As Chinese Companies Internationalize They Will Take on More Social Responsibility——Interview with Professor Christopher Marquis

By Jessica Xu

“My Chinese name is 孟睿思, and I’m a distinguished visiting professor at the University of Electronic Science and Technology of China”

ITM: Why did you choose to focus on Chinese history in your undergraduate and graduate studies?

Chris: Actually my interest in China started in high school.In my junior year, I took an Asian Studies class. Rare for high schools in the USA, the teacher had a Phd in China studies and as a result the focus of the class was predominately on Chinese history and culture. The teacher’s passion for the subject was contagious and had a big influence on my later interests. In my fourth year of high school I was able to do an independent study on Confucianism, and learned about Confucius and Confucian philosophy. That was not only a rewarding educational experience, but also helped me get into college. Originally I was on the wait list for the college I ended up attending – the University of Notre Dame. But after I sent them the paper that I wrote on Confucianism, they ended up admitting me. In college, I initially decided that maybe I should try to make a career of studying China and majored in history, with a particular focus on China. While for a number of years I got away from this interest and worked in the US financial services industry, these early experiences had a deep effect on my later research and work.

ITM: How did you get the Chinese name 孟睿思?

Chris: My surname is Marquis, M sounds like Ma – “horse”,and many Westerners have Ma as their surname. But I prefer Meng which is the surname of the famous Chinese philosopher Mencius who had a positive view of human nature and benevolence. Given my interests in social responsibility, culture and philosophy, I think Meng is a fitting surname. A friend chose the given name Ruisi for me, as it sounds like my first name Chris and also it suits me well – one of the characters reflects Confucian thought and another “thinking.” Frequently foreigners have phonetically accurate names but without Chinese meaning. I am glad to have this name that reflects me and my interests.

IITM: When did you first come to China, and what impressed you most?

Chris: In 1997, I backpacked around the country for five weeks.I visited Beijing, Shanghai, Xi’an, Chongqing, Suzhou, Hangzhou, Guanghzhou, Wuhan, and Shenzhen. It was incredible to see all of the historical places I had studied such as the Forbidden City, Great Wall, Terracotta Warriors among other sites.And I was glad to be able to cruise the Yangze between Chongqing and Wuhan and see the amazing Three Gorges before the dam was built.

The trip also gave me a number of other special memories. For instance, It was the first time I had hotpot and Sichuan hot pepper, and I still remember my lips being numb. Now every time I am in China many of my meals are hotpot.

One of the things in Chongqing that struck me was the high percentage of the cars that were small and red, I think made by Suzuki. During my time in Beijing I also noticed all the cars were Volkswagens. The regional differences in production in cars was striking and surprising to me as in the USA, the car market is much more diverse and there are not regional differences.

Another unique memory was in Shanghai. From the Bund,across the Huangpu, you could see the Pearl Tower and a few low rise buildings. I am pretty sure that you could also still see some grassy fields at that time. In the evening, I chatted with some students. They told me that that piece of land was the future financial center of China, and I really thought they were crazy. But obviously it was me that was wrong！ I think about that story frequently when I am in Shanghai and see all the incredible modern buildings.

ITM: What motivated you to be a distinguished visiting professor at the University of Electronic Science and Technology of China (UESTC)in 2017 ?

Chris: An important reason is that I have gotten to know many other scholars there. I started going to Chengdu in 2010. At that time a good friend was an Associate Dean at UESTC. During those visits I met many other faculty and students and the new Dean of the UESTC School of Management and Economics, Professor Ma, who I have come to know and respect tremendously.For me, it is important to have a personal connection to a place if I am going to invest my time working there.

Another reason is I enjoy spending time in Chengdu, I really like the people in Chengdu and the relaxed atmosphere and great food. Chengdu is also a city with rich history and culture,and there are many amazing historical sites including Dufu Cottage, Jin Sha Culture Museum and the Wuhou Temple, all of which I have visited many times. I’ve also gone to Dujiang Dam and the Leshan Giant Buddha a few times. I really appreciate the unique history and culture of Chengdu.

Professor Christopher Marquis

Another reason is the work, of course. I have been a Thousand Talent based at UESTC since June 2017. Dean Ma saw an opportunity for UESTC to have a unique focus on social entrepreneurship, social enterprises and philanthropy and asked me to help with building that capacity. While I have been a distinguished visiting professor at a number of other Chinese universities including Peking University, Shanghai Jiaotong University and Fudan, none of these other universities have the same interest in focusing on these important and forward looking topics. For me it is very exciting that the institution really wants to build a capability in this important area. At all of these universities,I have been so impressed by how the Chinese students work hard, and take their research and their studies incredibly seriously. It is very inspiring. And I am glad I can help Chinese scholars develop solutions to China’s social and environmental issues.

The Belt and Road Initiative will lead to more internationally focused CSR

ITM: Based on your research, how is the performance of Chinese local and mainland-located foreign corporations in the aspect of Corporate Social Responsibility (CSR) ?

Chris: I’ve been researching Chinese companies’ social responsibility and environmental sustainability activities for almost 10 years now. Reflecting on this recent decade there are a number of interesting trends. When I started, everything was focused on SOEs (State-owned Enterprises) and I researched and wrote a number of academic papers on the topic and Harvard Business School case studies on companies such as State Grid and China’s largest shipping company, COSCO (China Ocean Shipping Company). For these leading SOEs their connection to the government led to important social obligations and they and other SOEs developed a unique model of social responsibility for Chinese firms.

Also I researched multinational firms, mainly consumer facing retail companies, like Coca Cola, Starbucks and the outwear company Timberland. These companies all have active socially and environmentally-conscious programs in the USA and very much promote these activities when growing in China. For instance, Coke does a lot of work on preserving watersheds and on Earth Day, they had their China employees do some treeplanting activities. International companies doing these activities in China are gaining closer connection to the local populations by developing better reputation among consumers and by fostering culture among employees.

What is very interesting to me is how in recent years, Chinese private firms have been increasingly interested in these concepts, particularly companies where the founders are CPC members and so have a deeper connection with the government. As private entrepreneurs become wealthy, they are doing philanthropy either themselves or through their firms. Some examples I find unique and inspiring are where the companies and founders are focused on developing China’s social enterprise capability. For instance, China Yintai, the property developer donated money to Peking University to help them establish a masters’ degree in social enterprise management.The founders of SANY group, the multinational manufacturing company created a foundation to promote a more scientific approach to philanthropy. And Lao Niu Foundation, founded by Niu Gensheng from Mengniu has created a Thousand Talents program to help train non-governmental (NGO) leaders. Private firms increasing engagement in giving back is where much of the innovation in this sector will occur in the future.In addition, I think another key future trend is how Chinese companies going global will develop innovative social engagement strategies in host countries. I’ve recently heard a lot about how Chinese NGOs are being encouraged to go to the countries where there is Belt and Road Initiative (BRI) investment and companies working in these countries to develop programs to aid local social development. That is similar to companies like Coca Cola,Starbucks or Timberland. They came to China and used CSR to connect to the local environment. Now it is Chinese companies going out to other countries that need to develop local reputation,relate to governments and bond their employees in new environments. CSR, in addition to giving back to the local populace, is a great way to do that. And this also helps build China’s soft power so I think the government will continue to support it. I think as BRI continues to develop, the social responsibility activities of Chinese firms internationally will increase dramatically.

Christopher Marquis addressed the 2017 Social Enterprise Summit in Hong Kong

ITM: Who do you think is to blame for the current air pollution in China?

Chris: Many times people might blame the government, companies or other actors. While certainly China did sacrifice environmental sustainability for economic growth for a long time after the start of the opening and reform period, today I think the government is playing a leading role in cleaning up the environment. It is clear there are better and more effective policies and regulations and importantly, enforcement of those regulations. And this has started to bear fruit as shown by a number of news reports this past winter about how the air in Beijing has improved. It takes a long time to tackle the root causes of pollution and while there is still room for improvement, I am encouraged by the trends.

I grew up in Pittsburgh, a city known for being the center of the US steel industry and having a history of severe pollution problems. I recall when I was a child, driving along one of the three rivers in Pittsburgh and seeing steel mills belching smoke.Through the 1970s, 1980s and 1990s, Pittsburgh had a difficult economic time as the steel companies went out of business and many people lost their jobs. But through this hard time, the city was able to shift to cleaner industries like health care, education and technology. And now the air there is incredibly clean and the city is economically vibrant. It takes a lot of time to shift away from polluting industries. The Chinese government has been encouraging a shift to the service sector and from focusing just on economic growth to stressing social and environmental development. This shift is one of the main things that spurred me to be interested in studying these topics. And I hope that through my research and working with companies I can help contribute to those changes.

Sustainability is not a zero-sum game

ITM: In 2011, one Chinese professor pointed out that the average life span of Small and Medium-sized Enterprises (SMEs) is about 3.9 years. Do you have any suggestions for SMEs about Corporate Sustainability?

Chris: It is true that on average SMEs are short-lived. In the US,it is similar. Entrepreneurship is a very hard, high risk venture and the chances are one will fail. With impressive examples like Jack Ma, entrepreneurship can appear to be a sexy, dynamic and an interesting thing to do. But people forget that Jack Ma’s first two ventures failed. Perseverance is the key to entrepreneurship. It is a long hard struggle. It’s about getting the details right. It’s about being smart and finding the best way to satisfy customers. Most people nowadays want a quick buck and aren’t willing to put in the hard work and creativity necessary. It is the same in the US.

Furthermore, for any business, long-term orientation is essential. For high quality growth, focusing on sustainability is important. For instance, one of the areas I study is the rise of businesses in the United States that achieve a double or triple bottom line. An important trend is the rise of B corporations(aka “B Corps”) where companies are certified based on their environmental and social performance. By going through the process of being certified, these firms end up learning how to manage their operations better. As a result, many investors think such companies are better managed and have lower risks.And some Chinese businesses are also now part of this movement. My point is it is not zero-sum if the company focuses for the long term on sustainability. This is something that can help the management and the efficiency of the company. If the company wants to be around for the long term, focusing on more than just short term profits but also being environmentally and socially sustainable is a way to do that.

ITM: Any reflections on China’s surging IT sector and suggestions for online retailers?

Chris: I come to China about six times a year, spending two to three months of time in total, and for almost every purchase,I use Alipay or Wechat. I actually try not to use cash or credit card at all when I visit so I can tell my friends back in the USA that I just spent 2 weeks in China and paid for everything via my phone. Such a difference than just 2-3 years ago. And I use these platforms to do group buying, ordering a taxi, using a shared bike and many other things. Wechat and Alipay are truly amazing and are platforms for future development of an increasingly innovative Chinese technology ecosystem. This is a huge competitive advantage for China’s future economic development.

Also, given my focus on business and social responsibility, I believe it is essential to build an authentic and positive relationship with customers. For instance, the thing that impressed me the first time I used Taobao is how Alibaba developed an infrastructure to overcome societal trust issues and to help people return items and get refunds quickly, easily and conveniently.For online retail, it seems that a lot of times the products are not exactly how they look in the picture. There are sellers who just want to make quick money. But Alibaba developed an ecommerce infrastructure to allow consumers to get beyond these issues, encouraging retailers to treat customers and employees well. Maybe in the short term, profit margins were smaller for these firms, but given the development of the ecommerce ecosystem, it has led to long term growth and sustainability for hundreds of thousands of entrepreneurs.

ITM: Can you describe your studies that show that entrepreneurs with a communist ideological imprint pay closer attention to social issues and problems?

Chris: Much of my research looks how the background of individuals and companies affect their future activities, that is how history can have a lasting effect. I have developed a theory around social imprinting – focusing on how early experiences have long term influences on companies and their behaviors. The idea of imprinting is from biology. Scientists in the 1930s found that if animals such as geese or ducks saw an experimenter first when hatching from their eggs, they were imprinted with the idea that that person was their mother and then followed that individual around as a parent as they grew.Humans and even organizations can also undergo the same general process – for instance, organizations frequently take on their founders’ character and this lasts after the founder leaves,and for individuals going through intensive socialization processes at key junctures in life, there is also has a lasting effect on how they think and their later actions.

In my China focused studies, one of the things I have found is that the process of becoming a CPC member when one is entering the workforce is one such crucial socialization experience and that businesses founded by CPC members differ in a lot of important respects from those founded by non-CPC members.You can imagine it could be a selection process - that is, maybe the best and the most responsible people are selected to be CPC members. But in this research we have been able to seperate those different factors and show that the CPC socialization process fundamentally influences individuals’ later values and mindsets. That is, going through the process of joining the CPC, learning the key party principles and the extensive associated training, writing and discussion has an enduring effect on these individuals. One of the specific findings is that entrepreneurs that have undergone CPC socialization are more likely to be committed to social responsibility after founding their business. This makes sense because part of being a CPC member is giving back society, social development and heeding the call of the government. Also, however, another finding is if you compare companies founded by CPC members who joined the party before 1978 with those by non-CPC members, the non-CPC members firms are more likely to go global than CPC members firms. We believe this is because before 1978, the CPC socialization process emphasized self-reliance and was critical of international capitalism and so these entrepreneurs bear an imprint that results in their firms eschewing internationalization. CPC founded firms do more CSR but go global less are two of the initial conclusions of this ongoing research.

Introducing Foreign Experts shows Humbleness and Openness of Chinese Government

ITM: In 2012, you were Named a High-level Overseas Expert, Administration of Foreign Expert Affairs and in 2017, you were on the list of Thousand Talents Award by the Government of China. As a distinguished special appointment professor, what do you think of China’s policy on foreign experts?

Chris: One of the things that has impressed me most about the Chinese government is that it’s interested in learning from the outside. Having foreign experts is a very smart policy. I think every country should have and learn from foreign experts. It shows humbleness and openness. For example, the USA could learn a lot from Chinese IT companies that have developed unique platform ecosystems, and from the Chinese government and infrastructure companies about how to build infrastructure. And as China continues to grow in influence globally such learning helps advance its soft power.

I recently received a 10 year R-visa which will provide much more convenience to visit China. In the past, I had to get a new China Business Visa every year which was expensive and inconvenient. In addition to being 10 years, the new R Visa is free.