The first China Business Health Index was jointly released by Zhejiang University and Consulting Group Horizon.
Comprised from surveys taken from over three hundred independent and private businesses, the index aims to explore the current health of Chinese enterprises in areas such as corporate social responsibility, legal frameworks and entrepreneurship.
The President of Shanghai Aroma Fashion Company, Diwu Birong, sees the benefit the index could provide for the longevity of Chinese enterprises and strategy development:
"The index is valuable in the sense of helping the Chinese enterprises to grow in a sustainable way. We used to pay close attention to profits only. At the same time, it provides many detailed indicators of how healthy your business is. We can use these indicators to evaluate our own businesses, find out the problems and then improve."
But the chairman of Horizon Consulting, Victor Yuan, sees the health of Chinese enterprises as more about personal conduct and moral requirements:
"For most individuals and individual entrepreneurs, health means their better personal behaviour. It's not just an excuse to talk about, people like to talk about policy, government policy and maybe some over-strong government interference. I think the healthy situation would be if as a business person, you know what your boundary for responsibility is and what is your responsible behaviour to doing business".
The index has revealed China's current business strengths lie with entrepreneurial spirit and responsibility to society, but lags behind in terms of regulation adherence and marketing.
The dean of the School of Management at Zhejiang University Professor Wu Xiaobo, also believes more intangible assistance is required from the government to ensure the free movement of markets and company performance.
"The registration systems are very important and keeping the fair play is important. And one thing is the government plays the role as the father in China, take care of all their boys. Some boys are good, some boys are bad so we see all those governments changing regulation to try and look after their old companies. But actually there're some companies that should have failed and been eliminated from the market."
As China's economy tries to shift from one based on manufacturing and exports to a services and domestic consumer oriented economy, the health index will offer guidance for businesses on how to ensure continued innovation.
It will also act as a pro-active social and moral compass for companies to achieve long-term sustainability.
For CRI I'm Rob Costelloe.
