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SOEs Should Play a Leading Role in Social Responsibility Fulfillment

source:China WTO Tribune    date:2015-10-30 11:37:11

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As the “1” in the “1+N” top-level design of SOE reform, Guiding Opinions of the CPC Central Committee and the State Council on Deepening the SOE Reformhereinafter referred to as the “Guiding Opinions was officially released on September 13, 2015. This is a programmatic document in the new era to guide and promote the SOE reform, marking that the reform has entered a new historical stage. The Guiding Opinions mentions that “SOEs in the socialist market economy should play a leading role in social responsibility fulfillment”, which, as the prominent feature of SOEs under the socialist market economic reform background, has become one of the most important characteristics of the Guiding Opinions.

The Guiding Opinions has provided two requirements on SOE social responsibility fulfillment. The first is “SOEs in the socialist market economy should play a leading role in social responsibility fulfillment”, which, as the prominent feature of SOEs under the socialist market economic reform background, has become one of the most important characteristics of the Guiding Opinions. The second is that SOEs give full play to their leading role in social responsibility fulfillment and integrate the role with government capital allocation efficiency, optimized layout restructuring of state operated economy, and dominant position. The two requirements will become the basic positioning and guiding principles of SOE social responsibility fulfillment.

Setting Examples—the Consistent Requirement for SOEs Social Responsibility Fulfillment

In January, 2008, SASAC released Guidelines to the State-owned Enterprises Directly under the Central Government on Fulfilling Corporate Social Responsibilities and for the first time recognized the role central SOEs have played in the society’s harmonious development, which has laid a solid foundation for the in-depth development of central SOEs’ social responsibility fulfillment. Meanwhile, SASAC required central SOEs to “play a leading role in social responsibility fulfillment”, become the pillar of national economy and set good examples for all enterprises in China.

In September, 2011, SASAC released The Outlines of Harmonious Development Strategy for Central SOEs during the 12th Five-Year Plan Period and continued to require central SOEs to “play a leading role in social responsibility fulfillment, pursue the maximum economic, social and environmental value, try to set examples inlegal and honest business operation, resources conservation and environmental protection, and give full play to their role in the development of people-oriented harmonious enterprises, the national economy and all enterprises in China”.

On November 12, 2013, the 3rd Plenary Session of 18th CPC Central Committee passed Decision on Some Major Issues Concerning Comprehensively Deepening the Reform which provides that “social responsibility fulfillment” is one of the six major missions of the deepening reform of SOEs.

In December, 2013, the Central SOEs Social Responsibility Work Video Conference put forward the requirement “giving full play to the leading role in fulfilling social responsibility and making new contributions to the sustainable development of economic society”.

The newly released Guiding Opinions has shed light on SOE social responsibility fulfillment which has close connection with SOE reform and matches the tremendous increase of governmental capital allocation efficiency.

Volunteering Refers to the Higher Requirement for the Reform

Compared with the past, the Guiding Opinions highlights “volunteering”—SOEs should volunteer to perform social responsibility and set good examples. “Volunteering” means “taking initiative”, indicates that social responsibility is what the reform should incorporate and puts forward even higher requirements for the reform.

SOEs belong to all the people. Generally speaking, the appearance of SOEs is to shoulder social responsibility, for China’s SOEs came into being for major economic social responsibility purposes. In this sense, SOEs are born with social responsibility genes. Therefore, they have every reason to play a leading role in social responsibility fulfillment.

SOEs developed rapidly in the last SOE reform. As a result, a number of key enterprises with core competitiveness appear in domestic and international market competition. We could see from China’s top 500 enterprises in 2015that SOEs dominated the national economy. Meanwhile SOEs played an absolutely dominant role in Fortune Global 500 Companies and China’s top 500 enterprises in 2015.

It is important to solve the in-depth problem SOEs faces when they are becoming larger and stronger in the new round of reform. The in-depth problem is actually how to stick to the socialist market economy reform direction and promote the sustainable and sound development of economic society while further improving the operating efficiency of SOEs (namely how to strike a balance between efficiency and equality in the SOE reform process). This is one of the highlights in the new round of SOE reform.

 “SOEs should volunteer to perform social responsibility and set good examples”, which requires SOEs to take initiatives in social responsibility building.

Every SOE Should Take Initiative to Set a Good Example

Under the guidance of SASAC and the central spirit, SOEs have yielded great achievements in social responsibility fulfillment in recent years. Promoted by SASAC, most central SOEs have greatly improved their social responsibility management and the management system. Moreover, they continue to implement the harmonious development strategy, and their economic, social and environmental value creation ability has been enhanced tremendously. Furthermore, SOEs keep on strengthening the social responsibility capability building, which has boosted the team’s ability significantly. As a result, this has won the recognition from the Party Central Committee and the State Council, and the society has also spoken highly of it.

However, we should see that, as the social responsibility is integrated into the central SOE strategies and management, there is still great room for improvement in social responsibility management and practices as well as local SOEs’ understanding of social responsibility. Some local regulatory authorities haven’t included CSR in its important guiding work, and SOEs show uneven ability of social responsibility fulfillment. Therefore, it is difficult for them to “play a leading role in social responsibility fulfillment”.

To cope with the situation, local SOEs should reinforce their study to catch up and local regulatory authorities should strengthen the guidance to jointly improve the SOEs’ overall ability of social responsibility fulfillment. In this way, they could truly “play a leading role in social responsibility fulfillment”.

The deepening reform of SOEs is facing great challenges. “Playing a leading role in social responsibility fulfillment” will help enterprises to handle the relationship between reform and development, and strike a balance between efficiency and equality. Only if enterprises serve the whole picture of the national economic and social development could they themselves develop further.