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China Letter-News and Human Rights

China human rights news with focus on the Uygur of Xinjiang, Tibetans and Tibet, Chinese mining workers, religion, corruption and censorship.

Friday, February 27, 2004

McDonald's bets on Chinese growth

BBC NEWS | Business | McDonald's bets on Chinese growth

McDonalds ChinaFast food outlet McDonald's has said it is planning almost to double its outlets in China ahead of the 2008 Beijing Olympics.

The burger chain has also agreed a fresh eight-year deal to sponsor the games for an unrevealed sum.

"It's an investment we obviously think is worth it for the long term," said McDonald's chairman Jim Cantalupo.

It is a hard question isn't it? The problem of unfettered foreign investment is a conundrum.

On one hand it has positives: shareholder returns, greater involvement of China in global economics, more communication channels opened up, greater prosperity for the Chinese people through employment opportunities etc etc. But on the other hand we can be seen to be giving de facto approval to China's human rights violations and exposing the essential avarice of free societies.

Depending on the school of philosophy you adhere to will provide differing answers to this question.

At one end of the spectrum we have the position that it is morally wrong to be involved at all if even one individual continues to suffer, at the other it would be held that the benefits to humanity as a whole outweigh the negative effect on a relatively small group.

I think that individual organisations must, by and large, have the right to seek economic opportunities as and when they feel fit but be self regulated in doing so. Part of this self regulation would be to prominently display in the likes of any prospectus or annual reports their economic interests in countries that are identified as human rights violators thus allowing shareholders to make informed decisions. We see examples of this type of self regulation in the so called "green corporations" whose investment strategies must, by self regulation, meet certain predefined environmental characteristics.

I am sure that a great majority of the shareholders of McDonalds for instance have never heard of the Uygur and feel that the Tibet problem, which received such wide exposure in the 70's and 80's but not as much now, had pretty much been resolved.

The government of the corporations principal residence must also have oversight of planned investments with legislation similar to the various "Anti Trust", "Monopolies" and "Arms sales" legislation where they can veto such plans if the corporation has not exhibited due diligence or at least demand some human rights concessions from the target country as a pre-requisite for approvals.

Obviously this is not the venue to go into depth but I am sure these things are feasible.

I wonder when shareholders last checked their investments and thought whose blood was on the dividends cheque?