The story below from The Wall Street Journal Asia last week gives a snapshot of what Chinese companies are starting to do in the area of sustainable development and CSR.  As Beijing 2008 and World Expo Shanghai approach, I believe we will see domestic business setting the CSR agenda within the PRC.

BEIJING -- As state-owned Chinese firms come into their own, some are following their Western counterparts in projecting a kinder, more socially responsible image to win -- and keep -- customers.

Socially responsible initiatives often aren't immediately translated into profits and are typically seen as intangible marketing efforts. But the Chinese corporate world is increasingly using corporate social responsibility to strengthen competitiveness.

"There's a growing understanding that simply by being big and successful, it won't be enough [in China]. There's a growing group in society, including among people in government, saying 'What are you giving back?' " said David Wolf, president and chief executive of corporate advisory firm Wolf Group Asia Ltd. in Beijing.

Corporate social responsibility is linked to another notion being discussed in China: sustainable development. The idea is that companies should consider the social and environmental consequences of what they do, in addition to short-term financial considerations.

In China, such stirrings of the social conscience began to emerge just a few years ago. Multinationals were forerunners, using corporate social-responsibility projects to retain staff, boost worker morale and improve their image with the government.

One of the handful of companies to have embarked on corporate social-responsibility projects is Baosteel Group Corp., one of China's largest state-controlled firms. In 2006, Baosteel issued its sustainability report on its environmentally friendly work, including technology improvements in steelmaking, funding and support of poor communities to develop education and local infrastructure.

"Chinese companies know corporate responsibility is important, but they don't know how to do it," said Guo Peiyuan, general manager of SynTao Co., a company that runs a local Web site that tracks corporate social- responsibility trends in China.

In 2003, Chinese oil giant China Petroleum & Chemical Corp. spearheaded the founding of the China Business Council for Sustainable Development for the exchange and sharing of information and practices between firms, and with the government. But four years after, just 53 enterprises have become members, suggesting that not enough firms understand its work.

The council's executive president, Wang Jiming, hopes to lure at least 10 more members this year, including computer maker Lenovo Group Ltd. and French energy giant Total SA. The council hopes the big names will raise its profile and highlight that the forum isn't exclusively local or foreign, as is the case of most other business chambers in China.

The council recently submitted to the government a proposal for a standard measure of corporate social responsibility, as China's consumers become increasingly sophisticated and socially aware.