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UPDATED: November 7, 2011 NO. 45, NOVEMBER 10, 2011
Between Charity and Business
Chinese social entrepreneurs seek to solve social problems by using a business approach
By WANG HAIRONG
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THE RABBIT KING: Alan F. Holmer (right), special envoy for China and the U.S.-China Strategic Economic Dialogue, visits Rabbit King Ren Xuping's (left) farm in Dayi County, Sichuan Province on March 6, 2007 (CFP)

The journey from poverty to prosperity can take many paths. Ren Xuping went from an impoverished rural boy in Dayi County, Sichuan Province, to a multimillionaire businessman thanks to rabbits.

At the age of 13, Ren dropped out of school because his family could not afford the fees. To cheer him up, his father bought him a pair of rabbits. One of the female rabbits was pregnant and gave birth to eight babies. Ren sold the babies and was paid the equivalent of half an adult's monthly salary at that time.

With this first income, Ren bought more female rabbits and kept repeating the cycle. His business snowballed. By the age of 16, his business was generating 400,000 yuan ($202,000 by the exchange rate in 1983), making him extraordinarily wealthy by the standard of the time.

Today, his rabbit farm breeds 2.3 million rabbits annually, and generates a sales volume of 23 million yuan ($3.5 million). He also owns a fur company, a food company, a training school and a poverty alleviation study center.

Ren has used his experience and skills to lift others out of poverty. In 1990, he established a training school to teach others how to start rabbit rearing businesses. More than 300,000 people, from various places in China and countries such as Nepal, Thailand and India, have been trained in this school. Most of the trainees have managed to increase their incomes as a result of his training.

Now more than 40 percent of farmers in Dayi County raise rabbits, which have become the county's major source of income. The farmers credit their success to Ren, China's Rabbit King.

New concept

Ren was described as a social entrepreneur in a book published in China in 2010 by Global Links Initiative, a U.K.-based non-profit organization which aims to "support positive and creative action on social inclusion and citizen empowerment worldwide."

The term "social entrepreneur" was introduced in China around 2006, when U.S. journalist David Bornstein's book How to Change the World was translated by Wu Shihong, former general manager of IBM China and Microsoft China. Bornstein's book described how individuals he called "social entrepreneurs" solved social and economic problems with innovative grassroots approaches.

"There is no universal definition for social enterprises or social entrepreneurs," said Chu Chaoyu, Director of the Social Service Center of Amity Foundation, a non-profit organization based in Nanjing of east China's Jiangsu Province. "Their most salient feature is the use of business approaches to achieve social goals," Chu said.

Jia Xijin, a Tsinghua University professor studying non-profit organizations, said that social enterprise is a social rather than legal concept so an organization run by social entrepreneurs does not necessarily enjoy tax privileges.

"When the concept of social entrepreneurship was introduced in China, many people working in the non-profit sector were very excited, expecting that it would lead Chinese non-governmental organizations (NGOs) to overcome many obstacles and develop rapidly," said Chu.

According to Chu, Chinese NGOs face three major growth bottlenecks: insufficient policy incentives, a lack of funding, and low credibility. However, he does not think social entrepreneurship alone will remove the obstacles confronting NGOs, although he believes its key elements—ethics, innovation and adventure—will help NGOs solve their problems.

"Social entrepreneurship will inspire more NGOs to think innovatively and explore new opportunities so as to improve their own efficiency and effectiveness," Chu said.

Since 2009, the British Council has run training seminars on social entrepreneurship to "identify and equip a new generation of NGO workers in China who have the skills and desire to solve social problems using business strategies." Some British social entrepreneurs have been invited to China to share their experiences.

So far, 580 established and would-be Chinese social entrepreneurs have attended the British Council's trainings, and 35 organizations have obtained funding totaling 5 million yuan ($770,000), according to China News Week, a Beijing-based magazine.

"The most important purpose of the training is to change traditional thinking about philanthropy," said Peng Yanni, Assistant Director of Society and Development at the British Council's Beijing office. Peng said it prompts charitable organizations to think beyond fund raising and try a business approach.

"While the concept has inspired some Chinese philanthropists to adopt business approaches and techniques to promote their causes, China's mainstream academic and business communities as well as the Chinese Government have not yet shown much enthusiasm for the concept," said Wang Haijun, a program officer at the British Council's office in Shanghai.

"Overall, social enterprises in China are still in their infancy. It is hard to say how many such enterprises are out there. There are few successful cases," Peng said.

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