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Postcard from Guangzhou, China

Dan Gregory
Dan Gregory, posted on 14.12.12

Capitalism is everywhere. There are banks everywhere and markets everywhere. Not only in the monstrous commercial quarter and the financial sector, not only in the factories supplying skinny jeans to Topshop but also in the street markets, the joiners knocking up timber frame windows on the pavement, the immaculate shopping malls and the covered markets. But most surprising - to this ignorant mind - is that markets have already been ushered deep into public service markets, even into education and healthcare.

This doesn't look like state-owned capitalism. Maybe it's state-controlled capitalism - as there are inevitably limits to what's allowed. But the market appears to have been given the freedom to work its magic on both a towering and street level scale.

At a meeting I attend at a "Centre for Social Innovation", there is much consensus that the social enterprise sector in the UK is leading the world (I was polite enough to leave this assumption intact) because of our watertight legal definition of social enterprise (this I did challenge). The miracle of compound irony.

A VC investor dabbling in the social enterprise space talks about how he scores pitches more highly if entrepreneurs are the children of other successful entrepreneurs. This reminds me of a fund in the UK which has recently shifted its approach to seek out investees through networks, referrals, peers and recommendations rather than through mass marketing calls for applications. While our Chinese VC friend is explicitly rewarding capital with capital, his UK counterparts are, albeit less crudely, rewarding social capital with capital. While entirely understandable, both versions make me rather uncomfortable.

Over dinner, several Chinese colleagues are critical of - as they see it - our Charity Commission's lack of independence from the Government of the day. We discuss, for example, whether there is really no link between the Commission's change of emphasis towards a policy of greater self-regulation and the increased funding pressure they are coming under. I concur as my Chinese friends accuse the UK state apparatus of meddling in the governance of civil society.

The Director of Society in the British Council in Beijing - the marvellous Mairi Mackay - has social enterprise as her number one priority. This is perhaps remarkable given the common perception of China as lacking a strong civil society independent of the ruling state ideology - in contrast to our liberal democracies in the West. Perhaps - as our civil society is also restricted from political activities; significantly reliant on state funding; and not truly independent, with the state directly influencing decision-making and governance - this shows that the Chinese don't have all that much to learn from our model? Or perhaps they do - and the above is nonsense - but we simply daren't suggest it. Or maybe social enterprise has been such a powerful rising force for even longer than Ken Clarke and Gordon Brown's 63 consecutive quarters of growth that it now dominates the discourse around UK civil society abroad as well as at home.

At a national event on social investment, it was a relief to hear occasional dissent of Government policy and jokes about the Communist Party in the open. Unless I get lucky occasionally with where I sit at UK events, I probably hear less dissent and fewer jokes about the Conservative Party in the UK. It was certainly refreshing to meet a handful of representatives from investment funds with tens of millions of pounds to invest, at risk, in social enterprises in China. Again, our domestic experience is perhaps not so far ahead.

As ever, distance makes the heart grow fonder and the head work harder. Perhaps the most encouraging discovery was that many in China, whether inside the state apparatus, in business or working at the grassroots, were seriously thinking about a model of capitalism which limits the dangerous social and environmental externalities of rampant markets. But meanwhile, in practice, the market was raging on regardless.


ClearlySo Associate Dan Gregory was in Guangzhou in China for a few days in November as part of the British Council's Skills for Social Entrepreneurs programme. He spoke at the Social Investment Forum, part of the The China Private Foundation Forum 2012.


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