The following is a guest post by Motoko Aizawa:*
"Inside out, and outside in, but not inside in." According to John Ruggie, now the Berthold Beitz Professor of International Affairs at the Kennedy School of Government at Harvard University, this was the mantra that the Chinese offered as a way to steer Ruggie's mandate as the Special Representative of the Secretary-General on human rights and transnational corporations and other business enterprises. Cryptic? Here's the translation: It would be OK for Ruggie's business and human rights mandate to address the behavior of Chinese companies doing business outside China ("inside out"), and it's OK for foreign companies operating inside China ("outside in"), but it's not OK for the Chinese companies operating in China, or "inside in," as that is the exclusive domain of Chinese law and sovereignty.
The output of Ruggie's mandate (2005 to 2011) was none other than the UN Guiding Principles on Business and Human Rights (the GPs), an influential soft law instrument endorsed unanimously by the Human Rights Council, including China. As a soft law instrument, the GPs are not binding international agreements. On the other hand, they address all business activities, domestic and international. So how does the Chinese mantra on international and domestic trade and investment measure up against the GPs?
China has been slowly but steadily upgrading its guidance to its fast growing outbound investments and trade by pointing to international benchmarks. The idea is to help business improve its conduct and reputation, so as to protect China's national reputation. Here are three examples of standards of business conduct for Chinese enterprises "going out".
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