In the past 30 years, China has experienced the biggest migration in human history as more than 250 million rural workers have moved to coastal cities and factory towns to seek their fortunes. These migrants typically take on labour intensive jobs that have powered China's rise and lifted hundreds of millions of Chinese out of poverty.
When they move to the cities, however, migrant workers usually leave their children behind. This is because their new accommodations are often cramped, costs of living are much higher, and China's residency laws bar rural citizens from fully accessing urban social services such as health care and education.
According to a report by the All-China Women's Federation, about 61 million Chinese children – one of every five in the world's most populous nation – haven't seen one or both parents for at least three months. Most so-called "left behind" children live with their grandparents or other relatives, but two million of them have no adult guardian in the home.
Typically, migrant parents only return once per year – during the lunar New Year holiday, and the long separations are hard on children and parents alike. They are often cited for a host of social and psychological problems. According to one study cited in the Wall Street Journal, "More than 70% of children in rural China show signs of mental-health problems such as anxiety and depression."
Shengshi Jingxiu is a social enterprise that addresses this wrenching social problem. It creates well paid jobs in the poor, rural south-western province of Guizhou in order to entice prospective migrant parents to stay at home with their children. Over 35% of Guizhou's population is comprised of non-Han Chinese ethnic minorities such as the Miao and Dong.
These groups, who are related to the "hill tribes" of Vietnam, Laos and Thailand, produce handsome traditional handicrafts such as embroidered fabrics, dyed batiks and finely wrought silver wares. Shengshi Jingxiu trains and pays women in ethnic minority communities to use these traditional techniques in manufacturing high end design products which they then sell across China. So in addition to providing employment for women and supporting families to stay together, the organisation helps preserve traditional minority culture.
According to He Bowen, its chief marketing officer: "what we do may look very simple, but it is actually very complicated. First, we have organised disparate household craft producers into structured community enterprises. Second, we have trained 3,000 women embroiders, and will train another 1,000-2,000 more this year. Third, we have developed a very fashionable line of clothing and household goods, enabling us to command high prices for our products and develop a thriving business."
Mr He is confident that Shengshi Jingxiu will be able to scale up and support more beneficiaries because they recently secured investment funding from LGT Venture Philanthropy through the Social Investment Platform which the British Council operates in China. "We enjoy a vast business development potential and can turn ourselves into a highly influential brand with this investment," says He.
Shengshi Jingxiu is one of 15 Chinese social enterprises to garner funding and incubation support worth a combined total of £900,000 from eight British Council partners through the Social Investment Platform. Announced in an awards ceremony in Beijing last month, these 15 social enterprises were among 268 social enterprises that applied to join the Platform. The eight Chinese and international partners selected which social enterprises they would invest in through a multi-stage business plan competition that included a "Boot Camp", where 63 social enterprise leaders received training and incubation support from UK and China social enterprise experts, a trip to Hong Kong to lead breakout sessions at the Social Enterprise Summit, and a final round of pitches before the investors.
The 15 winning social enterprises support a range of socially beneficial missions including elderly care, poverty alleviation, tech support for the hearing impaired, organic farming, nursing and childcare, and environmental protection. In addition to securing funding and mentoring, the 15 winners will participate in a study tour funded by HSBC to meet UK social entrepreneurs and intermediary organisations.
The British Council has supported the development of social enterprise in China since 2009 by training over 1300 Chinese social entrepreneurs, hosting policy dialogues, sharing UK best practice and forming partnerships with organisations that fund and mentor social enterprises.
According to Dr Mairi Mackay, who leads the British Council's Global Social Enterprise programme, "Social enterprise is thriving in China today but social entrepreneurs often struggle to access the capital, networks and mentoring they need to reach significant scale. We launched the Social Investment Platform to connect established social entrepreneurs with social investors and provide them with the support they need to grow into thriving social businesses that can attract and deploy substantial capital."
LGT Venture Philanthropy, which invested in Shengshi Jingxiu, is a Lichtenstein-based fund that supports social-purpose organisations around the world through financing, mentoring and access to business networks.
According to Crystal Ding, LGT Venture Philanthropy's China Representative, "LGT participated in the British Council's Social Investment Platform because this greatly enhanced our efficiency in selecting social enterprise to invest in." Ms Ding added that LGT invested in Shengshi Jingxiu because, "they have very effective sales channels and customers buy their products because they are very attractive and high quality, not out of sympathy for the disadvantaged women who produce them. Moreover, they deliver great social impact."
For funds like LGT, conducting due diligence to identify strong social enterprise can be costly and time consuming and this raises borrowing costs and minimum investment thresholds. Moreover, when social investors operate independently, there is a risk that they will reduplicate their efforts. "The result," explains Mairi Mackay, "is that there is funding support for social enterprises at the either ends of the spectrum – grants for start-ups and impact investment for high growth social enterprises – but little for those seeking to scale up early stage success." This 'critical discontinuity' in funding impedes the growth of social enterprise and investment, she says.
"The UK is working with other countries to support the development of social investment globally. Our platform supports this effort by identifying promising social enterprises, sharing information, increasing transparency and providing incubation. This lowers entry costs and encourages more market participation," Mackay says, adding that the British Council plan to extend the geographical reach of the Platform in Asia and bring additional partners on board. "We aspire to building a truly collaborative network so that social enterprises can address Asia's pressing economic, social and environmental challenges."
Contact the British Council at social.enterprise@britishcouncil.org
More from the British Council partnerzone:
• Social enterprise in East Asia - video
• Sir Ronald Cohen on social investment in the UK - video
• Planting the seeds of a social economy in Myanmar
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