Chi­nese firms urged to act more re­spon­si­bly to gain re­spect

China Daily (Canada) - - EXPATS -

in London ce­cily.liu@mail.chi­nadai­

Chi­nese com­pa­nies need to cham­pion so­cial re­spon­si­bil­ity in their global ex­pan­sion if they wish to gain world­wide re­spect, said Xiang Bing, Found­ing Dean and Pro­fes­sor of China Busi­ness and Glob­al­iza­tion at Che­ung Kong Grad­u­ate School of Busi­ness in Bei­jing.

By gain­ing such re­spect, China and Chi­nese firms can take a lead­ing role in global busi­ness as it re­con­fig­ures and play a sig­nif­i­cant role in ac­cel­er­at­ing the cre­ation of a good global gov­er­nance sys­tem, Xiang said.

“Global gov­er­nance was cre­ated by US dom­i­nance, but now the Chi­nese gov­ern­ment needs to con­trib­ute be­cause as China in­creas­ingly glob­al­izes, its com­pa­nies, peo­ple and in­ter­ests are in­creas­ingly in­ter­twined with the global en­vi­ron­ment,” Xiang said in London re­cently.

“And if China can make the most of cur­rent op­por­tu­ni­ties to solve global prob­lems it will truly be­come a re­spected leader. It can lead the cre­ation of a new busi­ness civ­i­liza­tion that no longer puts prof­its be­fore ev­ery­thing else.

“The val­ues that China can bring to global devel­op­ment are not mil­i­tary or eco­nomic power, but lead­er­ship in busi­ness ethics. China can con­trib­ute to cre­at­ing gov­er­nance that will bring rules and cer­tainty to global busi­ness.”

He has been a keen ad­vo­cate for the con­cept of a new busi­ness civ­i­liza­tion over the years, and talked with many Chi­nese busi­nesses ex­ec­u­tives about the idea, as alumni of Che­ung Kong Grad­u­ate School of Busi­ness, China’s first pri­vately funded and fac­ulty-gov­erned busi­ness school, founded with the sup­port of the Li Ka Shing Foun­da­tion.

Xiang, who gained a bach­e­lor’s de­gree in En­gi­neer­ing from Xi’an Jiao­tong Univer­sity and a PhD in busi­ness ad­min­is­tra­tion from the Univer­sity of Al­berta in Canada, was one of the seven found­ing fac­ulty mem­bers of China Europe In­ter­na­tional Busi­ness School in Shang­hai and a pro­fes­sor of ac­count­ing at the Guanghua School of Man­age­ment at Pek­ing Univer­sity be­fore join­ing CKGSB.

One big prob­lem with the China-US re­la­tion­ship is that while the two coun­tries are pow­er­ful economies they have not agreed to work to­gether on many is­sues, such as cre­at­ing a co­her­ent global trad­ing en­vi­ron­ment.

For ex­am­ple, there are var­i­ous trade pacts led sep­a­rately by the US and by China that pro­duce a sys­tem that is less ef­fi­cient than if the two coun­tries col­lab­o­rated to cre­ate a co­her­ent global trade en­vi­ron­ment, Xiang said.

The US led the cre­ation of the Trans-Pa­cific Part­ner­ship, a free trade agree­ment signed by 12 coun­tries ac­count­ing for 40 per­cent of global GDP. The agree­ment does not in­clude China.

The other US-led key free trade agree­ment is the Transat­lantic Trade and Investment Part­ner­ship, pro­posed be­tween the Euro­pean Union and the US, and which is seen by the US as a com­pan­ion agree­ment to the TPP. This also ex­cludes China.

China led the cre­ation of the Asian In­fra­struc­ture Investment Bank to fund the build­ing of in­fra­struc­ture in the Asi­aPa­cific re­gion, aim­ing to pro­mote con­nec­tiv­ity that would im­prove re­gional trade and investment ties.

The bank has 37 found­ing mem­ber states but did not at­tract sup­port from the US.

Xiang said such di­vi­sion of trade into camps is a hin­drance to global trade and re­sults from dif­fer­ent views that the US and China have of trade or­ga­ni­za­tions such as the World Trade Or­ga­ni­za­tion.

One ma­jor root cause of the trade di­vi­sions be­tween the US-led side and the China-led camp for trade is the dif­fer­ent un­der­stand­ing the two coun­tries have about the im­pli­ca­tions of China’s join­ing the or­ga­ni­za­tion in 2001.

In those days the US wanted to gain cer­tain ben­e­fits by sup­port­ing China’s mem­ber­ship such as gain­ing more ac­cess to China’s mar­ket, en­cour­ag­ing China to take on more global re­spon­si­bil­ity and en­cour­ag­ing it to sup­port the US on im­por­tant global is­sues, Xiang said.

A decade later, when the US as­sessed that many of th­ese ex­pec­ta­tions had not been achieved, the US started to lead dis­cus­sions on trade agree­ments ex­clud­ing China, such as the Trans-Pa­cific Part­ner­ship and the TTIP, Xiang said.

An­other trig­ger point for the US to welcome China into the global trade sys­tem is the threat that China brings to its global promi­nence.

For ex­am­ple, three years ago dur­ing free trade agree­ment dis­cus­sions be­tween China, Ja­pan and South Korea, Ja­pan pro­posed the idea of set­tling China-Ja­pan trade in ren­minbi.

“This is a trig­ger point of the US be­com­ing alert, be­cause the US would think there are many other Asian coun­tries very keen to set­tle their trade with China in ren­minbi di­rectly, which means less use for the US dol­lar.”

hese ten­sions all re­sult from a re­con­fig­u­ra­tion of global trad­ing sys­tem, which is an ex­ten­sion of the frac­tures from the China-US re­la­tion­ship, Xiang said.

“In the past when the US said yes, no one could say no, which formed the ba­sis of a global gov­er­nance sys­tem, but this is no longer the case.”

So within the new global en­vi­ron­ment, there is a lack of over­all gov­er­nance.

If solv­ing the US-China is­sue is the key to cre­at­ing the foun­da­tions of a new global gov­er­nance sys­tem, then Xiang’s sug­ges­tion is for the Chi­nese gov­ern­ment to en­cour­age key US multi­na­tional firms to lobby for bet­ter US-China re­la­tions.

China can con­trib­ute to cre­at­ing gov­er­nance that will bring rules and cer­tainty to global busi­ness.”

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