Chinese firms in Myanmar attempt to fix image problem

China is piloting a strategy more commonly used by Western corporations: corporate social responsibility.

Facing unexpected turbulence over its investments in Myanmar, China is employing a strategy more commonly used by Western corporations: The “corporate social responsibility” campaign.

Hence last week’s rollout of new guidelines to be followed by Chinese firms doing business here in Myanmar (Burma), a country that until recently had been viewed by many as a Chinese client state. 

The move speaks to China’s image problem not only in Myanmar, but in many of the Asian and African countries where it operates copper mines, dams, and oil fields amid complaints of safety violations and environmental damage.

Gao Mingbo, the social media-savvy head of the political section at the Chinese Embassy here in Yangon, sees the Myanmar effort – which is now a staple of US corporate strategy in the developing world – as a “pilot” exercise for how Chinese companies should be doing business abroad. 

But China’s troubles in Myanmar are also a cautionary note for other countries looking for business in Myanmar, where people are now far less afraid to protest investments that may impinge on their rights. Protests over land rights and environmental damage associated with foreign investments are now common.

Myanmar’s foreign investment commission is “attaching much more importance to the environmental and social issues than before,” says Edwin Vanderbruggen, a Yangon-based attorney at VDB-Loi. “In that context investors from any country, including China, do well to position themselves stronger as responsible corporate citizens.”

The move comes just as China prepares to switch on newly-built pipelines that will carry oil and natural gas across Myanmar, from the Bay of Bengal to China’s Yunnan Province.

The pipelines drew protests from increasingly vocal Myanmar civil society groups over related land-grabs. It was similar to the controversy China’s resource projects have caused elsewhere, but a surprise to Beijing, which some say had grown complacent in its relations with its neighbor to the southwest.

“It’s all about perceptions,” says Mr. Gao. He says that Chinese companies are already doing much to help local communities affected by their investments, but that companies have done a poor job promoting their good works.

It’s been a hard lesson, he says. “It’s not responsible to accuse the Chinese of doing nothing to help the local communities – that’s not fair,” says.

Myanmar’s rapid transition from military rule to democracy has exposed just how complicated Sino-Myanmar ties really are. Myanmar has been balancing its historic reliance on China by opening up to the world, and expanding ties with the United States and Europe.

And the past two years have seen a spate of high-profile bumps in the economic relationship, including President Thein Sein’s decision to cancel a controversial, long-planned Chinese dam-building project in 2011 and a joint Chinese-Myanmar copper-mining project in the northwestern part of the country.

Now, the Chinese government is realizing that it needs to shore up its image. Beijing’s sudden interest in promoting corporate social responsibility and showcasing its assistance efforts are part of that tactical effort.

At a press event last week, the Chinese embassy and the Chinese-Myanmar Enterprises Association promised “moral self discipline to attain the trust of Myanmar society and people,” a focus on job creation, and greater engagement with local communities.

What it will amount to remains unclear. Regardless, China’s effort shows the importance that Beijing places on its Myanmar relations and investments, amid increasing competition from the West. The oil pipeline, for instance, will allow China to bypass the Straits of Malacca – a potential chokepoint in a military conflict – when importing fuel from Africa and the Middle East.