Social Corporate Responsibility and Chinese Investments in Africa
We will kick off our first session in this semester with the topic of Chinese investment in Africa. This issue is important for two reasons: Firstly, Chinese growth and development is re-shaping the international power balance and secondly, the Chinese model has brought the international norms which have been characterized by Western values into question.
Industrialization and a growing population in China are posing major challenges to domestic natural resources. Environmental change is a major global threat which can only be tackled when developing countries choose different growth patterns from the developed countries. Economically successful countries like China and India should question their function as role-models as their rapid industrialization came at a great cost to the environment. If African countries continue to follow in the footsteps of China and take no action to curtail the negative environmental effects of industrialization, their fragile water supplies and other natural resources are at risk. Additionally, there is a direct risk to the people as interactions with pollutants could lead to health defects.
There is an increased influx of Chinese goods and labor causing unemployment. To ensure adequate training and swift execution, Chinese companies often prefer to bring their own labor force. What at first may seem like collaboration between nations , in fact, is not. By supporting foreign governments, China is stabilizing their international power stance and gaining a significant number of allies. Geostrategic calculations may also explain why China does not react to human rights violations and corruption in their area of action. China has always followed a strict policy of non-intervention and respect of state sovereignty. Some critics, however, point out that social responsibility demands accountability.
According to Dambisa Moyo, many people in emerging markets believe that there is a split occurring between what people believe in terms of politics and economics in the West and what people believe in the rest of the world. There appears to be a real challenge to the Western ideological system by the Chinese system. While the Western system has been characterized by liberal democracies, free-market capitalism and priority on political rights, the Chinese system promotes state-led capitalism, de-emphasizes democracy and prioritizes economic rights. Moyo argues that the success of the combination of liberal democracy, capitalism and political rights is an illusion in emerging countries. Where people live on less than a dollar a day, Moyo reasons, people don’t believe in “Give me freedom or give me death”, they believe in systems that increase their living standards. China has been providing more wealth, better education, more health care, strong infrastructure and increased equality to its citizens.
At the heart of this complex topic lies the question whether democracy really is a pre-requisite for wealth, which is an assumption that has marked the UN strategy, or whether it is the other way around and we can disregard democracy in a first step to push for economic development. Indeed, much research has shown that economic development is necessary for democratic resurgence and/or stability. Especially in the case of an external pressure for democratization, which is not thorough, the risk for the emergence of an illiberal democracy is high. According to Freedom House, already 70% of all democracies are illiberal.
Participants will be expected to tie this case study to the broader topic of regulating social corporate responsibility and whether states should be accountable for their companies, and if so, how.. Delegates need to consider the nature of the international power balance. Many companies have more economic power than states, thus, their influence on weak governments can be very great and threaten said governments. The United Nations Global Compact is an important step towards sustainable and socially responsible companies, but is too weak on its own.