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SHENZHEN: Small to medium-sized enterprises should implement corporate social responsibility (CSR) to improve employees' working efficiency and forge more stable relationships with clients, according to a new study.

China Development Institute, a Shenzhen-based non-government organization, analyzed several firms for the nine-month study.

It was funded by the Global Opportunities Fund, a programme run by the Foreign and Commonwealth Office of the United Kingdom. CSR is generally understood to be the way a company achieves a balance of economic, environmental and social imperatives.

The institute collected and compared financial data of six typical enterprises from labour-intensive sectors, including the manufacturers of shoes, clothes and toys, in South China's Pearl River Delta area to find out how CSR benefited them.

"By comparing their costs and returns before and after the implementation of CSR, we found the companies with good practices of CSR gained new impetus for their long-term healthy development," Guo Wanda, vice-president of the institute who led the research team, told a seminar on Friday.

Included in the study was a previously small underwear manufacturing company, abbreviated as MT, in Zhongshan of Guangdong Province.

MT spent 174,600 yuan (US$21,529) improving seven major sectors, such as work safety conditions, child labour, salaries and social security, and overtime. In return, average monthly orders rose by about 50 per cent over the course of one year in 2003. MT also became a supplier to many major European and American retailers.

"Transnational corporations have been the major force behind CSR in companies in the past, but now the Chinese companies and governments will gradually play a leading role in the field," said Wang Zhile, director of the Research Centre of Transnational Corporations of the Ministry of Commerce.

He suggested that Chinese operations of transnational companies, domestic-listed companies, Chinese companies with overseas business and State-owned enterprises be the first group to implement CSR in China.

(China Daily 03/18/2006 page2)