Social Enterprises in China

Abstract: In the last two decades, under the leitmotiv of the economization of the Chinese welfare system, the Chinese government shifted the provision of social services from the state to the local level and harnessed more and more civil society organizations as providers of cost-effective social welfare services. As many Chinese social enterprises (SEs) operate in the area of social service provision, health service and poverty alleviation, political decision-makers view them as an innovative way to address social problems and a welcome opportunity to engage in affordable welfare provision. This integration into the existing system in combination with the fact that SEs have predecessors in China points to elements of path dependence in social policies. Since the emergence of SEs in the last decade, a plurality of national and international support organizations has burgeoned- Nonetheless, most SEs are small and rarely sustainable. Many SE’s lack a clear definition and are frequently unknown to politicians and even more to the public. This lack of information creates difficulties in acquiring sufficient funding from various political levels or foundations to scale up operations. Likewise, they operate under numerous and often hybrid legal forms as the regulatory environment is uncertain and in large parts unfavorable towards charitable organizations. A ray of hope in this context is the recently introduced first charity law of China. For the future, it remains to see what impact it will have on the development of SEs.