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| Dealing with Multinationals |
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Zhao Jinping
The role of multinationals in The economic and social behavior of transnational companies is judged on three main issues. Firstly, whether these companies obey the laws and regulations of the host country. This is a basic rule, necessitating a bottom line the companies must adhere to. So far, most of the more than 200,000 foreign-invested enterprises in Secondly, how far the companies pursue the localization of their business operations. This is an important criterion for measuring their contribution to the local economy. Generally foreign companies have made great progress in localization, which has promoted the upgrading of It helps improve Chinese products' competitiveness and plays an important role in aiding the country's economic reforms. But different enterprises have different levels of localization. Thirdly, whether these companies actively shoulder social responsibilities. Enterprises' social responsibility mainly means foreign enterprises should approach their relationships with domestic companies and other groups in a responsible way. It is not simply a negation of traditional enterprise values driven by the desire to maximize profits. It requires enterprises to be responsible for all related parties, help protect their rights and interests and drive sustainable development in economic, social and environmental fields. Transnational corporations that perform well on these three issues play an active role in promoting the construction of a harmonious society. Their conduct provides a good example for their foreign peers and they can offer domestic companies a model for how to improve management and upgrade social responsibility awareness. At the same time, the government also needs to enhance its responsibilities on the following aspects to guarantee a healthy environment for all enterprises. The need for scientific development should be given greater emphasis. A rational evaluation and encouragement mechanism should be built to regulate the behavior of regional governments. Some local governments' blind pursuit of economic growth has resulted in damage to the environment and land wasted this has to be stopped. A good policy environment should be provided for enterprises, multinationals included. Last but not least, the government needs to complete the redefinition of its functions. It needs to enhance information services and provide a better investment environment. The author is deputy-director of Foreign Economic Studies at the State Council's (
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