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Companies rush to show generosity over China earthquake PDF Print E-mail
Wednesday, 04 June 2008

AFP, BEIJING - Foreign and local companies have rushed to make donations to the victims of China's worst earthquake in a generation, amid initial angry accusations of a lack of generosity from the corporate sector.

Internet users targeted multinationals such as Nokia, McDonald's, Kentucky Fried Chicken in the first week after the Sichuan quake, branding them "international misers" and calling for a boycott of their products.

"We should pull together to boycott the misers to let them know who fed them," said a forum posting on Sunday at popular portal Netease.com.

An earlier posting claimed that companies "have no conscience," and urged consumers not to "give them any chance to earn money if you are Chinese."

Street protests against foreign firms were also held in the first, emotionally charged days after the May 12 disaster, as anger mounted about an alleged lack of donations for victims.

In Nanchong, a city in Sichuan, a crowd protested outside a McDonald's outlet, vandalising its sign and lambasting the fast-food chain for giving too little.

It is unclear whether corporate donations have been gathering pace because of the initial public protests -- and amid fears of a consumer backlash -- or simply as the full extent of the tragedy has unfolded.

As of Monday, the corporate sector had donated or pledged to donate around seven billion yuan (one billion dollars), according to Chinese portal Sina.com.

Many companies have also contributed aid such as food, medicine, and machinery after the quake which devastated parts of the southwest province and left nearly 90,000 people dead or missing.

One of the companies spending on quake-related charity was Intel Corp., the US-based chip maker, which had agreed to donate 45 million yuan, saying it considers itself "part of China, and a part of Sichuan."

"At this critical moment, Intel will combat the earthquake disaster together with the affected Chinese people," said Intel vice president Ian Yang.

But anger that foreign companies were giving too little prompted a stern rebuke from Commerce Minister Chen Deming.

"The so-called international misers theory is totally unfounded," Chen told reporters late last month.

Companies, for their part, have responded in the days since the quake not only with increased donations but more sophisticated relief assistance such as job opportunities for affected people and counselling services.

Yum! Brands Inc. raised its corporate and staff donation to 21 million yuan last week and offered priority employment in its restaurants to those from the earthquake epicentre, if all requirements are met.

"We are appreciated and understood by those who know the facts," said the company, which runs restaurant brands including KFC and Pizza Hut, in a statement sent to AFP.

Companies have also come under pressure as lists that rank donations are widely available on Internet portals and in newspapers, making comparisons by the public with their rivals easy.

Wal-Mart announced on May 26 an additional 17 million yuan, raising its donation to above 20 million yuan -- three days after France's Carrefour increased its largesse to 23 million yuan.

"Pressure from the public and competitors probably accounts for more than 60 percent of companies' donation motives and decides how much they donate," said Jin Liyin, a professor in marketing at Fudan University in Shanghai.

Ning Xiangdong, a business professor at Beijing's Tsinghua University, said improving corporate image was certainly part of the motive for donating, understandable given the intense market competition in China.

"Any charity activity will lead to an impact on corporate image among the public," Ning said.

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