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Green guidance on the way for Chinese companies operating abroad

By Ding Qingfen | China Daily | Updated: 2013-03-01 10:12

China is to improve efforts to guide and help domestic investors in shouldering corporate social responsibility and protecting the environment abroad, according to the Ministry of Commerce.

The pledge comes with the nation's overseas direct investment set to see rapid gains.

As part of the commitment, the ministry, together with the Ministry of Environmental Protection, on Thursday launched the Guidelines on Environmental Protection for China's Outbound Investment and Cooperation, aiming to standardize the overseas activities of Chinese investors on environmental protection.

More overseas Chinese projects are being blamed for destroying the local environment as the world's second-largest economy raises a new wave of investment abroad amid the European debt crisis.

Yao Jian, spokesman for the Ministry of Commerce, said during a Beijing press briefing on the launch of the guidelines that Chinese companies and investors still have a lot to improve on in overseas markets, in particular environmental protection.

Yao said good implementation of corporate social responsibility is of great significance to Chinese companies, as it helps them "strengthen their core competitiveness and soft power in the global market".

The ministry will continue to improve rules and regulations focusing on Chinese companies' corporate social responsibility abroad, he said.

Bie Tao, deputy director general of the Department of Policies, Laws and Regulations with the Ministry of Environmental Protection, said the guidelines cover a wide range of practices on how to respect the culture and laws related to environment protection abroad.

They urge domestic companies to set out their own environmental management strategy, drawing up relevant plans and training systems, and regularly issue environmental information.

"Chinese companies will not reap the benefits if they fail to protect the environment, and address related concerns to local communities abroad," Bie said.

The guidelines follow a series of other measures and policies standardizing China's corporate social responsibility practices launched by the central government in recent years.

China's overseas direct investment has seen remarkable growth in the years since the 2008 global financial crisis. Last year, its outbound direct investment in the non-financial sector rose 28.6 percent year-on-year to $77.2 billion, the Ministry of Commerce said.

Last year, Hong Kong, the ASEAN region and the European Union ranked the top three regions worldwide in terms of outflow of investment from China.

Chen Lin, commercial counselor with the Department of Outward Investment and Economic Cooperation with the Ministry of Commerce, told China Daily: "The strong growth momentum (for China's ODI) will be sustained for a long period of time, considering China's economic expansion and growing corporate demand."

But with this growth, operational risks, labor conflicts and appeals have frequently troubled Chinese companies abroad.

Chi Changhai, vice-chairman of the China International Contractors Association, said improvement of corporate social responsibility will help ease overseas risks, smoothing the way for China to "go abroad".

Yao said the majority of Chinese companies have been committed to shouldering their social responsibility, localizing their business and creating benefits for local societies.

"Chinese investment projects abroad have created a large number of jobs and helped train local talent, upgrading local industries and stimulating the local economy," he said.

In 2011, Chinese companies owning overseas businesses paid taxes of more than $22 billion, employing 1.22 million people abroad.

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