Responsive Local Firms?

Abstract

Local corporations exhibit distinct features that are salient in their own right. Chinese state-owned enterprises (SOE), as the name suggests, rely heavily on state sponsorship. The surge of larger-scale manufacturing facilities in Taiwan can only trace its history back two to three decades, essentially under the ‘patronage’ of the United States. Local corporations are relatively free from international scrutiny of their environmental stewardship and few enjoy golden brand names such as GE and Westinghouse. Despite the swift expansion of SINOPEC, which is fast expanding and counts virtually all the big Chinese chemical SOEs under its control, including Wang Chemicals, few local chemical manufacturers can emulate the size and the influence of international chemical conglomerates. SHE protection, for most local corporations, used to be as foreign as an MNC operating in the region. For Chinese SOEs, SHE protection effort is tied to the national policies and reflects the conditions of trade internationally, such as in the case of the World Trade Organization (WTO) membership and most favoured nation (MFN) status. For the majority of the local corporations, SHE protection is a direct response to institutions, or more broadly speaking, contextual factors.

There are lessons to be learned from the past experiences. During 60s and 70s when most of the setting up and expansion work was taking place, environmental problems were not such a big issue. As most equipment and installation were imported from abroad, we always tried to save money by leaving out pollution control equipment, thinking we could obtain these in China for much less money … Looking back now, we didn’t do enough and a lot of damage was done during those years. It was around the mid-80s when an incident happened that people were awakened to the harsh reality of the effects of pollution. There was a riot by the local farmers. It happened during the period of our large-scale expansion. A large quantity of effluent had to be disposed of and it was discharged into the surrounding farming land. This became the fuse that touched off the explosion and the police and army had to be called in to settle the dispute. At the time this was the largest scale of army mobilisation to settle a domestic dispute under the new communist government … Although an unhappy memory, the incident helped to awaken our consciousness towards environmental protection.

General Manager, Lin Chemical, China