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Fair Trade in China
Dra. Antonia Sajardo Moreno
Applied Economy Dpt., University of Valencia
Polibienestar Universitary Institute
Marta Gil Ibáñez
Social Economy PhD Student
University Institute IUDESCOOP
Abstract
Currently, the development of society is based on market and consume. In a worldwide
economic crisis context, the contribution of social movements against poverty is larger day to
day. In this sense and looking for interrupt the existing inequality between rich and poor
countries, Fair Trade movement establishes commercial relations chasing the sustainable
development of disadvantaged and excluded producers. In 2014, China kept as
manufacturing worldwide leader and it has been called to become first economic potency
before 2016. Counting on 1357 million of people, 56 ethnicities and an 8% of annual growth,
the capacity of China of affecting global commercial relations and procedures is
overwhelming. Fair Trade in China combines both concepts and it analyzes the possibility of
establishing fair commercial relations and protocols in the country as alternative to traditional
commerce to reduce number of people condemned to live in poverty. This study, through the
study of existing literature and a case study, shows how social movements could suppose the
first step to achieve big social changes and becoming the motor of new forms of social
economy enterprises in China. In conclusion, this research shows the possibilities of China to
contribute on worldwide sustainability through Fair Trade actions.
Key words: Fair Trade, China, social movements, guanxi, Social Economy
Resumen
Actualmente, el desarrollo de la sociedad está basado en el mercado y el consumo. En un
contexto de crisis económica mundial, la contribución de los movimientos sociales contra la
pobreza cada día es mayor. En este sentido y buscando interrumpir la desigualdad existente
entre países ricos y pobres, el movimiento de Comercio Justo establece relaciones
comerciales que persiguen el desarrollo sostenible de los productores desaventajados y
excluidos. En al año 2014, China se ha mantenido como el líder mundial en producción y los
pronósticos elevan al país a primera potencia económica mundial antes de 2016. Con 1357
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millones de personas, 56 etnias y un 8% de crecimiento económico anual, la capacidad de
China de afectar a las relaciones comerciales globales y procedimientos es abrumadora. El
Comercio Justo en China combina ambos conceptos y analiza la posibilidad de establecer
relaciones comerciales en el país como alternativa al comercio tradicional con el fin de
reducir el número de personas condenadas a vivir en la pobreza. Este estudio, a través del
análisis de la literatura existente y un caso de estudio, muestra como los movimientos
sociales suponen el primer paso para conseguir grandes cambios sociales y erigirse como
motor de nuevas formas de organizaciones sociales en China. En conclusión, esta
investigación muestra las posibilidades de China de contribuir en la sostenibilidad mundial
implementando actividades de Comercio Justo.
Palabras clave: Comercio Justo, China, movimientos sociales, guanxi, Economía Social
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Introduction
China is experiencing a rapid transition from a centrally planned economy to one which is
predominantly a free and open market. Thus, it is one of the reasons that makes more
warranted some research attention (Zhou, Chao and Huang, 2009). As the authors denote, the
context provided by China is a good context for a study of nonprofit organizations as the
traditional mode of operations with the government in firm control. The Nonprofit Third
Sector is not exception in this context of change. In recent years, there has been a significant
increase in the number of nonprofit organizations working in China, local or international
(Hsu and Hasmath, 2013).
In a country with restrictive policies on Third Sector, with problems of motivation for
employees of nonprofit organizations, with an extreme dependence on government at all
levels, with very specific political and cultural characteristics and in constant search of a new
way allowing them to maintain a high level of growth, management and innovation capacity
of the Third Sector appears as a sustainable alternative to address the social problems of a
country with nearly 1400 million people.
Thereby, the research topic chosen for the development of this study is situated around the
Fair Trade in China. To accomplish with this general purpose, this research is structured as
follows: first, appears the analysis about the concept and history of Fair Trade which
concretely includes its current situation in China. Finally, it is performed the case study of
one nonprofit organization established in China working on Fair Trade.
Fair Trade, concept and history
The current system of international trade puts an accent mark on the gap between rich
countries and poor countries. Thereby, the number of people condemned to live in poverty
increases. This situation can be changed through Fair Trade movement, understand it as the
alternative approach to conventional trade and based on a partnership between producers and
consumers. Producers receive fair compensation for their work, assuring them a dignified and
sustainable life and the enjoyment of their rights.
According to FINE1 members, Fair Trade is a trading partnership, based on dialogue,
transparency and respect, that seeks greater equity in international trade. It contributes to
sustainable development by offering better trading conditions to, and securing the rights of,
marginalized producers and workers – especially in the South. Fair trade organizations,
backed by consumers, are engaged actively in supporting producers, awareness raising and in
campaigning for changes in the rules and practice of conventional international trade.
The World Fair Trade Organization (WFTO), a global network of organisations representing
the Fair Trade supply chain in over 70 countries across 5 regions, prescribes ten principles
that Fair Trade Organizations must follow in their work and carries out monitoring to ensure
these principles are upheld.
1 Definition agreed in December 2001 by FLO International, IFAT, NEWS and EFTA. When these
organizations work together they do under the name of FINE.
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1. Creating opportunities for economically disadvantaged producers: poverty reduction
through trade forms.
2. Transparency and accountability: the organization is transparent in its management
and commercial relations.
3. Fair Trading practices: concern for the social, economic and environmental well-
being of marginalized small producers and does not maximize profit at their expense.
4. Payment of a fair price mutually agreed by all through dialogue and participation,
which provides fair pay to the producers and can also be sustained by the market.
5. Ensuring no child labour and forced labour, respecting the United Nations
Convention on the Rights of the Child.
6. Commitment to non-discrimination, gender equity and women’s economic
empowerment and freedom of association.
7. Ensuring good working conditions: providing a safe and healthy working
environment for employees and members.
8. Providing capacity building: the organization develops the skills and capabilities of
its own employees or members.
9. Promoting Fair Trade, raising awareness of the aim of Fair Trade and of the need for
greater justice in world trade through Fair Trade. It advocates for the objectives and
activities of Fair Trade according to the scope of the organization.
10. Respect for the environment, maximizing the use of raw materials from sustainably
managed sources in their ranges, buying locally when possible.
While the Fair Trade key message has only recently garnered mainstream attention, Fair
Trade is hardly new. The Fair Trade concept initially emerged as a solidarity movement
within charity groups and religious affiliations in Europe and the United States as early as 70
years ago. The table below summarizes featured events in the history of Fair Trade.
Table 1 Featured events in history of Fair Trade
1946 Ten Thousand Villages from United States starts buying knitting in
Puerto Rico.
The fifties In United Kingdom, Oxfam starts to sell handicraft from Chinese
refugees.
1958 The first Fair Trade shop opens in United States.
1964 Oxfam UK creates its own trading company, Oxfam Trading.
1967 The Dutch importer Fair Trade Organisatie is founded.
1969 The first “shop from the third world” open in the Netherlands.
The sixties
and the
seventies
Fair Trade organizations are created in south countries: Machakos
District Co-operative Union (Kenya), PEKERTI (Indonesia) and
MINKA (Perú).
1973 Fair Trade Organisatie imports to the Netherlands the first Fair Trade
Coffee produced by small producers in Guatemala.
The
eighties
One NGO from the Netherlands creates the first Fair Trade Mark.
1987 EFTA is created, the European Fair Trade Association formed by 11
importers.
1988 Max Havelaar Mark is launched in the Netherlands. It shows up
different alternatives of certification in Germany, United Kingdom,
United Stated, etc.
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1989 IFAT is created, currently named as WFTO.
The
nineties
National associations of Fair Trade are created in Bangladesh
(1994), Nepal (1995), Philippines (1998) and many other countries.
1994 NEWS is created, the European Network of World Shops.
1994 The Fair Trade Federation (FTF) is created in Washington, D.C.
1997 The Fairtrade Labelling Organizations International is created.
1998 FLO, IFAT, NEWS and EFTA create the informal network called
FINE.
1999, 2001,
2003 y
2005
Fair Trade movement is represented in the ministerial meetings of
the OMC in Seattle, Doha, Cancun and Hong Kong.
2001 FINE agrees on a common definition of Fair Trade.
2001 The Asian Fair Trade Forum (AFTF) is created, regional división of
IFAT. Since then, there have been established another regional
producer networks in Africa and Latin America.
2004 IFAT launches its Fair Trade accreditation mark at the World Social
Forum in Mumbai.
2004 FINE inaugurates the Fair Trade Advocacy Office in Brussels.
2005 It begins to operate the quality management system, aiming to
harmonize and improve standards, definitions and existing
procedures of Fair Trade.
Source: Osterhaus (2006)
How is the Third Sector in China?
Organizations start out in the limitations of a single person to carry out, easily and efficiently,
all the tasks required to produce a good or service (Lowenthal, 1995). Within them, it
depends on the group efforts to achieve the goal. The humanity gathers thousands of records
related to organizations which have channelled the general and social interest, solidarity and
altruism in favour of social groups most vulnerable and disadvantaged economically,
identifying needs and implementing responses of different sign for their satisfaction (Sajardo
and Chaves, 2006). In order to promote solidarity initiatives directed toward producing and
distributing social goods or merit, the citizens' movement is going through a considerable
growth.
Since the beginning of the reforms in China in 1979, the emergence of the NGO sector in the
country has been a consequence of the changes experimented by the state and the society
(Lu, 2007). Since then in the country, there have been a lot of issues and challenges calling
for citizens to organize in order to articulate and pursue shared interests (Chen, 2006). Thus,
NGOs have increasingly become a significant factor in the changing social landscape in
China (Hsu and Hasmath, 2013). China has a special social sector, really different from the
western concept.
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Current situation of Fair Trade in China
Regarding the situation of Fair Trade in China its presence is still much lower than it is in the
named south countries. However, especially in recent years this trend has changed and the
presence of Fair Trade organizations has increased slightly. Worldwide, the map below
shows the regional distribution of producers and workers of Fair Trade for 2012.
Figure 1 Regional distribution of producers and workers of Fair Trade for 2012
Source: FLO (2013) Monitoring the scope and benefits of fairtrade. 5ª edition. FLO. Pg.14.
China belongs to Eastern Asia region counting totally on 6.000 people working with small
producers organizations. This volume of people corresponds only to 2.34% of people who
are related to Fair Trade across Asia and Oceania. But this data does not correspond only to
China, it represents the whole region. In contrast with the total numbers of farmers and
workers, the majority of Fairtrade producer organizations are in Latin America and the
Caribbean.
Regarding the number of employees and according to the data released by Fairtrade
Labelling Organizations International (2013), China represents 2% of the total workforce of
Fair Trade Tea in Asia and Oceania. This digit takes on special significance if it is compared
to the total population; only 5700 people from 1357 million were involved two years ago in
Fair Trade activities in the country.
The increased presence of this type of commerce in the country is reflected in the number of
organizations working directly within the country and the number of associations created in
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Asia. Therefore, it is essential to analyze the evolution of these organizations in relation to
China to conclude about the presence of Fair Trade activities in the country.
Table 2Relation between worldwide Fair Trade organizations and China
Organization Characteristics Is it related to China?
IFAT (Fair Associations
Trade), named as well as
WFTO (World Fair Trade
Organization)
Global network of
organizations representing
the Fair Trade supply chain.
Yes, creation of regional
network WFTO-ASIA.
EFTA (European Fair Trade
Association)
Association stablished in
1987 of ten Fair Trade
importers in nine European
countries (Austria, Belgium,
France, Germany, Italy, The
Netherlands, Spain,
Switzerland and the United
Kingdom).
No, it is not directly related
to any importer established
in Asia. However, some of
their members
commercialize with China
Fair Trade organizations,
either directly or indirectly.
NEWS! (Network Europe
World Shops), currently
named as WFTO-Europe.
The European branch of
WFTO. It is formed by
around 90 members,
amongst them Fair Trade
organizations, Fair Trade
networks and Fair Trade
support organizations.
No, it does not maintain
direct relation with China.
Fair Trade Federation Network of organizations
related to Fair Trade based in
United States.
No, its members are based in
United States and they do
not work with Chinese
organizations.
FLO (Fairtrade Labelling
Organization)
Global certification and
verification body, first set up
in 2003 to independently
certify Fairtrade products.
Yes, it works with Fair Trade
organizations based in
China.
Source: personal compilation.
As conclusion, the WFTO-Asia as well as FLO come to be the main entities to consider in
the in depth study of Fair Trade activities in China, as they are the only ones with enough
international weight working within the country.
The first one, WFTO-ASIA, is a network of dedicated Fair Trade organizations in Asia to
deliver Fair Trade and to seek greater equity in international trade. It has more than 130
member organizations in 182 countries (WFTO Asia, 2014), including China. Its members
are from cooperatives of small producers to large wholesalers and retailers. Up to 2014, only
one Chinese Fair Trade organization belonged to this network, the Danyun/Yunnan Fair
Trade Development Co., located at Yunnan region.
2 Bangladesh, Cambodia, China, Hong Kong, India, Indonesia, Korea, Laos, Malaysia, Mongolia, Nepal,
Pakistan, Philippines, Sri Lanka, Taiwan, Thailand, Timor Leste, Vietnam.
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Related to the second one, FLO, it is the organization that coordinates Fairtrade labelling at
an international level. From Germany, they set international Fairtrade standards, organize
support for producers around the world, develop global Fairtrade strategy and promote trade
justice internationally. The international Fairtrade system includes three producer networks,
25 Fairtrade organizations, Fairtrade International, and FLOCERT, the independent
certification body of the global Fairtrade system. From all these organizations, only one
producer network is related to China, the Network of Asia and Pacific Producers (NAPP),
representing represent small-scale producers, workers and other producer stakeholders.
NAPP was founded on 2005 in Sri Lanka, when producers from different Asian countries
met to discuss the need of having a network which can present a united voice to FLO. The
First General Assembly of the (NAPP) took place in Bangkok in September 2006. This
organization is a multi-stakeholder body comprising representatives of producer
organizations, Fairtrade Premium Committees, small farmer organizations and promoting
bodies who are certified by or registered with the Fairtrade system. Currently and as below
figure shows, NAPP has more than 160 members.
Figure 2 Fairtrade in Asia and Oceania: producer organizations by country 2012
Source: FLO (2013) Monitoring the scope and benefits of fairtrade. 5ª edition. FLO. Pg.113
At the end of 2012, of the 94 organizations of producers belonging to FLO network, there
were twelve located in China, ie, 12% of the total. Thus, it barely represents 1% of all
existing certified worldwide organizations; 7 of these 12 organizations are working with tea
camellia sinensis.
As shown in the table, there are currently 27 certified groups in China (only twelve as
producers). However, the data are revealing because in the last two years the number of
producer organizations have been doubled, in 2012 there were only six producers and nine
traders.
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Table 3 NAPP Chinese organizations (August 2014)
Organization Certified as
Zhaluteqi/Jurihe Dehui Professional Agriculture Association Producer
Xingcheng City Zhengmin Peanuts Planting Professional
Cooperative
Producer
Naturz Organics (Dalian) Co. Ltd. Trader
DaLian Zhengye Trading Co., Ltd. Trader
Jiyuan Huakang Beekeeper Professional Cooperatives Producer
Shandong Huakang Honey Products Co. Ltd. Trader
Linyi Dongxu Foods Co. Ltd. Trader
Yishui Xingye Groundnut Professional Association Producer
ABF Twinings Beverages (Shanghai) Limited Trader
Shangyu Graham Tea Company Limited Trader
Zhejiang Changyu Tea Products Co., Ltd. Trader
Zhejiang Shanshan Tea Co. Ltd. Trader
Jiangxi Wuyuan Dazhangshan Organic Tea Farmer Association Producer
Wuyuan Xitou Organic Tea Co. Ltd. Trader
Wuhan YSBio Organic Int'l Inc Trader
Xuan En Yisheng Tea Cooperative Producer
Hunan Tea Group Company Limited Trader
Wuyuan High Mountain Tea Co. Ltd Trader
Kunming Nanxiang Tea Co. Ltd. Trader
Nanjing County Yifeng Fruits and Vegetables Specialized
Cooperative Society
Producer
Yingfeng Foods Co. Ltd. Trader
Hiang Kie Coffee Group Limited Trader
Cang Yuan Rang Sai Tea Group Producer
Lincang Shuangfeng Organic Tea Specialized Cooperative Producer
Guzhang GaoFeng Organic Tea Association Producer
Jiangxi Wuyuan Xitou Tea Farmers Association Producer
Mannong Tea Association Producer
Source: personal compilation. Information: FLOCERT website.
Case study: China
First, it is necessary to define the case study as a research methodology. Thus, as it is defined
by one of the most relevant researcher in the subject, a case study is an empirical inquiry that
investigates a contemporary phenomenon in its real context, where the boundaries between
the phenomenon and the context are not accurately displayed and are used multiple sources
of evidence (Yin, 1989).
In order to define what kind of study is this empirical research, the ultimate objectives to be
achieved, the intention to compile information and the object of study have been set from the
outset (Villarreal and Landeta, 2010). The purpose of this research is defined as an empirical
verification of the current status of Fair Trade movement in China to understand the
characteristics, motivations and strategic behavior. Furthermore, the analysis assesses the
degree of awareness of the existence of such tools in the nonprofit sector and how its use
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impacts on society. In this sense, the study analyzes the situation of a real organization.
Therefore, it is a descriptive study.
Castro (2010) with reference to the author Yin, notes that one of the main problems
associated with the inoperability of the results for a case study is because it is impossible to
apply generally its conclusions. However, Pettigrew (1990) also notes that a single case may
also be suitable if the treatment of the material is enough generic or if the quality and nature
of the findings are unique or strong.
As noted before, the current number of Fair Trade producers working in China is twelve.
This study in depth analyzes one organization, the Jiangxi Wuyuan Xitou Tea Farmers
Association. The sample represents almost 10% of the total of Chinese Fair Trade producer
organizations, so it is a convenient sample on the field to be treated. Thus, the research stands
as a starting point for a more comprehensive Fair Trade in China study. Regarding its
geographical location, the organization is based in Wuyuan region, municipality of the
province of Jiangxi, under the jurisdiction of the prefecture-level city of Shangrao. The
offices are located at Wuyuan city, but the headquarters are located at Wuyuan Xitou village,
close to the main city.
Figure 3 Location of Wuyuan within China
Source: Google Maps (2015)
As noted, the research takes as sample one tea producer association established in China and
certified by FLO, the "Jiangxi Wuyuan Xitou Tea Farmers Association". However, it has to
be considered also two more organizations related directly with this producer organization.
1. Producer: Jiangxi Wuyuan Xitou Tea Farmers Association
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2. Importer 1: Wuyuan Xitou Organic Tea Co. Ltd.
3. Importer 2: Wuyuan High Mountain Tea Co. Ltd.
As a result of the current legal situation and trade laws in China, it has been created a
network of three organizations working in tandem to get done the Fair Trade tea project. Due
to the current legislation in China, a nonprofit organization cannot have business relations
overseas. That is why the second organization was created from the beginning; thanks to its
legal form it is possible for them to maintain business relations overseas. These other two
organizations are also individually certified by FLO and are "Wuyuan Xitou Organic Tea Co.
Ltd." and "Wuyuan High Mountain Tea Co. Ltd.". These two organizations have been
certified as traders, not as producers. Every organization understands and works with the
other two. Nevertheless, they focus on a single activity. Although they have legally
established three separate entities with different legal forms, the three form a single network,
they even share the same workplace.
However, this study is mainly focused on the first two agents, as the second importer
(Wuyuan High Mountain Tea Co. Ltd.) is used only for packaging and selling and its
relationship with the other two organizations is only about trade. Nevertheless, between the
first two (Jiangxi Wuyuan Xitou Tea Farmers Association and Wuyuan Xitou Organic Tea
Co. Ltd) there is an identity relation. The relationship between these three organizations is
direct, unique and dependent. That is, the entire production of the association goes to the
importer 1. There is also a commitment from the importer 2 to buy a high percentage of their
needs to the importer 1.
The study was carried out simultaneously on the activity of Fair Trade Jiangxi Wuyuan Xitou
Tea Farmers Association and Wuyuan Xitou Organic Tea Co. Ltd. Both organizations have
been contacted and have cooperated in the investigation. The direct contact was the manager
of the association Ms. Sun and the manager of the company Mr. Yuguanzhou, who have
provided all information relating to their activities providing visits to their facilities.
However, it should highlight the difficulty of collecting data because the information is not
standardized, especially concerning the partnership terms.
The origin of creating a formal organization to work on tea production at Wuyuan area dates
back to 1984. That is when both organizations began to work simultaneously. The
association is dedicated to the cultivation and collection of fresh tea, meaning tea without any
processing. On the other hand, the importer 1 is specialized in the processing of the product
for conventional and Fair Trade markets. Regarding its certifications, it was in 1995 when
they got the first one coming from Organic Food Development Center (OFDC), one of the
leading organic certifiers in China. Subsequently, in 1998 the importer 1 obtained the Ecocert
SA F32600 certification. And finally, in 2005 it is certified as Fair Trade organization by
FLO. Thus, it can be said that their path in the field of Fair Trade is relatively short, it has
only 10 years’ experience. Regarding the reason that made them become Fair Trade certified
organization in 2005, it was a process in response to a request from one of its major
customers. So, it was a German customer who introduced them to the Fair Trade movement,
providing them with all necessary information and leading them throughout the certification
process.
Regarding the number of employees, the producer count on 603 farmers who are mainly
engaged in agricultural activities. On the other side, the importer 1 counts on a 4 people team
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managing the company. Currently, 50% of its production is exported by themselves and the
50% left over is sold out to the importer 2. In turn, the importer 2 exports 90% of its
production. Therefore, although the company works in both local and international markets,
only about 1% of its production is dedicated to the local one. Related to the customers of
importer 1, they mainly work with 6 international customers located at different countries.
Consequently, it is deduced from the culture of the producer the lack of knowledge and
commitment to Fair Trade. While they do have a cooperative spirit, it was not noted his
belief in Fair Trade. Regarding the objectives set for the future, expanding sales, margins and
profits are prioritized.
Regarding the Fair Trade Premium corresponding to the sales, farmers are responsible for
decide democratically how to use the amount of money. The Premium helps producers to
improve the quality of their lives. It is paid on top of the agreed Fairtrade price. However,
once the project is decided by the farmers, the association is not in charge of executing the
decision. One more time and confirming the management difficulties in China, the country's
government takes care of the implementation of the project. Thus, the association delivers the
collected amount through social premium to the Government and let them know the decision
taken by the farmers. Since that moment, the organization loses control of its management. In
recent years, the Premium has been used in two different projects. Currently, there is a third
one ongoing (Gil, 2014).
Power lines Wuyuan Xitou Village
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School construction
Ongoing project: new building for factory and offices
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So, are clearly visible the benefits that Fair Trade has brought to the organization and the
community. Nevertheless, the organization does not perform any type of activity to promote
culture and participation in Fair Trade activities. However, the only people familiar with Fair
Trade are the farmers and their direct network of contacts, meaning the people who work
directly with the organization.
In addition, it has been possible to discover one of the key points in China regarding the
relations and communication. As pointed out by the case study, the sample believes that the
most effective way to promote their services is the personal relations. Even if one
organization tries to raise awareness as much as possible in the society, they still believe that
the personal relation is the most convenient way to achieve sustainability. In Chinese there is
one word to make reference to this dynamic based on personalized networks of influence, it
is guanxi (关系). As Park and Luo indicate (2001) guanxi is embedded in every aspect of
Chinese social life and Chinese companies develop it as a strategic mechanism to overcome
competitive and resource disadvantages by cooperating and exchanging favors with
competitive forces and government authorities. It makes no difference between profit and
nonprofit sector: at the end guanxi is something needed and important in China. Of course, it
does not mean that when an organization has guanxi it does not need to do anything else. But
it means that if an organization has this network, it will easily achieve its goals in a
sustainable way. At the end, it is a specific feature of Chinese culture and finally, this cultural
and social element could benefits the market expansion and competitive positioning, but does
not impact or enhance internal operations.
Discussion, conclusion and implications
In a worldwide economic and financial crisis context, the possibilities of contribution of Fair
Trade to stop the increase of inequality become more pronounced. Its contribution to improve
the living conditions in Asia has been higher, but in developed countries, is still clearing the
path between the consumers. The main goal of promoting Fair Trade is to put these
organizations at the forefront as sustainable way to battle poverty and inequality.
In China, the presence of organizations is negligible. The two international organizations
working within China, WFTO-Asia and NAPP as part of FLO, focus their activities in other
Asian countries. However and as it has been analysed, there are Fair Trade activity in the
country, mainly dedicated to the production and marketing of tea. In that regard, it must be
noted that despite China is currently the largest producer in the world, the country is sparsely
certified with Fair Trade marks. Moreover, the certification process is not difficult and it is
internationally standardized. So, it is not an entrance barrier for organizations to start
working within Fair Trade movement.
China is experiencing a rapid transition from a centrally planned economy to one which is
predominantly a free and open market. From a business point of view, China has turned into
the second economy in the world. As Bulla and Star-Glass (2006) point out, economic
systems are characterized by distinctive assumptions, patterns and mechanisms of exchange.
At present, the government scrutiny or the level of demand are not the main obstacles to the
nonprofit development. Rather, Chen, Pan and Wu (2006) mention that nonprofits in China
face unique challenges arising from the sector’s immaturity and from a development path
that has neglected social issues and grassroots organizations because it is guided largely by
the government. In that direction, Zhou, Chao and Huang (2009) agree with the lack of the
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sector of developing management and fundraising skills. Thus, the nonprofit sector also lacks
training programs and resource centres to support the development of its business skills
(Chen, Pan and Wu, 2006). Ultimately, is also possible to feel that lack on the Chinese
society, considering that the concept is not only unfamiliar to the general public, but also new
to academics and the NGO sector in the country.
The case study reflects the lack of culture and commitment existing in the country in terms of
Fairtrade activities. On one hand, there are several difficulties within the system of the
country. The banning to export abroad when entities are not for profit is one of the main
barriers. Even though it's true there are other alternatives, it establishes itself as one of the
major barrier to entry. Moreover, the diffuse information regarding the use of the social
premium also shows the force with which the Chinese government exercises its power. On
the other hand, the analysis of the organization has shown the reactive and opportunistic
nature of the decisions taken by the producer related to Fair Trade activities. However, it is
also important to stand out the circulation of Fair Trade products and the implementation of
good practices, even if they are not the first priority of the organizations to make Fair Trade.
In short, it can be concluded that the establishment of Fair Trade activities in China is very
low, standing out the lack of knowledge and promotion made by the government,
organizations and population. To conclude, it can be affirmed that China has a weak relation
with Fair Trade movement. Anyway, the number of Fair Trade organizations is slowly
growing. Therefore, it is very important to continue promoting this type of trading as
alternative to traditional commerce to reduce number of people condemned to live in poverty.
Ultimately, the investigation brings to light different topics to use in future investigations.
The existing information gap about the legal regulation of NGOs in China, the different
channels used by the current organizations to overcome these difficulties, the case of Chinese
companies working within China in Fair Trade, the lack of coordination between marketing
and personal networks or in-depth study of the necessities required by Chinese organizations
to become strong are some of the lines of investigation which arise to continue working on it.
So, this research answers to a variety of questions but at the same time it opens new ones to
continue investigating and studying thoroughly.
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