CSR has been a foreign concept for Chinese firms. It was first introduced into the Chinese Corporate Law in 2006. Yet, many companies lack of adequate knowledge of CSR and also the institutional support such as NGOs were also underdeveloped. At the early stage, how did companies engage in CSR activities? We find that small and medium sized companies, especially those being endorsed by the government faced a stronger pressure to engage in CSR activities. However, they strategically chose to engage more in donation, which incurred smaller costs and invited little interference into internal operation. At the same time, they engaged much less in environmental protection which would impose more constraints on firms’ operation and also long term costs. To summarize, Chinese firms’ CSR engagement at this early stage was largely a political driven process.