China s Corporate Social Responsibility with National Characteristics: Coherence and Dissonance with the Global Business and Human Rights Project

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1 China s Corporate Social Responsibility with National Characteristics: Coherence and Dissonance with the Global Business and Human Rights Project 1 Abstract: This chapter has two principal objectives. First, it seeks to show how the qualities of social and institutional organization and political culture of China are critical for understanding the way corporate social responsibility (CSR) is approached in China. Second, it examines how these Chinese characteristics have affected the way in which Chinese corporations approach the issue of CSR in general and CSR-based human rights responsibilities in particular. Part I examines the global context in which Chinese CSR is framed. Part II analyzes the political context in which CSR operates in China, and the socio-political culture that shapes CSR choices. Notions of socialist modernization, economic development and the importance of building social, economic, and political structures with Chinese characteristics largely shape Chinese policy, drive Chinese administrative institutions, and shape the context in which Chinese enterprises approach CSR issues. CSR, like Chinese state policy, then, focuses on issues of economic development and prosperity rather than on issues of civil and political rights. Part III then considers the effects of these substantive choices on the operationalization of CSR in China. In China the obligations of both state and enterprise are understood in terms of institutional duty to people rather than in terms of individual rights that may be asserted against institutions. That shapes both the approaches to remediation and the relationship between the state and enterprise in issues of CSR compliance. That relationship seamlessly connects (1) CSR substance (tied to socialist modernization) and operationalization (tied to the political premise that the protection of the liberties of individuals are an obligation of the state rather than a right located within an individual) and (2) the state, the Communist Party, and business enterprises. Together, these define the Chinese Characteristics of CSR. It is only by understanding this close connection between state policy and corporate responsibility that one can begin to understand the way in which CSR is internalized within China, and that one can begin to develop more successful approaches for translating global human rights discourse into the Chinese context. I. INTRODUCTION: TOWARDS A GLOBAL CSR PROJECT The last generation has seen the emergence of corporate social responsibility (CSR) as an approach to corporate governance within systems of law domestic, international, and transnational 2 and as an important element in the structuring of non-state governance systems. 3 Its emergence has paralleled the rise of globalization as a mechanism for trade 4 and, more importantly, as a stress element in the prior system of governance. The stress arises from a tension between the premises of globalization (fracture, permeability, porosity of states, and governance polycentricity) 5 and those of classical Westphalian 1 W. Richard and Mary Eshelman Faculty Scholar & Professor of Law, Professor of International Affairs, Pennsylvania State University. The author may be contacted at lcb911@gmail.com. 2 Discussed in, Multinational Corporations, Transnational Law: The United Nations s Norms on the Responsibilities of Transnational Corporations as a Harbinger of Corporate Social Responsibility as International Law, 37 Columbia Human Rights Law Review (2006). 3 See, e.g., Gunther Teubner, Societal Constitutionalism: Alternatives to State-Centered Constitutional Theory?, in Constitutionalism And Transnational Governance, Christian Joerges, Inge-Johanne Sand and Gunther Teubner, eds., Oxford Press, pp. 3-28, 2004; Saskia Sassen, Local Actors in Global Politics, Current Sociology 52(4): (July 2004). 4 Compare Thomas L. Friedman, The Lexus and the Olive Tree: Understanding Globalization (New York: Farrar, Straus and Giraux, 2000) with Joseph E. Stiglitz, Globalization and Its Discontents (New York: WW Norton 2003). 5 Cf. Poul Kjear, Constitutionalism in the Global Realm: A Sociological Approach (Routledge, 2014). Electronic copy available at:

2 2 state system organization, one that is grounded in the idea that everything was to be ordered within the territorial boundaries of states, and that states were to manage their internal orders through law. 6 Globalization has in turn shed light on the resulting bifurcation of governance 7 between the state-centric political orders and the emergent transnational governance systems. On the one hand, traditional governance is centered on national and international political orders and is grounded in law. 8 On the other, globalization has made possible the rise of functionally differentiated 9 transnational governance systems with power to discipline non-state institutionalized communities in the social sphere. 10 The result has been to produce at least three sources of governance from out of which CSR is transposed into the habits and behaviors of enterprises national, international, and private. 11 The normative element of CSR has also undergone some refinement since the third quarter of the twentieth century. 12 Though still subject to heated controversy, there is something of a consensus about the scope of CSR at a general level. First, CSR refers to the furtherance of social interests, and to the factoring of the effects on such social interests of corporate decisions, beyond a narrow and traditional focus on the maximization of shareholder or enterprise interest as the core basis for enterprise decision-making. 13 Second, CSR represents a cluster of values that serve as the foundation for determining the fulfillment, by corporate directors, of their obligations to enterprise and owner. 14 Central to this CSR focus was the objective of substituting a 6 Discussed in, Governance Without Government: An Overview, in Beyond Territoriality: Transnational Legal Authority in an Age of Globalization (Günther Handl, Joachim Zekoll, Peer Zumbansen, eds., Leiden, Netherlands & Boston, MA: Martinus Nijhoff, 2012). 7 Discussed in, The Structural Characteristics of Global Law for the 21st Century: Fracture, Fluidity, Permeability, and Polycentricity, 17(2) Tilburg Law Review (2012). 8 Discussed in, Private Actors and Public Governance Beyond the State: The Multinational Corporation, the Financial Stability Board and the Global Governance Order, 18(2) Indiana Journal of Global Legal Studies 751 (2011). 9 Discussed in, Multinational Corporations as Objects and Sources of Transnational Regulation, 14 ILSA Journal of International & Comparative Law (2008). 10 Discussed in, Transnational Corporations Outward Expression of Inward Self- Constitution: The Enforcement of Human Rights by Apple, Inc., 20(2) Indiana Journal of Global Legal Studies (2013). 11 See, e.g., Adrian Cadbury, Corporate Social Responsibility, Twenty-First Century Society: Journal of the Academy of Social Sciences 1(1):5-21 (2006). 12 See, e.g., Wayne Visser, CSR 2: The Evolution and Revolution of Corporate Social Responsibility, in Responsible Business: How to Manage a CSR Strategy Successfully (Manfred Pohl and Nick Tolhurst, eds., Chicester, UK, John Wiley & Sons, 2010); Min-Dong Paul Lee, A Review of the Theories of Corporate Social Responsibility: Its Evolutionary Path and the Road Ahead, International Journal of Management Reviews 10(1):53 73 (2008). 13 Cf. Milton Friedman The Social Responsibility of Business Is to Increase Its Profits, New York Times Magazine September 13th, 32-33, 122, 126 (1970). 14 See, e.g., Elisabet Garriga and Domènec Melé, Corporate Social Responsibility Theories: Mapping the Territory, Journal of Business Ethics 53(1-2);51-71 (August 2004). Consider as an early example of the conventional late twentieth century approach to CSR Archie Carroll s pyramid of social responsibility, which the economic responsibilities of the enterprise (be profitable) are constrained by three levels of the enterprise responsibilities legal (obey the law), ethical (do the right thing), and philanthropic (contribute to the community). See, Archie B. Carroll, The Pyramid of Corporate Social Responsibility: Toward the Electronic copy available at:

3 3 stakeholder for a shareholder (or enterprise) theory of welfare maximization 15 and the common good for profit 16 as the foundation of corporate operation. That substitution could occur within domestic legal orders, or be imposed by international treaty, or developed through the formation of customary international law, or otherwise embedded in the social norm governance framework of enterprises in the transnational sphere. This approach recognizes the importance of both a legal and social license to operate as a basis for the legitimacy of corporate activity. 17 That normative consensus, described above, has also undergone substantial development, especially since the start of the twenty-first century. At least among many of the larger multinational enterprises and the international organizations that have begun to embrace the project of CSR, there has been a move away from the pyramid, moral, or social obligation approach and similar approaches. 18 This includes the premise that CSR sits above and beyond the core notion of profit making atop of which are placed higher value but general notions of legal, ethical, and philanthropic responsibilities (the pyramid, moral, or social obligation approach and the like). 19 In its place is a conceptual scheme grounded on an assumption that CSR, that is that corporate responsibility, must evolve in parallel with the development of the state duty to protect its inhabitants, and that this evolution is reflected in the emerging consensus and structures of international law and norms along with the transnational private or hybrid standards that build on this consensus. 20 Thus in place of national pyramids of responsibility, an international legalnormative framework has emerged as the foundation for approaching the responsibilities of enterprises in the social, cultural, economic, civil, and political sphere, and Moral Management of Organizational Stakeholders, Business Horizons 34(4):39-48 at 42 (July/August 1991). 15 See, e.g., James E. Post, Lee Preston, and Sybille Sachs, Redefining the Corporation: Stakeholder Management and Organizational Wealth (Stanford University Press, 2002); Antonio Argandoña, The Stakeholder Theory and the Common Good, Journal of Business Ethics 17, (1998). 16 See, e.g., Jacob Dahl Rendtorff, Responsibility, Ethics and Legitimacy of Corporations, (Copenhagen Business School Press, 2009); Domènec Melé D. Not Only Stakeholder Interests. The Firm Oriented toward the Common Good, in S.A. Cortright and M.J. Naughton (eds.), Rethinking the Purpose of Business, Notre Dame, IN, University of Notre Dame Press, (2002). 17 See, e.g., James E. Post, Lee Preston, and Sybille Sachs, Redefining the Corporation: Stakeholder Management and Organizational Wealth, supra note But note that there remains an influential group of CSR stakeholders who tend to cling to the older view. See, e.g., U.S. Congressional Human Rights Caucus. Davis et al., The Responsibility Paradox: Multinational Firms and Global Corporate Social Responsibility, ( achieving commercial success in ways that honor ethical values and respect people, communities, and the environment, Id., at n.1). 19 [same as footnote 18] But note that there remains an influential group of CSR stakeholders who tend to cling to the older view. See, e.g., U.S. Congressional Human Rights Caucus. Davis et al., The Responsibility Paradox: Multinational Firms and Global Corporate Social Responsibility, ( achieving commercial success in ways that honor ethical values and respect people, communities, and the environment, Id., at n.1). 20 Discussed in, Realizing Socio-Economic Rights Under Emerging Global Regulatory Frameworks: The Potential Impact of Privatization and the Role of Companies in China and India, 45(4) The George Washington International Law Review (2013). Electronic copy available at:

4 4 increasingly, in the environmental sphere as well. 21 As a consequence, and certainly with increasing vigor since the start of the second decade of the twenty-first century, the discussion of the characteristics of CSR have revolved around the human rights responsibilities of enterprises (along with the state duty to protect these human rights through their domestic legal orders) and its implementation methodologies in disclosure, market regulation, international law, non-state governance systems, and national law. 22 This movement might be said to have been crystalized with the endorsement, in June 2011, of the U.N. Guiding Principles for Business and Human Rights (the GP), 23 the culminating product of a project led by John Ruggie as Special Representative to the U.N. Secretary General on human rights and transnational corporations and other business enterprises. 24 One of its core underlying premises is that both states, in the fulfillment of their duty to protect individuals resident in their territories, and enterprises, in their social responsibilities, ought to be guided by developing international and transnational norms and standards. 25 Most of these developments have emerged from the cluster of critical actors centered within developed states led principally by European States, with the United States a sometimes reluctant participant and include the large multinational enterprises and their trade groups, the global civil society organizations mostly headquartered in developed states, and communities of experts also from leading academic and consulting establishments. Discussions among these actors tend to center on the premises underlying both national approaches to business responsibility beyond law (the social, civil, and cultural dimensions) 26 and the baseline assumptions of legitimate organization 21 John H. Knox, Human Rights Obligations to Protect the Environment, Human Rights Council, 25th Session (11 March 2014), available 22 The recent interventions of the European Commission are instructive. The Commission puts forward a new definition of CSR as the responsibility of enterprises for their impacts on society. Respect for applicable legislation, and for collective agreements between social partners, is a prerequisite for meeting that responsibility. To fully meet their corporate social responsibility, enterprises should have in place a process to integrate social, environmental, ethical, human rights and consumer concerns into their business operations and core strategy in close collaboration with their stakeholders, with the aim of: maximising the creation of shared value for their owners/shareholders and for their other stakeholders and society at large; identifying, preventing and mitigating their possible adverse impact. See, Communication From The Commission To The European Parliament, The Council, The European Economic And Social Committee And The Committee Of The Regions, A renewed EU strategy for Corporate Social Responsibility COM(2011) 681 final, Brussels, Oct. 25, 2011, at p. 6, 3.1. Available 23 U.N. Guiding Principles on Business and Human Rights, HR/PUB/11/04 (Geneva and New York, 2011). Available 24 U.N. Office of the High Commissioner for Human Rights, Special Representative of the Secretary- General on human rights and transnational corporations and other business enterprises. Available See John R. Ruggie, Just Business: Multinational Corporations and Human Rights (New York: WW Norton, 2013). 25 See, e.g., European Commission, A renewed EU strategy for Corporate Social Responsibility, supra. pp This discussion extends into those areas where the relationship of business to government is sometimes inverted. This points to a state of affairs made possible under the logic of economic globalization and

5 5 of state and legal orders within free market globalization that tend to take as their model the operating premises of developed Western states and their political ideologies. Still, virtually every state has signed on to the current project of corporate responsibilities grounded in human rights. 27 But non-western states are sometimes different in some respects in their social, political, and cultural organization, and these differences may produce substantially different approaches both to the internationalization of CSR and to its internalization in their domestic legal orders. 28 Though all states may share common objectives, generally understood, the path to those objectives may not be entirely compatible with the operational premises underlying CSR and business and human rights projects emerging from developed states. 29 It is that difference in operational premises that has produced a certain tension between the vanguard elements of the business and human rights project, on the one hand, and important developing states, on the other. China is a particularly important example of both harmonization and tension in the development and operationalization of CSR. It is a state whose political organization is founded on Marxist-Leninist principles and which is organized on party-state principles. 30 Its vanguard Chinese Communist Party ( CCP ) has developed a strongly instrumental approach to governance grounded in principles of socialist modernization 31 that aims to produce a moderately well off and harmonious society. 32 It is focused on scientifically augmented by a change in the character of law and regulation from integrated systems of command to managerial and disciplinary tools. See, e.g., Katharyne Mitchell and Katherine Beckett, Securing the Global City: Crime, Consulting, and Ratings in the Production of Urban Space, Indiana Journal of Global Legal Studies 15:75-99 (2008). 27 The Guiding Principles on Business and Human Rights were endorsed by all state party members of the U.N. Human Rights Council. 28 The discussion has been particularly acute in the controversy over the existence and nature of Asian values as a variation or distinct species of human rights in contrast to conventional human rights discourse and norms, which in some quarters is understood as a western project. See, e.g., Jack Donnelly, Human Rights and Asian Values: A Defense of Western Universalism, in Critical Perspectives on the Asian Values Debate (Joanne R. Bauer, Daniel A. Bell, eds., Cambridge University Press, 1999); Jack Donnelly, The Relative Universality of Human Rights, Human Rights Quarterly 29(2): (2007). 29 Discussed in, Private Actors and Public Governance Beyond the State: The Multinational Corporation, the Financial Stability Board and the Global Governance Order, 18(2) Indiana Journal of Global Legal Studies 751 (2011). 30 Discussed in China, State Council, White Paper on China s Political Party System, available See also, Zhining Ma, The Structure and Roles of China s Party-State System in Industrial Relations: An Updated Review, China: An International Journal 7(2): (2009), Ming Xia, The Communist Party of China and the Party-State, The New York Times, 31 Modernization is a comprehensive and systematic process that includes all aspects of economic and social development. Liu Yunshan, Working Out a Path of Socialist Modernization with Chinese Characteristics, Quishi Journal (English edition) Vol. 3(2) April 1, Available 32 Chinese President Hu Jintao has instructed the country's leading officials and Party cadres to place building a harmonious society at the top of their agenda.... What are the main characteristics of a harmonious society? It will put people first and make all social activities beneficial to people s subsistence, enjoyment and development. In a harmonious society, the political environment is stable, the economy is prosperous, people live in peace and work in comfort and social welfare improves. Harmonious Society,

6 6 developing 33 a legal and normative system that is compatible with global norms but with distinctive Chinese characteristics. 34 It has a strong state sector though it is committed to globalization and its basic premises. 35 China was among the states that endorsed the Guiding Principles, but it is also committed to developing CSR with a sensitivity to its own internal social, civil, political, and cultural context. The remainder of this chapter will consider China s place in the global CSR movement, and its relationships with emerging consensus on the human rights responsibilities of enterprises. It will suggest that the core objectives of the global CSR movement, especially in its modern and transnational human rights aspects principally the basic cluster of social, economic, civil, cultural, and environmental rights are compatible with the Chinese governance system. However, the distinct governing ideology of China poses some difficulties of translation. Thus, though CSR is not generally alien to Chinese political culture, or to the culture of business operations, the language and terminology of CSR as developed in the West may be perceived as both alien and incompatible. But, more importantly, the cleavages between Chinese and Westerninternationalist human rights- oriented CSR may be explained, in some respects, by the difference in approach to governance. 36 While Western CSR is largely grounded in an individual rights-oriented approach that seeks to constrain state power, Chinese CSR must necessarily be grounded on the duty of the state (and the enterprise) to ensure individual welfare that seeks to expand administrative state power in the furtherance of CSR. Part II, which follows, briefly suggests the operational context within which CSR is received and understood. State policy operationalizing the CCP s political commitment to socialist modernization and the building of socialist democracy 37 largely shapes The 17th National Congress of the Communist Party of China, September 29, Available 33 See, Joseph Fewsmith, Promoting the Scientific Development Concept, China Leadership Monitor, No. 11 (Summer 2004) ( The idea behind the scientific development concept but not the term itself was endorsed by the Third Plenary Session of the 16th Central Committee, which convened in Beijing on October 11 14, The plenum decision did say that it was necessary to take people as the main thing [yiren weiben], establish a concept of comprehensive, coordinated, sustainable development, and promote comprehensive economic, social, and human development. This sentence has since been invoked by Chinese media as the locus classicus of the idea of scientific development. Id., 1-2. Available 34 See, e.g., Hu Jingtao, Report to the 18th National Congress of the Communist Party of China, Nov. 8, available ( We have strived to ensure and improve the people s wellbeing, promoted social fairness and justice, worked to build a harmonious world, and strengthened the Party s governance capacity and advanced nature. We have thus upheld and developed socialism with Chinese characteristics from a new historical starting point. Id., at II). 35 See, e.g., Michael Yahuda, For China, Embracing Globalization means a greater commitment to regional Security in East Asia, Yale Gobal Online, 19 Feb. 2003, available 36 See, The USA China Law Group, Western and Chinese Perspective of Corporate Social Responsibility (2008) ( There are two key differences between CSR with Chinese Characteristics and the western idea of CSR. First, CSR in China has largely been approached through a mandatory imposition by the government.... The second is the concept of social harmony. ), available 37 On socialist democracy, see Hu Angang, China s Collective Presidency (Spring 2013), discussed in, Crafting a Theory of Socialist Democracy for China in the 21st Century: Considering

7 7 Chinese policy, drives Chinese administrative institutions, and shapes the context in which Chinese enterprises approach CSR issues. CSR, like Chinese state policy, then, focuses on issues of economic development and prosperity rather than on issues of civil and political rights. Part III then considers the Chinese approach to CSR and suggests points of harmony and tension with the global CSR agenda. To understand the normative framework within which Chinese policy is expressed, constructed, and implemented, it is important to understand the framework from which it arises. That framework is not identical to the one used in the West. Though the functional results may often be the same, the differences can best be understood as arising from a difference in normative perspective. II. THE POLITICAL FOUNDATION OF CSR IN THE CHINESE DOMESTIC POLITICAL AND LEGAL ORDER The constitutional system of virtually every states tends to help shape the way in which those institutions operating within it understand the cultures of obligations that may bind institutions to individuals and vice versa. In the West, and in much of the rest of the world, one particular view has become accepted. Every individual is vested with certain rights which are personal to the individual and may be vindicated against institutions (the state usually and increasingly non-state institutions). The vindication is possible through invocation of the remedial processes offered by a judicial system provided by the state and organized to provide a neutral site for dispute resolution in accordance with law. 38 These premises are written into national constitutions. Yet the substance of rights vested in individuals remains both contested and fluid. 39 Most states tend to incorporate different approaches to defining those rights it recognizes as vested in its citizens (and, to a lesser extent in some states, its residents and transients). This view is accepted to such an extent that most people do not think about its basic premises and assumptions as anything but descriptors of the natural order of things. These premises have, through their transposition from national to international spheres, become embedded in much of the language of international human rights. 40 Much of the substantive work of international human rights is directed toward the development of a coherent understanding of human rights. 41 But a comprehensive and unified view of human rights has proven elusive. Individual rights have been divided Hu Angang s ( 胡鞍钢 ) Theory of Collective Presidency in the Context of the Emerging Chinese Constitutional State 16(1) Asian-Pacific Law And Policy Journal (forthcoming 2014). Chinese language version 为 21 世纪的中国设计社会主义 民主理论 : 中国宪政国家兴起语境下对胡鞍钢 集体领导制 理论的思考, Tsinghua University Journal (forthcoming 2015). Available at SSRN: 38 See,, Realizing Socio-Economic Rights Under Emerging Global Regulatory Frameworks, supra. 39 The GP themselves suggest the difficulty of framing a coherent set of human rights law or norms, with few exceptions, about which there is consensus among states and other actors. This is brought out in the commentary to GP See,, Realizing Socio-Economic Rights Under Emerging Global Regulatory Frameworks, supra. 41 Id.

8 8 among civil and political rights, on the one hand, and economic, social, and cultural rights, on the other. Many states, including the United States, tend to view civil and political rights as the means through which individuals may press the state to provide some measure of economic, social, and cultural rights. Developing states, including China, tend to view economic, social, and cultural rights as the necessary foundation for the development of robust civil and political rights. A number of states develop positions somewhere between these two poles. The differences in stress on rights that are emphasized as fundamental in China suggest a further variance in approach to the organization and protection of rights in China, one that reflects differences between the Chinese and conventional Western constitutional orders. The Chinese constitutional system is grounded in a set of distinct premises. China, like virtually every state on earth, has adopted a written-constitution system. The Constitution recognizes Marxism as the country s leading ideology and the Communist Party as the leading party. 42 The Constitution, at the same time, recognizes that all the powers of the nation belong to the people. The Chinese constitutional order is grounded in the distribution of popular sovereign power between the Chinese Communist Party and the administrative apparatus of the government of the state, privileging the political authority assigned to the Party over the administrative authority vested in the government. 43 The Chinese constitutional system, then, exists as a combination of polity and governing ideology, on the one hand, and state apparatus, on the other. 44 The Chinese Communist Party serves as the institutionalization of the political polity and the source of its substantive values. The government established under the National Constitution serves as the institutionalization of state power, within which the people may more directly participate under the guidance of the Party. The Party is the repository of political power; the government is the repository of administrative power. Together they represent the whole of the Chinese constitutional order. When one looks to the Chinese constitution, then, one is not presented with a document that contains within it the whole of the organization of the political collective. 45 The Constitution itself organizes the 42 Recall that the CCP is the vanguard party in China, but it also engages with a set of officially recognized united front parties. The Preamble to the Chinese Constitution provides: presides over In the long years of revolution and construction, there has been formed under the leadership of the Communist Party of China a broad patriotic united front, which is composed of the democratic parties and people's organizations and which embraces all socialist working people, all builders of the socialist cause, all patriots who support socialism and all patriots who stand for the reunification of the motherland. This united front will continue to be consolidated and developed. The United Front parties under the leadership of the CCP operate through the Chinese People's Political Consultative Conference. See National People s Congress, Chinese People's Political Consultative Conference. Available 43 Discussed in, Party, People, Government, and State: On Constitutional Values and the Legitimacy of the Chinese State-Party Rule of Law System, 30(1) Boston University International Law Journal (2012). 44 Id. 45 Discussed in Jiang Shigong, Written and Unwritten Constitutions: A New Approach to the Study of Constitutional Government in China, Modern China 36(1):12-46 (2010).

9 9 administrative power in a government; it also recognizes, as a constitutional matter, the position of the CCP both within and without the constitutional document. Thus understood, the CCP does not play an extra-constitutional role in Chinese constitutionalism. Nor is it meant to function like a Western style political party, whose members advance a political line to induce voters to elect them to office from which political authority may be exercised in government. 46 The Chinese Constitution identifies the political authority of the CCP, but does not define the extent of that authority. It constitutes a government, but that constitution is itself a product of the vanguard role of the Party. 47 The people can exercise political authority through the CCP. They may also elect and hold accountable members of the government, under the leadership of the CCP. Popular participation is thus both direct and indirect. Accountability of government officials is undertaken through elections and CCP leadership; accountability of CCP officials is supposed to be undertaken through CCP discipline, the constitutionality of which remains a lively subject of debate in China. 48 The CCP represents the people directly but may act only to further the fundamental substantive principles on which the state is founded. The people speak through the Party but act through the state. These are the fundamental ordering premises of Chinese constitutionalism. Within those premises it is important to underline the central importance of the CCP as the source of the interpretation of the fundamental ideology of the system itself. 49 It is common in the West to dismiss the development of ideological positions of the CCP. 50 It has been easy to treat the Party Line as both transitory and mere ideology. The West, more comfortable with the seeming greater solidity of the governmental apparatus, tends to look for policy elsewhere. But this tends to reduce the ability of the West to understand Chinese political 46 Id. 47 Discussed in and Keren Wang, The Emerging Structures of Socialist Constitutionalism with Chinese Characteristics: Extra-Judicial Detention and the Chinese Constitutional Order, Pacific Rim Law & Policy Journal, 23(2): (2014). 48 Well described in Philip C. C. Huang, The Basis for the Legitimacy of the Chinese Political System: Whence and Whither? Dialogues among Western and Chinese Scholars, VII Editor s Introduction, Modern China 40(2): (2014). Zhiwei Tong describes the debate among three camps universal constitutionalists (arguing for movement toward Western Style Constitutionalism), socialist constitutionalists (arguing for reform of the current system), and anti-constitutionalists (who view constitutionalism as a Western ideological project). See, Tong Zhiwei, Supplementary Explanation of the Concept of a Socialist Constitutional Government, gtiw.html. [Is this link correct:? It didn t go anywhere for me.] For anti-constitutionalist arguments, see, Yang Xiaoqing, A Comparative Study of Constitutional Government and People's Democracy, Red Flag Manuscripts, 10th issue of 2013, May For a useful graphic see Japan, Research Institute of Economy, Trade and Industry, The Debate Over Constitutionalism: Political Reforms at a Crossroads (2013), available 49 Cf. Douglas C. North, Institutions, Institutional Change and Economic Performance 111 (Cambridge University Press, 1990) ( Ideas and ideologies matter, and institutions play a major role in determining just how much they matter. Ideas and ideologies shape the subjective mental constructs that individuals use to interpret the world around them and make choices. Ibid.). 50 Discussed in, The Rule of Law, The Chinese Communist Party, and Ideological Campaigns: Sange Daibiao (the Three Represents ), Socialist Rule of Law, and Modern Chinese Constitutionalism, 16(1) Transnational Law & Contemporary Problems (2006).

10 10 activity and state policy, 51 while serving as a reflection of the self-absorption of Western analysts and the construction of their own inward looking analytical universe. 52 This tendency has important ramifications. On the one hand, it takes the ideological campaigns of the CCP too literally. As a consequence, the analysis tends to minimize the importance of this theorization.... On the other hand, Western style analysts do not take CCP ideology literally enough, but as invariably little more than the politics of individual power by other means. It follows from either of these stances that ideology serves merely to mask the arbitrariness of the CCP s culture of exercising personal power without limits. 53 Yet what the West understands as ideology are better understood as expressions of the application of structural limits on political policy grounded in the basic tenets of the structural political cosmology of the Chinese state, one that is identified in the Chinese Constitution itself. 54 It is in this way that one can understand the role of Marxism as a grounding set of principles of the organization and operation of the state. 55 These premises affect both the way in which China comes to approach the substance of CSR and the way in which it views the character of the rights protected, that is, where 51 Jianglong Wang and Wei Wu, Ideological Work as Conflict Management: A Dialectical Approach in Chinese Communication Campaigns, Intercultural Communications 7(1):83-98 ( ). 52 Randy Peerenboom has nicely described the difficulties of ignoring ideology in Chinese constitutional discourse: While most commentators portray political ideology as the main obstacle to establishing rule of law in China, the biggest obstacles at present are systemic in nature and involve the lack of institutional capacity. In the future, economic factors, the interests of key institutional and social actors, and ultimately political ideology (if China remains a single-party socialist state) are likely to exert the most influence on legal reforms and their likelihood of success. Randall Peerenboom, What Have We Learned About Law and Development? Describing, Predicting, and Assessing Legal Reforms in China, 27 Mich. J. Int l L. 823, (2006). 53, The Rule of Law, the Chinese Communist Party, and Ideological Campaigns: Sange Daibiao (the Three Represents ), Socialist Rule of Law, and Modern Chinese Constitutionalism. Journal of Transnational Law and Contemporary Problems, Vol. 16, No. 1, 2006.(SSRN version at ). 54 Zhonghua Renmin Gongheguo Xianfa, preamble (1982 as amended) ( Under the leadership of the Communist Party of China and the guidance of Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory and the important thought of Three Represents, the Chinese people of all nationalities will continue to adhere to the people s democratic dictatorship and the socialist road ). This is a critical foundation of Article 1, which provides: The People s Republic of China is a socialist state under the people s democratic dictatorship led by the working class and based on the alliance of workers and peasants. 55 This is well explained recently by Liu Yunshan: Marxism is the fundamental guiding ideology for the development of the Party and government and is the ideological basis for ensuring that the whole Party and all the people of the country make a concerted effort. Therefore, we must always uphold the position of Marxism as our guide. Marxism is an open theoretical system that keeps up with the times and can only play its role as a guide to practice when combined with the realities in the country. While carrying out reform and opening up we have consistently followed Marxism-Leninism and Mao Zedong Thought and constantly worked to free our minds, seek truth from facts and keep up with the times. Liu Yunshan, Working Out a Path of Socialist Modernization with Chinese Characteristics, Quishi Journal (English edition) Vol. 3(2) April 1, Available

11 11 those rights are located and who is empowered to vindicate them. The result is a dissonance between Chinese and Western (and global to some extent) approaches to the discourse of CSR that masks some substantial overlap in functional objectives and overemphasizes the differences in the substantive focus of CSR efforts. To understand CSR in China, one must understand the ideological line of the CCP as the vanguard element of the Chinese political order. And to understand that ideological line, one must return to the current foundation of the political framework within which both state and Party are organized. The best expression of the foundation of that line was made in 1984 by Deng Xiaoping: socialism is meant to create the conditions for the production of wealth sufficient to make it possible to produce the conditions when communism is attainable, a premise that requires the state, through its vanguard communist party to ensure that all socially productive forces are most efficiently deployed for the production of wealth, which is the prerequisite for communism. 56 The implications are clear. The political objective of the CCP is ultimately to build a communist society. That project requires the development of socialism. But socialism is understood not in its static and European sense, but as a dynamic process characterized by economic development that is meant to distribute the fruits of rising prosperity to all sectors of the Chinese population. Indeed, socialism is understood as the process through which so much wealth is produced and available that the Communist ideal is then achievable (in the future). Given this foundation, it follows that the primary objective of the CCP, and thus of state policy, is economic prosperity and development. The principal objective, then, of all of the social institutions, public and private, must be bent toward the great project of creating prosperity. Everything else assumes a secondary role. Unless an objective or policy can be tied to this long-term project of socialism the elimination of poverty for everyone it does not support socialist modernization. It follows that such objectives would be of lesser interests to officials in enterprises, especially officials in state-owned enterprises. It is a short step from the grounding policy of socialist modernization to the specifics of the more recently refined CCP lines of scientific development and harmonious society as guiding principles that significantly affect state policy and indirectly structure enterprise approaches to CSR. Central to Chinese policy is the CCP s harmonious socialist 56 He famously explained: What is socialism and what is Marxism? We were not quite clear about this in the past. Marxism attaches utmost importance to developing the productive forces. We have said that socialism is the primary stage of communism and that at the advanced stage the principle of from each according to his ability and to each according to his needs will be applied. This calls for highly developed productive forces and an overwhelming abundance of material wealth. Therefore, the fundamental task for the socialist stage is to develop the productive forces. The superiority of the socialist system is demonstrated, in the final analysis, by faster and greater development of those forces than under the capitalist system. As they develop, the people s material and cultural life will constantly improve. One of our shortcomings after the founding of the People s Republic was that we didn t pay enough attention to developing the productive forces. Socialism means eliminating poverty. Pauperism is not socialism, still less communism. Deng Xiaoping, Build Socialism With Chinese Characteristics (June 30, 1984). Available

12 12 society ( 和谐社会 ) policy. 57 The six main characteristics of a harmonious society, and thus, the framework for Chinese policy in the social and economic sphere at the operational level, include (1) democracy and the rule of law, (2) fairness and justice, (3) integrity and fraternity, (4) vitality, (5) stability and order, and (6) harmony between man and nature. 58 These will tend to frame, as well, approaches to CSR, precisely because these principles and the ideological structures that produce them, are meant to define the social in corporate social responsibility within China. To be effective, then, notions of responsibility grounded in Western terms will need translation into this framework if they are to be incorporated within these policies. Alternatively, global CSR objectives (if not the language) would have to build on these ideological foundations in ways that are compatible with it. Harmonious Society notions require a framework for implementation, one that is supplied through the scientific development 59 of the mechanics of socialist modernization. Though perhaps little noticed in the West, that framework has been developed though the socalled five coordinations ( 五个统筹 wuge tongchou), 60 a directive on perfecting the socialist market economy issued in 2003 at the 3rd Plenary Session of the 16th Central Committee of the CCP. 61 The importance of the five coordinations is the structuring of policy coherence in the construction of development policy which ensures economic development that adheres to the objectives of socialist modernization in the approaches of the Chinese government to both internal and external development policy. The five coordinations seek to express the five critical aspects of state policy toward development: that is, urban and rural development, regional development, economic and social development, the harmonious development between man and nature, domestic development and opening-up. 62 The five coordinations are especially useful for 57 The Harmonious Socialist development policy is embedded in the CCP s political line of scientific development. The Scientific Concept of Development means putting people first and aiming at comprehensive, coordinated and sustainable development. Scientific Concept of Development & Harmonious Society, 17th National Congress of the Communist Party of China, 2007, China.org. Available 58 Id. Operationally this was interpreted to mean that, for states (as well as for SOEs and likely private enterprises working in China) the baseline approach to policy (and thus to CSR) would target the following areas. First, there is an emphasis on developing rule structures to meet policy obligations (and avoid discretionary power in the hands of individuals). Second, there is an emphasis on avoiding exacerbating income gaps between rural and urban areas. Third, there is to be an emphasis on improving public services including education, medical care, employment, and social security. Fourth, there is an emphasis on contributing toward popular education in patriotism, honesty, and friendliness. Fifth, the emphasis is on developing stability in markets and the public sector by improving the systems of public administration and protecting the social system. Sixth, there will be a greater sensitivity to environmental sustainability. Id. 59 See supra text and notes Discussed in Shing Kit Wong, The Five Coordinations, Law at the End of the Day, March 30, Available See Anonymous, Hu s on First: Part 2 Long Road to Reform, Asia Times, Nov. 18, Available 61 See, Ye Yumin, Richard LeGates, Coordinating Urban and Rural Development in China (Cheltenham, UK, Edward Elgar, 2013), p " 五個統籌 " 與中國特色信息化道路 ( Five-Coordinations" and the Road of Informatization with Chinese Characteristics ), 姜奇平汪向東.

13 13 understanding the strong element of harmonization and complementarity in Chinese development policy, both as a matter of internal development and as a basis for determining the quality and direction of Chinese participation abroad and in the development of international norms. 63 The five coordinations help frame the structures for good corporate citizenship as essential elements of the national objectives of development producing a harmonious society. As such, CSR would tend to be framed, at least within China, on the basis of the operationalization of these ideological lines. 64 The emphasis is on development that adds to the material living conditions of the population. It is far less focused on those rights the West has come to associate with civil and political rights. 65 To achieve objectives of the five coordinations, enterprises must focus first on the production of wealth through its financial success to an increase in the people s material conditions, and in this way to contribute also to the rapid and stable development of the national economy. 66 The most direct way is to maximize profit, which can be achieved by 63 " 统筹就是兼顾, 兼顾就是协调 努力做到 五个统筹, 兼顾到改革发展稳定的各个方面, 兼顾到中国特色社会主义事业发展的各个领域, 兼顾到全面建设小康社会的整体目标和目的, 其结果就是全面 协调和可持续发展, 以及社会的安定与和谐 人的全面发展 ("Unified planning means to give full consideration, and to give full consideration means to coordinate and balance. We must strive to achieve the 'Five Coordinations' by giving full consideration to all aspects of reform and maintaining stability, and to all areas of the Chinese socialist development; additionally, we must fully consider all means and objectives in building an adequately prosperous society for all. The outcome would amount to a compressive, coordinated and sustainable developmental framework that not only promotes social stability and harmony, but also advances overall human conditions.") (From 五个统筹 即统筹城乡发展 统筹区域发展 统筹经济社会发展 统筹人与自然和谐发展 统筹国内发展和对外开放 :39). 64 See State Owned Assets Supervision and Administration Commission (SASAC), Guidelines to the State-owned Enterprises Directly under the Central Government on Fulfilling Corporate Social Responsibilities. Available [this link doesn t work] and discussion, infra Section III, infra. 65 This is bound up in the concept of socialist modernization. 66 This paragraph draws on 五个统筹 是科学发展观的根本 方法, (Nov. 17, 2008), available (Wang Zhengguo Five Coordinations is the fundamental method of scientific concept of development); Kin-Man Chan, Harmonious Society, ( ) available 中共中央关于制定 十 一五 规划的建议, Xinhuanet.com (Oct. 18, 2005) available (CPC Central Committee on the Development of the 11th Five Year Plan); 中国共产党 十六届三中全会公报, (Third Plenum of the Communist Party of China Bulletin) (Oct. 14, 2003) available 五个统筹, (Five Coordinations Editor) available 五个统筹与 西部开发 _ 以贵州省为例, (The Five Coordinations and Western Development, the Casae of Guizhou Province) available 什么是五个统筹, (What is the Fice Coordinations? April 8, 2008) available 以五个统筹为指导 _ 增强旅游竞争 力, (The Five Coordinations as a guide to enhance tourism competitiveness; Huizhou Social Sciences 2004), available 企业应承担的 八 大社会责任 ; 中国经济周刊, -- 专访全国政协常委 国务院参事任 玉岭中国经济周刊 记者 黄乐桢 / 北京报道 (China Economic Weekly, Interview CPPCC Standing Committee, the State Department counselor Ren Yuling) (Oct. 24, 2005) available 发挥 人 大政治优势依法推进科学发展, ( Congress play political advantage by