A nation in dramatic transition, China is poised to shape the global economic and environmental landscape for decades to come. It's the most populous nation on the planet, with 1.3 billion people.1 It's the second largest economy in the world, with more than a trillion U.S. dollars in imports and exports each year.2 It's home to more Internet and mobile-phone users than any other country on the planet.1 And while China acknowledged in 2010 that it emits more greenhouse gases (GHG) by volume than any other nation,3 it's also a leader in clean energy finance and investment. Current estimates put China on a path to attract $620 billion USD in investments in renewable energy over the next decade.4
In almost every issue dominating the international spotlight, China plays a critical role. It's integral to any discussion of where the world is now and where it's going, and the information technology (IT) industry is no exception.
HP has been conducting business in China since 1981, when we opened our first office there. We now have a headquarters and an HP Labs facility in Beijing, as well as eight regional offices to support our work in 689 Chinese cities. And we continue to expand our presence there. In 2010, HP acquired 3Com Corporation, along with its China-based subsidiary, H3C.
As the world's largest IT company, our presence in China makes good business sense, given its large manufacturing workforce and consumer market. As a good global citizen, we also recognize our responsibility to make a bigger contribution. Beyond manufacturing and selling products, we create local jobs, work to improve labor conditions in the electronics industry supply chain, build IT skills in Chinese communities, and do our part to reduce the environmental impact of IT.
The scope of our efforts in China illustrates our broader commitment to global citizenship. We are in China for China, conducting efficient, responsible operations while contributing to economic and social progress in this dynamic nation.
Investing in the local economy
About 75% of HP's global spending on product materials, components, and manufacturing and distribution services is in the Asia Pacific region. Most of that is centered in China, helping to create jobs, open doors to new opportunities for skilled workers, and provide an economic boost to local communities.
Many of these newly created jobs are in manufacturing our products for the global market and, in many cases, for the Chinese market in particular. In fact, with the exception of some high-end workstations, 100% of HP PC products sold in China are made in China.
In 2010, we opened an HP-operated manufacturing facility in Chongqing, with the capacity to produce up to 40 million PCs a year. The new facility in central China moves Chongqing closer to its goal of becoming a major technology hub.
We also invest in China's enormous potential for innovation. In 2005, we established HP Labs China, where HP experts collaborate with Chinese academics and the larger research community. Their fresh ideas and creativity are expected to help us give consumers and businesses worldwide new ways to mine and manage ever-growing quantities of information, and advance innovations in networking and automated publishing.
Building a more responsible supply chain
HP manages one of the world's most extensive IT supply chains, and that comes with great responsibility. Around the world, we work closely with our suppliers to help ensure that they live up to HP's rigorous labor and environmental standards. Because a large proportion of HP suppliers have facilities in China, what we learn there provides valuable insight we can use to raise standards for all electronics manufacturers. When issues arise at our suppliers' facilities, we try to face them head on, with an approach grounded in collaboration and education.
For example, in 2010, HP supplier Foxconn faced unprecedented challenges when more than a dozen workers committed or attempted suicide at two factories in Shenzhen, China. In response, HP supplemented traditional audits and ongoing meetings with senior executives at Foxconn with third-party and HP-led worker attitude surveys at Foxconn facilities. Among other desires, the workers surveyed said they wanted better wages and communication between employees and management. Based on the results of the surveys and several group interview sessions, HP and Foxconn executives agreed on corrective action plans, including implementing supervisor training, reducing overtime working hours, and more. HP continues to work closely with Foxconn to support its SER efforts and ensure sustained progress. Learn more about HP's efforts with Foxconn.
We also addressed employer discrimination against workers with hepatitis B (HBV). In China, there are widespread misconceptions among employers about how the disease is transmitted. HBV only spreads through direct contact with bodily fluids, but many employers mistakenly fear that hiring someone with HBV will spread the disease throughout the workforce. As a result, HBV carriers are rarely hired, and those who are often face discrimination from co-workers. Some employers even include HBV tests in employee hiring processes, which HP considers to be a violation of the nondiscrimination provision of HP's Electronic Industry Code of Conduct. Working with the nongovernmental organization (NGO) Inno Community Development Organisation, we launched an entertaining and educational campaign to dispel misconceptions and combat discriminatory practices. The campaign reached nearly 20,000 employees at seven supplier sites. As a result, managers and employees have gained a more accurate understanding of HBV. HP identified several positive changes to supplier policies and attitudes following the training. In 2010, 4% of audits had nonconformances in this area—a reduction from previous years. Learn more about reducing HBV discrimination in China.
Developing skills in local communities
In our community outreach efforts around the world, we've seen how people thrive personally and professionally when given new technology and the skills to use it. Our programs in China support this.
Through our Rural Harvest Program in China, we've broadened access to technology for an estimated 2 million people from rural areas in 31 Chinese provinces. We're working with recent university graduates in villages across the country to find where we can make the biggest impact on people's everyday lives. For example, one project has enabled children in Sanwang Village, in Anhui Province, to use HP equipment to video chat with their parents working in urban areas.
To inspire and train aspiring small business pioneers worldwide, the HP Learning Initiative for Entrepreneurs (HP LIFE) offers business and IT skills training to help get new microenterprises off the ground and on to long-term prosperity. Case in point: In 2007, Xiao Shengzhang, an unemployed Chinese agricultural worker, started his own business growing and selling herbal remedies. With training from HP's Graduate Entrepreneurship Training through IT (GET-IT) program, now part of HP LIFE, he learned the business and IT skills he needed to help his new venture succeed. Before then, Xiao had never used the Internet. Now, his website is the cornerstone of his thriving business, which employs more than 2100 people.
Through HP LIFE, we also give young people a jump-start on successful careers, particularly in technology-related fields. In China, we offer IT training to students and new graduates at five major universities. HP provides many of the practical job skills students need to meet the increasing demand for technical expertise in the country's growing IT economy. To date, more than 13,000 students in China have participated in HP LIFE or a predecessor program.
Reducing environmental impact
As China's industrial economy continues to grow at a rapid rate, so do its GHG emissions. With our broad reach among suppliers and customers in China, we intend to be part of a long-term solution to this challenge.
HP was the first major IT company to report the GHG emissions of its suppliers in 2008, including many facilities in China. In 2009, the last year for which data are available, estimated total emissions were the same as we reported for 2007, despite being attributable to a higher proportion of our supplier spend and representing a 4% increase in absolute U.S. dollar spend covered by the data. A growing number of our suppliers worldwide, including in China, have set goals to improve performance. People.com.cn, an influential government website in China, recognized HP China as the country's Low Carbon Champion for 2010.
We are also working with Business for Social Responsibility (BSR) on a yearlong pilot program to help our suppliers in China reduce energy use, GHG emissions, and costs. Eight of our suppliers with 12 facilities in the country joined the initiative, which has helped them develop energy improvement plans, share best practices, and learn from energy-efficiency experts. The program shows promise as a model for future initiatives in China and other countries. Learn more about our partnership with BSR in China.
And, in China, as in all of the countries in which HP has a presence, we help businesses and consumers reduce their own environmental impact, conserve energy, and get the most out of the IT they use every day. Learn more about HP and energy efficiency.
Whether creating jobs, providing technology education, working with suppliers, or decreasing impact on the environment, we're making a difference in China beyond our own business operations. In China, and in every country in which we manufacture or sell our products, our commitment to global citizenship pushes us to work toward economic, social, and environmental progress, for our own success and for a more sustainable future.
- 1 The World Factbook 2009. Washington, DC: Central Intelligence Agency, 2009. https://www.cia.gov/library/publications/the-world-factbook/index.html.
- 2 The US-China Business Council, 2009 data, www.uschina.org/statistics/tradetable.html.
- 3 "China says it is world's top greenhouse gas emitter," Reuters, November 23, 2010.
- 4 Global Clean Power: A $2.3 Trillion Opportunity, Pew Charitable Trusts, 2010.