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In a recent post on China’s Human Flesh Search engine, I discussed how the behavior of Netizens in China can be harnessed for good and ill to solve social problems. Occasionally, the online forums in China become vitriolic (much as they do anywhere) for reasons related to China’s strong sense of cohesiveness (which we describe in Supertrends of Future China as a key driver of China’s major trends).

The following article, reprinted (and updated) from my newspaper column on May 23, details how some Netizens have a new target for their anger: Governments, people, and companies that do not donate enough for earthquake relief. While the outpouring of praise for donating companies is generally strong, the praise is reserved mostly for Chinese companies, while the anger is often directed at foreign-related entities.  While there are exceptions when it comes to foreign individuals, the reaction to foreign companies’ donations is often negative even in the face of a large contributions.

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In the aftermath of the Sichuan earthquake, the generosity and compassion of corporations has been put on display by using donation lists in building lobbies, office memos, online bulletin boards, and newspaper articles.

While corporate donors in many foreign countries, if they are listed at all, might be shown alphabetically, here the common practice is to rank organizations together with the amount of money they give and circulate the rankings for all to see.

As a form of peer pressure, this method seems very effective in China in encouraging contributions. But at the same time, lists of foreign corporate donations have caused controversy on China’s online forums.

In the days following the disaster, the netizen community quickly shifted to discussions about the donations of foreign countries and multinationals because the pre-earthquake controversies such as the Olympic torch relay and Carrefour were still unresolved. A new theme has been that there were insufficient earthquake relief donations by multinationals.

In a comment echoed on numerous online forums, netizen “Botage” wrote on Sina.com’s community page on May 15, “Why do foreign companies give so little? Take McDonald’s, KFC, Nokia… they give even less than Chinese companies, it is terrible.”

Another netizen on Sohu.com, “Zongq,” writes, “China has given these foreign companies and brands such a huge market and profits, but when something like the earthquake happens in China, we actually don’t see even humanitarian aid (from them).”

This has had some unfortunate implications for the multinational companies doing business in China, with some Chinese Netizens calling into question their commitment to Corporate Social Responsibility while Chinese companies are lauded for their generosity.

The wave of criticism about donations started against the US government, for donating only US$500,000 to the Chinese Red Cross when it had offered millions more in aid to Myanmar. (Editor’s note: The US also donated 10 million to the International Red Cross to be earmarked for China. In fact, aid to Myanmar was pledged but either not accepted or not delivered because of prevailing political conditions, whereas aid flowed to China much more easily: More here.)

And when it comes to foreign money, even China’s own are not exempt from online criticism: Basketball superstar Yao Ming was pilloried in the media and online forums for “only” offering half a million yuan until he quadrupled his donation. From there, debate extended to how much Chinese firms were giving and how little foreign firms seemed to be giving. Is this criticism justified based on the facts?

Chinese companies have undoubtedly shown their support for the unfortunate in Sichuan. Seventy-five Chinese-listed companies have contributed more than 563 million yuan, nearly US$81 million, as of May 19, as reported by financial news portal Hexun.net (partial English translation here). There is no precedent to compare the actions of the national firms as a group, but donations by 75 large foreign firms, based on a similar ranking list published on the Chinese Website manage.org.cn, have reached about half the national firm’s figure, 350 million yuan as of May 20. Both groups likely have much more to give as time goes on.

One firm in particular, the State Grid Corporation of China, already contributed 76 million yuan in cash, almost US$11 million, and almost twice that in non-cash aid, to be recognized as China’s largest donor.

This firm also topped the Hurun Report’s 2008 Corporate Social Responsibility Ranking (English version, 2007 only, here) and is a paragon of how Chinese would like national corporate citizens to act. Another large donor is China Mobile which, in addition to a large cash donation of 86 million yuan, has also committed to donating possibly billions of yuan to mobile phone subscribers in the afflicted regions by automatically increasing every phone’s account by 100 yuan if it falls below a 50 yuan threshold. Large Chinese banks and insurance companies have also contributed significantly, such as the Bank of China’s 64 million yuan cash donation. Larger Chinese firms are typically donating at the 10 to 20 million yuan levels. Many foreign firms, contrary to netizen opinion, are well within this range.

For example, KFC has donated 15.8 million yuan, while Nokia donated 10 million yuan plus thousands of free mobile phones. The largest foreign donations to date, 30 million yuan each, come from Samsung and Nike, but GE, Chevron, GSK, Toyota and others all have made donations at the 10 million yuan level or above. These are no small amounts by any standard.

It may therefore be said that foreign company donations in total are not as large as those of Chinese national firms, but should they be?

In the Hurricane Katrina disaster in the US in 2005, US corporations donated more than US$547 million, according to USAToday, while foreign firms contributed very little, most of the donations coming to the State Department via the donor countries directly.

Meanwhile, the small donation by the US government aside, US firms’ donations in China as of May 20 have totaled more than US$25 million, a significant amount by just one country’s corporations.

The time and distance factors should also be considered in evaluating foreign firms’ responses to the earthquake. It takes more time to communicate with head offices abroad, plan an appropriate assistance package, and select the best channels to deliver relief.

Many foreign firms likely elected to wait until the initial confusion after May 12 had settled down: Cisco Systems, initially making a donation of US$250,000, generously increased its commitment to more than US$ 1 million several days later, once the scope of the tragedy became known.

In the rush to be the first and highest on the lists, is it possible some people are losing sight of the real purpose of giving in times of need?

Foreign firms are certainly aware of the benefits of being in the Chinese market and take seriously their responsibilities as good corporate citizens, but they must be allowed the time to make a measured response and not be held to the same standards as companies in the country suffering from the disaster. And the most important point of all: no matter the source of the aid, it is for a common good and I think that nobody can disagree on that.

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Notes:

1 US$ = 7 RMB

The best resource I found for a total list of donations that is semi-regularly updated can be found here.

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About the author

Jason Inch

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