communications vehicles (trust and believability) and characteristics of
a responsible organization. There are many ways in which Edelman could use this
study to attract business. For example, Edelman might point out to a potential client,
such as a large corporation, the study’s finding that CEOs are the most highly trusted
(54%) sources of information about corporations, versus the media, which is trusted
by only 19% of respondents. Edelman could then orchestrate public events centered on
CEO appearances and consult the corporation on how to make strategic use of the
CEO’s communications with stakeholders.

PR firms usually organize a high-profile event to launch research. Government
officials, executive-level managers and other VIPS from the business world are invited,
and the audience is shown the research and reminded of the importance of CSR. With
any luck, business representatives at the event will then hire the PR firm that produced
the research. Then, the PR firm can present the entire range of CSR services that it has
to offer and work with the client to craft programs that suit its needs.

3.5.2 The Research
A coherent CSR strategy and policies can certainly contribute to a firm’s
bottom line. Good CSR policies start internally, focusing on the company’s
employees and their specific needs. (Nancy Payne, General Manager of
Fleishman-Hillard Hong Kong) (CSR in Hong Kong, 2006, HK Challenge
Addressed)

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Payne’s remarks are based on research that was jointly conducted in Hong Kong by
Fleishman-Hillard and TNS in early 2006. According to the official FH-TNS brochure
that explains the research:
Corporate Social Responsibility (CSR) is one of the most widely discussed
topics in management circles, forcing businesses to take account of their
economic, environmental and social impacts in the way they operate. Here in
Asia, there is increasing pressure on companies to ensure sustainable
development and promote social equity, working with their employees, local
communities and governments. While CSR is here to stay, there is
considerable uncertainty about the key drivers of corporate citizenship and
how companies should approach CSR in their operations.

The Corporate Social Responsibility Survey was conducted to assess 500 Hong
Kong based mid to senior level managers on their perception of CSR in Hong
Kong, where it ranked in importance for their companies’ strategies and
whether CSR policies may contribute to bottom line success. The survey of a
representative sample of n=500 middle and senior management professionals
in Hong Kong was conducted by the TNS sixth dimension online access panel
in January 2006. The study applied the TNS proprietary TRI*M CSR Manager,
a proprietary methodology used by organizations worldwide to measure and
manage stakeholder relationships. Results are presented with a maximum
margin of error of +/- 4.3% at a 95% confidence level (CSR in Hong Kong,
2006, TNS HK Survey).

The Corporate Social Responsibility Survey indicated that in Hong Kong, the main
drivers of CSR are: transparency and accountability, making workplace and
community concerns business priorities, and offering staff training and development
opportunities. CSR in Hong Kong, it seems, is primarily about how a company treats
its employees and responds to their needs. Incidentally, these findings are very similar
to those of a similar research project conducted in the U.S. (Fleishman-Hillard CSR
Blog, 2006).

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The Hong Kong research shows that mid and senior level employees rank companies’
treatment of employees as more important than other elements of CSR. This finding is
a reflection of the disturbing labor practices that have long been standard in Hong
Kong. According to a study by the Chinese University of Hong Kong, workers in the
city routinely work overtime at least eight days per month (Hong Kong University,
2005). The same study reported that Hong Kongers work an average of nine to 15
overtime hours per week. Much of this time, however, is wasted because employees
draw out their work time on projects out of fear of being the first to leave the office, or
of leaving before the boss leaves for the day. In addition, there have long been
problems in Hong Kong with sexual harassment and the firing of female employees
who become pregnant (Pawlyna, 2006). Employees have had a hard time in Hong
Kong through the years, so it’s no surprise that they view fair treatment as the most
important part of their employers’ CSR programs.

Other notable findings of the FH-TNS research include:

• Transparent and accountable corporate governance is critical.
• Management must be seen to care about employees and the broader
community.

• 86% of respondents believe that clearly defined and implemented CSR policies
are relevant to the overall success of their companies.

• Other important CSR drivers in Hong Kong include supporting local
community oriented projects (financially or through employee volunteer
programs) and paying employees fairly.

• Environmental consciousness ranks fairly low on the Hong Kong CSR radar.

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3.5.3 The Event

On July 4, 2006, Fleishman-Hillard and TNS co-sponsored an event entitled “The
CSR Challenge – Where Does Hong Kong Stand?” FH organized the event, enacting
standard PR firm duties such as handling event logistics, invitations, staffing and
media relations for the event, as well as lining up the speakers. At this event, the
results of the FH-TNS research study were unveiled before senior members of the
Hong Kong business community. (Note: The author worked on this event and data
reported is from personal experience).

The event audience consisted of NGO representatives (World Wildlife Fund-Hong
Kong), business leaders and corporate executives from local and foreign firms
operating in Hong Kong. Several law firms, several banks (Barclay’s), and other
companies (Huawei, Apco Asia) were represented in the audience. These high-ranking
potential clients came to view the latest snapshot of CSR in Hong Kong. And with any
luck, the research convinced some of them that the services of FH could help them
make their own CSR programs successful.

Opening remarks at the event were delivered by Nancy Payne, who laid bare the
difficulties facing PR firms that seek to conduct CSR business in Asia:
PR firms want to get into the CSR market, but at the same time, we always tell
people that CSR is not a marketing function. This leads to confusion and
occasional derision from the business community, and others who think that
CSR is nothing more than corporate smoke and mirrors. But CSR is all about
communication with stakeholders, and that’s what PR firms do: connect
organizations with their stakeholders.

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Payne believes that the most important thing for PR firms themselves is that client
companies actually believe in and follow through with genuine CSR programs. PR
firms are more than willing to help companies with CSR services, but the company
must actually make the commitment and see that the high-minded CSR goals
described on the corporate website coincide with what is really happening on the
ground.

After Payne’s opening remarks, TNS executive Steven Yap presented the results of the
research. During his presentation, Yap noted that according to the survey, senior
managers are more likely than mid-level managers to believe that their organizations’
CSR is strong and effective. Since the pool of respondents consisted exclusively of
mid and upper level employees, it is possible that rank-and-file Hong Kong employees
have different viewpoints. Next, a panel of three experts made remarks, commented on
the research and took questions from the audience. The panel consisted of Dr. Ruth
Shapiro (Founding Executive Director, Asia Business Council), Albert Kwong Tak
Lai (Chairman, Hong Kong People’s Council for Sustainable Development) and Paul
Angwin (Corporate Social Responsibility Manager, Manpower Hong Kong). The
panel moderator was Stephen Frost (CSR Asia).

Dr. Shapiro offered some of the most spirited comments during the panel discussion.
Her views, she said, were based on her extensive work with the Asia Business Council
over the previous several years. Dr. Shapiro said that CSR and sustainability can be
broken down into many different components. Asian companies have been doing CSR

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for a long time, but unlike Western organizations, they do not call it “CSR” and do not
seek to glorify such activities because doing so demeans the value of the activities.
She further commented that Asian civil society is weaker than Western civil society.
This affects the development of CSR in Asia in that Asians do not have as strong of an
inclination to volunteer. She also said that Asian companies view with trepidation any
proposed partnerships with NGOs. In response to the question “Why are CEOs from
the Asia Business Council reluctant to engage with NGOs?” Dr. Shapiro answered:
Because their organizations have little experience with NGOs and aren’t used
to working with them. Also, the Asian CEOs may think it isn’t worth their time
and money to engage NGOs, or that such relationships will be inefficient. Also,
NGOs often will only ask for money and offer little else. More case studies are
needed to show how NGOs can help companies achieve their goals.

Dr. Shapiro also challenged the FH-TNS research’s finding that attention to the
environment is not that important to Asian companies. On the contrary, Dr. Shapiro
said, environmental CSR is actually quite important in Asia. She cited the example of
the Hong Kong real estate company Wang Ke, which has enacted environmental CSR
programs that far exceed the law’s requirements. Albert Lai added, “People expect
companies to behave better than they are legally required to.”

In their closing remarks, Frost and the three members of the panel all agreed that CSR
programs must be genuine in order to be effective. Angwin said, “While the PR
function of publicizing CSR is useful, companies must make sure that the substance of
CSR activities is genuine.” Nancy Payne added that CSR is often interpreted as
nothing more than a PR move. But FH, she said, believes that there is a big difference

93
between mere publicity and engaging your stakeholders. To FH, engaging
stakeholders is a key element of any CSR program. Frost summed up the event:
The title of today’s event is “The CSR Challenge, Where does Hong Kong
Stand?” And the answer [to this question] is, “Hong Kong stands behind
China.” In Shenzhen, companies must comply with CSR regulations in order
to get contracts and benefits; Shenzhen is well ahead of the game in many
ways. But Hong Kong has transparency and rule of law, so I’m optimistic
about the future.

3.5.4 The Website

Not long before the staging of the FH-TNS event, the decision was made to create a
website that would showcase the research and the event itself:
www.csrinhongkong.com (CSR in Hong Kong Homepage, 2006). The website was
created entirely by FH, and one of its main functions is as a marketing tool that will
attract additional CSR business. Regardless of the accuracy, limitations or flaws of the
research, the research and the website nonetheless broaden the debate in Hong Kong
over CSR. The website contains photos from the event and the FH and TNS
boilerplates, as well as links to the research documents and the homepages of FH,
TNS and organizations that sponsored or took part in the event. An inspirational
Winston Churchill quote, “Responsibility is the price of greatness,” appears on the
homepage. CSR-related quotes from event participants are also displayed. There is
also a “Contact Us” link, which provides FH Hong Kong with the contact information
of visitors to the site, who could conceivably enlist the CSR services of FH at some
future time.

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There are already reams of webpages dedicated to the topic of CSR in Asia. The
csrinhongkong.com website adds to this vast collection of information. In doing so, it
helps keep CSR in the news and on the minds of businesses operating in Hong Kong.
This is good for the SAR, and also for the business of international PR firms in the
region.

3.5.5 Fleishman-Hillard’s CSR

Aside from talking the CSR talk, FH Hong Kong also walks the CSR walk. The firm
does have a genuine interest in helping the Hong Kong community. Employees are
encouraged to volunteer and take part in community service programs. Consider the
November 4, 2006 “Arts in the Plaza” event in Hong Kong. This event was designed
to provide a day of fun and entertainment for Hong Kong kids, during which they
could try their hand at arts and crafts and be free of school and parental pressure for a
few hours (Hong Kong Youth Arts Foundation, 2006).

Before the event was held, FH sent out an office-wide email encouraging employees
to volunteer for the “Arts in the Plaza” event. Several of them did, providing an
excellent example of how, at least in one office, an international PR firm can be
genuine in its attempts to do good things for the community in which it operates; in
effect, practicing its own good CSR while also publicizing itself.

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3.6 Summary of Fleishman-Hillard - TNS “The CSR Challenge:
Where Does Hong Kong Stand?”
The FH-TNS Case Study reveals the following key points:
• Because Hong Kong has transparency and rule of law, CSR has thrived and
will continue to thrive there. Hong Kong’s long history of association with
Western business models may also make the Hong Kong CSR market more
lucrative for international PR firms than the mainland market.

• International PR firms face three obstacles in their attempts to conduct CSR
projects for Chinese companies: Chinese companies feel that promoting CSR
demeans the value of the activities; Chinese companies are reluctant to work
with NGOs (which PR firms often try to link corporations with); and China’s
weak civil society is not ideal for the growth of CSR.

• International PR firms use research, presented to business executives at high-
level CSR events, to attract CSR-related business.

• PR firms may insist that CSR is not a marketing function, but at the same time
they often seek to promote clients’ CSR programs. This results in confusion
about CSR within the business community. But CSR is to a large extent about
communication with stakeholders, and PR firms’ goal is to connect
organizations with their stakeholders.

• In Hong Kong, CSR is very important to employees, who consider companies’
treatment of workers the primary indicator of companies’ social responsibility.

• Fleishman-Hillard, an international PR firm, encourages its own employees to
take part in CSR activities that help the community and improve the image of
the firm.

3.7 Gongguan Xiaojie (公公公公关关关关小姐小姐小姐小姐)
“Gongguan Xiaojie” is a 22-episode Chinese television series that was first aired in
1990 on Guangzhou TV in Guangdong Province, China. The show was a wildly
popular hit; achieving a viewership rating of 90.9% during its first season (Zhang D.,
2004). This program, the title of which roughly translates to “PR Girl,” follows the

96
career and personal life of Zhou Ying, the PR manager of the White Swan Hotel in
Guangzhou, the capital city of Guangdong Province. In the late 1980’s and early
1990’s, the White Swan Hotel was famous as one of the best hotels in China. It was
also one of the first private businesses in China to have a well-organized public
relations department. PR had never been so closely examined in a Chinese television
show, and the show introduced millions of Chinese to the industry. Gongguan Xiaojie
is a fascinating portrayal of the PR industry in 1980s China, and has probably played
some role in formulating Chinese people’s general opinions of the PR industry. The
show portrays Zhou Ying and her PR team as dedicated, hard working and intelligent.
Furthermore, their efforts to use PR to promote the hotel are portrayed in a positive
light. For these reasons, Chinese people today (at least, those that are familiar with the
program) may have a more positive impression of PR than many Westerners, who
sometimes view the PR industry as deceptive and malevolent.

Gongguan Xiaojie itself served a public relations function for two organizations. First,
the show publicized the White Swan Hotel within China, portraying it as a
sophisticated establishment catering to well-off Chinese, international businessmen
and other VIPs. Second, the program featured occasional political commentary that
praised China’s Communist system. For example, in episode five, Zhou Ying has a
conversation with her friend Gao Xiang in which he repeats the Chinese government’s
assertion that Taiwan is a province of China. Gao Xiang also describes life in the U.S.
and Japan as difficult and not as good as life in China. Perceptive Chinese viewers,
long accustomed to such political rhetoric, probably recognized Gao Xiang’s

97
statements as mere wenxuan (文宣; propaganda). Many Chinese still associate PR
with political propaganda, but Gongguan Xiaojie helped to show the business
applications of the craft.

Interestingly, several episodes of Gongguan Xiaojie deal explicitly with a CSR
campaign. In an effort to promote the White Swan Hotel, Zhou Ying and her PR team
sponsor a campaign to educate the public about the need to protect the habitat of
China’s national animal: the panda bear. Thousands of RMB in donations are collected
during a related event at the hotel, which receives extensive press coverage. At a press
conference (episode four), Zhou Ying tells the media that the panda educational
campaign is for the good of society (CSR) and that it also serves to promote the hotel.
She later explains to a group of hotel guests that PR is “the art of management” and
that the hotel’s PR department is involved in management’s decision-making process.
The guests are impressed, and when Zhou Ying mentions the panda educational
campaign, they excitedly hand over wads of cash as donations.

Gongguan Xiaojie provides a fascinating view of China’s PR industry in its nascent
stages. It’s impossible to know what percentage of Chinese have watched the program,
but those who have seen it probably have a better understanding of PR and CSR than
those who are not familiar with the program. Gongguan Xiaojie introduced China to
the PR industry and the practice of CSR, and provides a good starting point for
Western PR practitioners seeking to educate the Chinese about PR and the importance

98
of CSR. For practitioners, viewing a few episodes of Gongguan Xiaojie is also an
excellent way to see how PR was portrayed during the industry’s early days in China.

3.8 Summary of Primary Research
The main lessons of the primary research can be summarized as follows:

• Propagated by the CCP, Harmonious Society is the current socio-political
paradigm dominating China. International PR firms and MNCs should strive to
design and enact CSR programs that are aligned with the Party’s national
development goals and which do not go against the norms of Chinese society.

• The management function of a wide variety of companies needs CSR programs
and advice, which international PR firms provide. But CSR is much, much
more than a PR tool. It’s a strategic approach and an important strategic
management tool for businesses operating in China. Savvy PR professionals
will portray CSR as an important element of the company’s overall China
business plan.

• The term “corporate social responsibility” (CSR) is too limiting because it
implies that corporate backing is somehow necessary for society to enjoy the
benefits of “CSR” programs. Social responsibility (SR) may be a more
appropriate term because SR is all-encompassing and makes “CSR” a broad
concept that can be practiced by anyone, be they individual citizen,
government or corporation.

• It is easier for MNCs to enact large-scale, expensive CSR programs than it is
for large Chinese companies, many of which are still state-controlled. MNCs
are independent entities free to spend as much as they like on CSR, while the
Chinese state-controlled companies require CCP approval for such actions.

• In the Chinese ethos, there does exist the notion that helping others through
actions such as CSR is the right thing to do. But due to a long, painful history
of hardship and instability, the Chinese have been forced to consider their own
immediate needs before lending a hand to neighbors.

• MNCs form the vast majority of international PR firms’ CSR clientele.

• Some MNCs are not proactive in publicizing their CSR activities because they
are more concerned with helping their stakeholders than with PR benefits the
CSR may bring. Other MNCs fear that publicizing their CSR will draw

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unwanted attention from groups that argue the MNC is still not doing enough
CSR.

• In Hong Kong, companies’ treatment of workers is the number one criterion
upon which workers base their opinions of companies’ CSR efforts.

• Two important elements of PR firms’ work in China are organizing CSR
events and connecting MNCs with civil society organizations that function as
the MNCs’ CSR arm.

• International PR firms’ CSR work in China also involves conducting research
on CSR drivers and practices. The research can be a powerful tool that the
firms use to design CSR tactics and strategies for clients. Events at which new
research is unveiled are also used to attract new CSR clients.

• Gongguan Xiaojie is a valuable source for Western PR practitioners hoping to
learn more about the origins of PR in China.

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CHAPTER FOUR: Conclusion

4.1 Conclusion

China’s problems are as extensive and colossal as the country’s potential for greatness.
There is no silver bullet – not Harmonious Society and not CSR – that can quickly
purify China’s fouled air and water, bring healthcare and economic stability to all
citizens, excise the scourge of corruption, make workplaces throughout the nation safe
and achieve social justice in China. The CCP’s vision of a Harmonious Society is an
attempt to address these ills, most of which are tragic byproducts of China’s drive for
modernization and economic success. But it will take years before it becomes clear
whether the quest for Harmonious Society is bringing about the widespread positive
effects that China’s leaders must achieve in order to meet the CCP’s long-term goals
and establish their own powerful legacies.

CSR holds great promise as a means of not merely achieving Harmonious Society, but
more importantly, addressing China’s problems directly and in practical ways. The
educational programs sponsored in Hong Kong by Citigroup and Microsoft, the
establishment of CSR standards and codes, the Hope Project, Adidas’ supply chain
CSR, the work of the countless NGOs operating in every corner or China; these are
just a few examples of how CSR is taking hold and making a difference on the ground.
The crucial point for international PR firms, MNCs, Chinese companies and the CCP
to remember is that CSR does have the power to bring about change – but only if the
CSR is relative to stakeholders, well executed and genuine.

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International PR firms employ a wide variety of CSR tactics and strategies that expand
far beyond mere communication of CSR. Without uttering a word to the media about
clients’ CSR, PR firms can still do much behind the scenes to make CSR programs
more effective. Communication of CSR, by international PR firms or corporations
themselves, should be completely subordinate to the CSR programs themselves. What
is communicated about CSR is far less important than whether the jobless are given
livelihoods, the hungry fed, the sick healed, the homeless provided with shelter and
the disenfranchised recompensed. This is the shared dream of socialism, Harmonious
Society and CSR. Provided these goals are met, the capitalist motives of PR firms,
MNCs and other businesses are inconsequential. The smiling bust of an overseas
Chinese businessman in the courtyard of a Xiamen primary school he paid to construct;
a newspaper article placed by an MNC’s PR firm that lauds the corporation’s generous
health and retirement benefits for its workers; a press conference to announce a Hong
Kong company’s philanthropic gift to a local charity; a team of employees from
Ketchum’s Beijing office volunteering to work with disadvantaged children for a day;
each of these scenarios would no doubt be construed by CSR naysayers as arrogant
self-congratulation and shameless self-promotion. The businessman, the MNC, the
Hong Kong company and the volunteers would no doubt recognize these actions as
great PR. But neither of these perspectives can override the fact that these CSR efforts
genuinely help people. This is the heart of CSR, which is even now helping to improve
the lives of Chinese.

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Research indicates that there is a strong likelihood CSR will continue to become more
important, popular and widespread in China. MNCs, which are expected to give
something back to China by the government and citizens, run diverse and effective
CSR programs throughout the country. Among Chinese firms, particularly those in
Hong Kong, there will always be a few of the more advanced and forward-thinking
executives who recognize the value international PR firms provide, especially as those
Chinese firms expand overseas. It is doubtful, however, that large numbers of Chinese
companies will ever rely significantly upon international PR firms for CSR-related
advice and assistance. Mainland Chinese companies in general are reluctant to partner
with NGOs and publicize CSR, and are simply not accustomed to hiring high-priced
outside consultants. International PR firms in China, it seems, are destined to devote
their work with CSR almost exclusively to MNCs and large Western corporations
operating there. This very wealthy clientele has a clear appreciation for the value of
professional public relations counsel on all aspects of CSR, and will keep international
PR firms active in China’s CSR industry regardless of what the Chinese firms do.
International PR firms can and will continue to thrive in China. The high number of
PR firms doing business in the country is proof positive that these firms can be
profitable. Even if they were to ignore the entire CSR market, they could still earn
their fees in other ways: media relations, consumer PR, event organization, crisis
management, news clipping services, translation, etc. Thus, international PR firms can
still take home a large piece of the booming Chinese economy.

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As China hurtles forward into the 21
st
century, the country is undergoing rapid and
massive change. Business, domestic and foreign, is thriving. But millions of ordinary
Chinese are being left behind and left out in the cold as social safety nets and old
communist paradigms whither away and consumerism flourishes. Leaving a troubled
past, charging into an uncertain future, China must keep up the struggle to cope with
its many problems while at the same time seeking a way to overcome them. With or
without the help of international PR firms, CSR will play a central role in
accomplishing this.

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Abstract (if available)

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Asset Metadata

Creator O'Boyle, Patrick M. (author)

Core Title The role of international PR firms in the use of CSR to achieve harmonious society in mainland China and Hong Kong

School Annenberg School for Communication

Degree Master of Arts

Degree Program Strategic Public Relations

Publication Date 04/24/2007

Defense Date 04/02/2007

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag China,corporate social responsibility,OAI-PMH Harvest,Public Relations

Place Name China (countries), Hong Kong (city or populated place)

Language English

Advisor Floto, Jennifer D. (committee chair), Parks, Michael (committee member), Swerling, Jerry (committee member)

Creator Email oboyle@usc.edu

Permanent Link (DOI) https://doi.org/10.25549/usctheses-m433

Unique identifier UC1469042

Identifier etd-OBoyle-20070424 (filename),usctheses-m40 (legacy collection record id),usctheses-c127-494075 (legacy record id),usctheses-m433 (legacy record id)

Legacy Identifier etd-OBoyle-20070424.pdf

Dmrecord 494075

Document Type Thesis

Rights O'Boyle, Patrick M.

Type texts

Source University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

Repository Name Libraries, University of Southern California

Repository Location Los Angeles, California

Repository Email cisadmin@lib.usc.edu