China is, without a doubt, on a fast track to ‘development’ with an astonishing US$3.2 trillion in foreign reserves. But inequality, particularly rural and urban, is extreme with an estimated 150 million people living below the United Nations poverty line of less than $US1 a day. China’s growing wealth has resulted in multiple international aid agencies (including Australia’s Agency for International Development) pulling out of China. So who is going to pick up the slack and help support 150 million people living in extreme poverty?
I don’t want to over exaggerate the influence that aid agencies have had on combating poverty in China. The Chinese government has done a remarkable job of lifting millions of people out of poverty and they will not stop achieving this, but 150 million people still living in extreme poverty is a huge number. As with most issues in China it is the scale that makes them so significant.
Since working in CSR in China I have noticed a further shift towards engaging corporations to contribute to NGOs who work in poverty alleviation. This concerns me for two main reasons.
- CSR in China is currently not mature enough to significantly contribute to poverty alleviation and is still often used as a tool to improve companies guanxi 关系 (relationship) with governments.
- Unless there is a shift in the way we view capitalism, corporations will never view themselves as part of a social security system.
Corporations in China, both international and domestic, will not fund NGOs or GONGOs (Government Organised Non Government Organisations) to the extent that is needed to support to poorest of the poor. This is not to say that companies do not engage in successful community investment, they do, but it is by no means at the level necessary to significantly contribute to poverty alleviation. At this stage corporations can do more to alleviate poverty by focusing on improving their internal supply chains and employee working conditions.
International aid agencies in China have worked with (and therefore supported) domestic NGOs. Civil society in China, or the lack of it, is a real problem. Civil society, including community organisations and NGOs has the potential to play a huge role in poverty alleviation. However local NGOs are getting little support and now that aid agencies are leaving the situation for some is dire. I have spoken to a number of NGOs in China who are desperate to engage companies under the guise of CSR to fund their organisations. One of these NGOs was supported by an international aid agency that has now, in an official capacity, pulled out of China. It is my feeling that unless you are an international NGO or a GONGO in China you are going to struggle to get support under the guise of Corporate Social Responsibility.
So who will provide enough support to domestic civil society that in turn support the most disadvantaged and poor?
Well, in my opinion, it will not be CSR departments of local and international corporations. Ultimately the responsibility lies with the government. The Chinese government have the money but currently, still lack the capacity and infrastructure to develop a social safety net that will support those living in extreme poverty. The issue around the government not supporting NGOs from a political perspective is also a contributing issue. The domestic philanthropy sector is rich (and making some progress) but riddled with challenges ranging from weak laws and regulations to outlandish corruption. China may get there in the end, but between now and then, the holes in the social security system are here to stay.
4 Responses to China’s moth-eaten social safety net: Who will catch the poorest of the poor? Not corporations.
kapookababy November 12, 2011
I’m becoming more and more aware of this missing ‘community spirit’ in China. You can’t do anything in China without the government’s permission, and they view anything that isn’t business/making-money related as highly suspicious. And it really makes such a difference to a society when that society is not able to organise itself to achieve things for a ‘higher purpose’. I know the government has done this to stamp out political dissent, but in the process they have dampened any kind of grassroots environmental or charitable/community action which I’ve realised is so important for any society.
Emily D'Ath November 15, 2011
Yeah I totally agree. The other elephant in the room is the fact that regulation in China is extremely weak because and also barely enforced. And no one really knows what to do about it.