China CSR Watch

By China CSR Watch (www.csrcsr.com)

Three Chinese companies, China Mobile, Haier, and Lenovo, made into Business Week’s 14 Asia’s most admired companies. Other winners are Canon, Nintendo, and Toyota from Japan; NHN, Posco, and Samsung Electronics from Korea; Singapore Airlines and Singapore Telecom from Singapore; and HDFC, Infosys, and Wipro from India.

“There’s no shortage of Asian companies that have prospered thanks to a laser-like focus on their home markets. But what wins enough fans to land on BusinessWeek’s list of most admired companies in Asia is success overseas,” writes Bruce Einhorn, correspondent from Business Week.

Sources (in English and Chinese)
Business Week: http://www.businessweek.com/globalbiz/content/jul2007/gb2007076_238945.htm
Sina.com: http://tech.sina.com.cn/it/2007-07-10/14551607944.shtml

By China CSR Watch (www.csrcsr.com)

According to the new Income Tax Law of The People’s Republic of China for Enterprises to be effective on January 1st 2008, China will four-fold its tax deduction for CSR donations from 3% to 12% of the annual profit. In other words, up to 12% of the profit is tax free as long as it is donated to CSR.

“In the first draft of the law, the tax deduction for CSR donation has been set to 10%. This revised final version listens to our feedback and added another 2%. It will surely help the CSR work in China, especially our education industry,” said Mr. WANG Xiaocun, a Chinese lawmaker and head of Zhejiang Industrial University.

The previous rate of 3% was set in the early version of the law issued in 1993.

The new tax law coming next year will also unify the income tax rate between domestic companies and foreign-invested companies to 25%. To attract foreign capitals, China used to grant foreign-invested companies huge tax incentives at around 15% while many domestic companies shield the tax burden at 33%.

Sources (in Chinese):
China Youth Daily: http://business.sohu.com/20070704/n250899398.shtml
China philanthropy Times: http://news.sohu.com/20070320/n248850993.shtml
China Education Daily: http://news.e21.cn/html/2007/jygj/163/20070317090031_11740932311585814045.htm

By China CSR Watch (www.csrcsr.com)

Although nearly all MNCs publish CSR report, Ford may well be the first to publish CSR reports specially for China. And not only once, but twice.

October 18th 2006, Ford China published its second CSR report detailing its CSR efforts from 2003 to 2005. Ford China published its first CSR report in China in 2002 about its CSR achievement from 1992-2002.

The billingual Ford CSR report can be downloaded here: Ford China CSR Report on ford.com.cn

Sources (in Chinese):
Xinhua: http://www.xinhuanet.com/classad/zxft/20061018/index.htm
Sina Foreign Management: http://leadership.jrj.com.cn/news/2007-06-29/000002373777.html
Sina.com: http://finance.sina.com.cn/roll/20061017/0752979755.shtml

By China CSR Watch (www.csrcsr.com)

PetroChina published its first Corporate Social Responsibility report on February 28th 2007, in an effort to be more open and transparent to public to improve its image amid oil price gauging accusations and after some major accidents.

According to the report, “in 2006, PetroChina donated a total of RMB 80.11 million in disaster relief, 16.45 million in education, 80,000 PetroChina volunteers served more then 200,000 people.”

PetroChina, the second largest Chinese oil company ranked at 39th in the Fortune Global 500 list, has been plagued with major accidents in recent years. It was ranked 63rd, of all 64 companies evaluated, in the 2006 Fortune Accountability list with an accountability score of 3 out of 100.

In 2003, a blowout of its natural gas well in Chongqing province killed 243 villagers. In 2005, a blast in its oil chemical plant in Jilin province polluted the water system and halted the tap water supply of Harbin, a major city of 3.5 million residents, for 4 days, and directly resulted the resignation of head of the environmental protection bureau of China.

PetroChina has been trying hard to improve its record on safety.

“Compared with 2005, accidents with fatality were lowered by 25%, and fatality was reduced by 12%. However we are regret to see 3 major accidents happened and 21 lives lost,” stated in the CSR report.

PetroChina has been ranked number one in the Top 50 Corporate Social Responsibility Chart compiled by Hurun Report published April 2007.

According to Hurun Report, PetroChina has more than 1 million employees, 177.1 billion Chinese yuan tax payment, and 720 million donation from 2003-2006. PetroChina is a clear leader in corporate social responsibility in China. (According to PetroChina’s CSR report, it has 446,000 employees excluding external employees.)

Sources (in English and Chinese):
PetroChina English CSR Report: http://www.petrochina.com.cn/chinese/zrgg/Corporate%20Social%20Responsibility%20Report%202006.rar
163.com http://money.163.com/07/0411/13/3BQ74E1V00251RJ2.html
Huran Report: http://www.hurun.net/listcn62.aspx
Xinghuanet: http://news.xinhuanet.com/fortune/2007-03/22/content_5880218.htm
WTO Guide: http://chinawto.mofcom.gov.cn/aarticle/by/cb/200704/20070404614048.html
Chinanews: http://news.163.com/06/1114/02/2VRSKH01000120GU.html
Fortune: http://money.cnn.com/magazines/fortune/global500/2006/accountability/full_list.html

By China CSR Watch (www.csrcsr.com)

25 international and Chinese domestic companies were awarded the Best Corporate Image 2006 titles by Development Research Center of the State Council P.R.China, China Credit Research Center under Peking University, Sohu.com, and Guang Hua Media on January 29th 2007 in Beijing. However, the annual Best Employer title was left vacant.

“Employee relations is one of our key focus areas in our research criteria on corporate social responsibility. However, 2006 was the year that many employee relations incidents surfaced. This is a clear indicator that the public has shifted its attention from speed of economic development to the welfare and respect of individuals,” explained SHI Qisheng, general manager of Guang Hua Media.

The MNCs received these titles are Pepsi, Ford, HP, Coca-Cola, Lenovo, McDonalds, Motorola, Nokia, Loreal, Microsoft, Siemens, and Volkswagen. Siemens was also awarded the Annual Best Corporate Responsibility Company and Lenovo was awarded the Annual Best Management Company.

The organizers also published what claimed to be the first corporate image report in China, which can be downloaded at 2006 China Corporate Public Image Report (Chinese Version).

Sources (in Chinese):
Sohu.com
http://business.sohu.com/s2007/5180/s247803298/
http://business.sohu.com/20070129/n247915659.shtml
http://business.sohu.com/20070131/n247952872.shtml
http://business.sohu.com/upload/2006qyxx.doc

China CSR Watch (www.csrcsr.com) is an independent observer on corporate social responsibility (CSR) performance of multinational companies (MNCs) in China.

Our mission is to track/summarize/translate/analyze CSR performance of MNCs in China for the global audience. By bridging through the language barrier, we hope to provide objective information on global giants’ local CSR performance.