The Social Enterprise Emerges in China

By Zhao, Meng | Stanford Social Innovation Review, Spring 2012 | Go to article overview

The Social Enterprise Emerges in China

Zhao, Meng, Stanford Social Innovation Review

Social enterprises in China are being shaped by several interconnecting forces: the country's cultural and linguistic history, new state approaches to economic and social development, and the strategic framing of social enterprises by leaders and supporters.

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"IN FOREIGN COUNTRIES, thecharityhas developed for hundreds of years and then the social enterprise organically came up. In China, we have everything within a few decades. We now have grassroots nonprofit organizations, social enterprises, venture philanthropy funds, and so on- all of a sudden." So explained Li Fan, co-founder of the Global Links Initiative, the first social entrepreneur membership organization in China.

Since China began to transition toward a market-based economy and to support entrepreneurial activities in the early 1980s, there has been an explicit, albeit gradual, governmental retreat from social and economic life. Social services, such as education and health care, traditionally managed by state-owned enterprises or funded through government budgets, are nowpartially left to civil society. Yet grassroots (i.e., independent) institutions are not ready to take over. China's problems are mounting: There are abusive labor practices, environmental pollution, and growing numbers of drug-addicted people - problems hardly heard about just a few decades ago. Meanwhile, the World Bank and the Chinese government report that the wealth gap between the rich and the poor in China is among the world's highest. In response to these problems, grassroots nonprofits have proliferated since the mid-1990s. But they have struggled with restrictive regulations and low trust from citizens and government. Several years ago, a group of people from the social, business, and government sectors started introducing the idea of the social enterprise as an alternative solution to most nonprofits' failure to address the social and environmental problems left unattended by the government and businesses.

The concept of the social enterprise- with its emphasis on appfyingbusiness strategies to achievingphilanthropic goals- has kept pace with the evolution of the idea in the Western academic community. In January 2004, the Peking University-based journal China Social Work Research translated the first academic article on the subject, "The Social Enterprise" by Peking University Professor Liu Jitong. At the end of the year, the first group of British social entrepreneurs visited China. To give a rough chronology, these activities were about a decade after Harvard Business School launched its social enterprise initiative and about one year before the inaugural issue of the London-based Social Enterprise Journal, the first journal specializing in the subject.

In March 2006, Lv Zhao and his colleagues went to the Skoll World Forum at Oxford University, marking the first time a group from the nonprofit community in mainland China attended the conference. Lv was then deputy director of the China NPO Network, one of the first professional training providers for Chinese nonprofit organizations, and founder of the Non-Profit Incubator, the first venture philanthropy investor in China The same month, the Chinese journal Comparative Economic & Social Systems published the article "What Is Social Entrepreneurship?" by Hu Xing, then a research assistant at the Terry Sanford Institute of Public Policy at Duke University. Hu's article sent an important signal to the Chinese government, as the journal is under the supervision of the Central Compilation and Translation Bureau, which reports directly to the Central Committee of the Communist Party (CCCP) and is responsible for informing China's top authorities of international academic thought in social and economic areas.

The concept of social enterprise is now emerging in China. But it is not yet widely known to the general public or regularly covered by mainstream media. …

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