In 1992, with its purchase of Hierro Peru, the Shougang Corporation of Beijing achieved a notable milestone: it became the first Chinese multi-national to make a significant investment in Latin America. After the transaction, Peruvian activists complained that the company lagged behind its peers from other, mostly wealthier countries, in terms of enacting Corporate Social Responsibility (CSR) policies and enforcing labor standards. Over the next two decades, Chinese foreign direct investment in Latin America jumped to $223 million in 2003 to $15 billion in 2010. Over the years, Chinese companies have improved their business practices and worked to foster positive relationships with host countries, but overall, when it comes to CSR, Chinese companies still lag behind their peers from the U.S. and OECD...
...During a recent panel discussion, Eric Farnsworth, VP at the Americas Society, a think tank in New York, said “Latin America is part of what China is doing around the world, a quest for commodities… to [help] fuel growth.”
In the last ten years, Chinese companies have realized that when it comes to Latin America, they need to be sensitive to expectations in the countries in which they have invested.
Eric Farnsworth explained that Chinese companies are realizing that “there are expectations in the western hemisphere that when you come and invest in the region that you have corporate social responsibility… that you treat your workers well.”
“The Chinese are changing, you will have the firms change,” he said.