Billionaire Donations Soar in China Push for ‘Common Prosperity’

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Billionaire Donations Soar in China Push for ‘Common Prosperity’
Bloomberg News
2021年8月26日 GMT+8 下午1:15

• President Xi Jinping has been emphasizing social equity
• Tech billionaires contribute major philantrophic donations

Seven Chinese billionaires have directed a record $5 billion to charity so far this year, according to data compiled by Bloomberg News, a sum that exceeds by 20% total national giving in 2020. Their pledges, whether through corporate interests, foundations or personal wealth, arrive as President Xi Jinping pushes for “common prosperity,” a sprawling campaign to close the country’s wealth gap.

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The country's wealthiest have donated at least $5 billion so far this year

Xi has emphasized wealth redistribution within China, referring to “common prosperity” goals at least 65 times in speeches and meetings this year, more than double the 30 mentions in all of last year.


It’s not clear what all the policy implications of the campaign will include, but China has identified a “third distribution of wealth” -- individual giving and corporate philanthropy -- alongside government and market interventions.

In a high-level meeting chaired by Xi on Aug. 17, the government said it “should reasonably adjust excessive incomes and encourage high-income people and companies to give back more to society.” This idea of a “social hand,” according to state media, will rely on moral obligation and social expectation to inspire the country’s richest to divest some of their personal wealth.

MONTH	AMOUNT	DONOR	RECIPIENT
August	$154.3M	Taikang Life Insurance Co. (Chen Dongsheng)	Wuhan University
July	$2.2B	Lei Jun (Xiaomi)	Xiaomi Foundation, Lei Jun Foundation
June	$77.3M	Zhang Yiming (ByteDance)	An education fund in Fujian
June	$2.3B	Wang Xing (Meituan)	Wang Xing Foundation
April	$15.4M	Yang Yuanqing (Lenovo Group)	Shanghai Jiao Tong University
March	$154.3M	Li Yongxin (Offcn Education)	Peking University
March	$100M	Starry Night Foundation (Colin Huang)	Zhejiang University

The sum of the biggest pledges so far this year already exceeds the nearly 27 billion yuan ($4.2 billion) donated by individuals and Chinese companies in all of 2020, according to the China Charity Ranking, which asks individuals, firms and foundations to report their giving. The full total is higher: high-profile companies and wealthy celebrities, strongly encouraged by state media and online partisans, contributed to more than $600 million in donations for flood relief efforts in Henan Province.

Tech giants have also pledged current and future corporate profits to invest in philanthropy projects, including $15 billion set aside by Tencent Holdings Ltd. for its social responsibility programs and Pinduoduo Inc.’s 10 billion yuan investment for agriculture development.

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Pinduoduo is giving its entire profit for last quarter back to rural China

By Laura He, CNN Business

Updated 0941 GMT (1741 HKT) August 25, 2021


(CNN Business)One of China's biggest tech firms has pledged to hand over its entire profit for the last quarter to rural development projects in the country as Beijing steps up the pressure for wealth redistribution.

E-commerce firm Pinduoduo (PDD) on Tuesday pledged to donate the $372 million it made in the three months through June 30 toward the development of China's agricultural sector and rural areas. In total, it expects to donate 10 billion yuan ($1.5 billion) toward such causes.

"This is an important and challenging task, which we will invest in patiently," said Chen Lei, chairman and CEO of Pinduoduo, adding in a statement that he would personally oversee the project.

The decision is significant for the Nasdaq-listed company, which posted a profit for the first time as a public company in the June quarter.

Pinduoduo has never paid a dividend since it listed three years ago. But its stock has more than tripled, delivering handsome returns to shareholders.

The company's stock soared 22% in New York on Tuesday after earnings.

The donation move by Pinduoduo follows a similar charitable pledge that internet and gaming company Tencent (TCEHY) made last week, when it announced it would put 50 billion yuan ($7.7 billion) toward achieving Beijing's goal of "common prosperity" for all people. The company said it would support increasing income for the poor and addressing education inequality, among other initiatives.

That phrase — "common prosperity" — is a historically significant one in China, and was used recently by President Xi Jinping as he promised a new push to redistribute wealth in the country. His mention of the term in the context of wealth redistribution echoed its use by Chairman Mao Zedong in the middle of the last century. The former Communist leader advocated "common prosperity" back then to mobilize poor peasants and take power away from the rural elites — rich landlords and farmers.

Xi's edict has piled even more pressure on the country's richest citizens and businesses, which are facing tougher regulations as Beijing reigns in the power of the private sector.

In its statement Tuesday, Pinduoduo also publicized its ongoing support of government social causes. It pointed to a commendation it received earlier this year from the ruling Communist Party for contributions to a major campaign to alleviate poverty — a key policy goal for Xi.

Pinduoduo's announcement also comes days after the government launched a probe into the relationship between businesses and local governments in Hangzhou, the home of Alibaba (BABA). The Central Commission for Discipline Inspection (CCDI) — the Communist Party's top anti-graft watchdog — said it would require government officials to resolve any conflicts of interest involving themselves or their families.

Founded in 2015 by Colin Huang, Pinduoduo has quickly grown into a formidable e-commerce company.

It's still a long way from surpassing industry leader Alibaba in market share. Pinduoduo holds about 10% of the market, behind Alibaba (BABA)'s 53% and competitor JD.com (JD)'s 19%, according to estimates by Guiyang-based Huachuang Securities.

But the company has edged out its biggest competitor in at least one important way: It had 850 million active users in the twelve months through June, surpassing Alibaba's 828 million.

Pinduoduo is giving its entire profit for last quarter back to rural China

One of China's biggest tech firms has pledged to hand over its entire profit for the last quarter to rural development projects in the country as Beijing steps up the pressure for wealth redistribution.

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