Jack Ma and the Chinese Tech Titans’ Mission to Donate Billions
In Hangzhou, the hometown of Jack Ma, the vast home of the founder of Alibaba has its own food supply in a national wetland park. But the complex is only one of its vast land holdings in the city.
“Its nickname is ‘half of Ma city’,” said a retired 10m city government official who has worked with Alibaba for more than ten years. He noted that Ma’s assets were partly purchased and partly received as a gift from the government as a result of donations.
For years, the excess of Chinese tycoons has been a legend. From Victoria Peak in Hong Kong to Kensington Palace Gardens in London and New York’s Upper East Side, they’ve taken over the world’s most expensive properties. Many have collected an array of prestigious acquisitions, from English football clubs and Bordeaux vineyards to Hollywood studios and international newspapers.
Now Ma and her clique of billionaire tech titans have an urgent mission to display their socialist spirit through a wave of public donations and charitable pledges.
A sudden explosion of benevolence has seen billions of dollars redirected from corporate coffers and personal bank accounts to state-related causes in recent months, as the country’s richest and most powerful business elites attempt to appease Xi Jinping, the Chinese president.
However, within China’s growing philanthropy industry, the donation campaign has been met with skepticism as fears of tightening state control escalate.
The deluge of generosity follows a barrage of tech-driven regulatory and political restrictions from Beijing, a sweeping crackdown that has slashed tens of billions of dollars in the value of some of the nation’s largest companies and hammered personal wealth of their founders.
“The scary part [for donors] it’s that they don’t know how much is enough, ”said the head of a large Beijing charity. “All they can do is look at how much their peers have given and try to match it.”
The Chinese Communist Party’s focus on wealth redistribution intensified this month after Xi called for tighter regulation of “excessively high incomes” and decided “to encourage groups and businesses. high-income earners to return more to society ”.
The Chinese leader, whose comments were relayed by state media after a high-level economic planning meeting last week, also reiterated that China’s achievement of “common prosperity” was the key demand of the country. socialism.
Days after Xi’s comments posted last week, Tencent, one of China’s largest social media, games, and fintech groups, announced it would set aside Rmb 50 billion (7.7 billion dollars) for a “common prosperity agenda”.
This week, Chen Lei, managing director of Pinduoduo, one of China’s largest e-commerce platforms, joined the pledge campaign, pledging to contribute $ 1.5 billion of the company’s future profits to support agricultural modernization and rural revitalization.
Others have announced new social contributions in recent weeks, including Zhang Lei’s private equity group, Hillhouse Capital, and Xing Wang, founder of the Meituan food delivery company.
Following the deadly flooding in Henan last month, a group of tech groups, including Alibaba, ride-sharing group Didi, Tencent and Pinduoduo, all donated tens of millions of dollars to recovery efforts.
Over the past 10 years, the amount of cash donations given each year by China’s top 10 entrepreneurs has nearly tripled, according to data from the Hurun Research Institute, a China-based research group. Data compiled by Bloomberg suggests that Chinese billionaire donations this year are already 20% higher than in 2020.
Now, however, the pressure appears to be mounting on companies and tycoons to reorient their charitable activities with the Chinese Communist Party, a change that experts say threatened to undermine their good intentions.
According to a senior Chinese financial official, while officials have long encouraged charitable giving – often referred to as the third or “tertiary” distribution of income – they were now at the forefront of the party’s political agenda.
“Tertiary distribution has been mentioned in government documents for 30 years,” said the executive, who asked not to be named. “But until last week, no one read these documents. Now everyone reads every word.
The executive added that his own business was expanding its charitable activities: “It’s the right thing to do. We have created all this wealth thanks to the Chinese market. It is right that we also contribute to society.
Beijing’s charity executive said that since China’s revised charity laws came into effect five years ago, non-governmental organizations have come under “scrutiny” as authorities seek to curb the rampant growth of private sector groups that were seen as an erosion of party control.
Instead, donations should benefit state-related initiatives at the expense of grassroots groups.
“It is very difficult to get approval to create new private charitable groups. For example, there was not a single newly approved NGO in Haidian last year, ”he said, referring to one of Beijing’s more developed districts.
“Government-backed charities will become the primary beneficiary of the latest policy initiative. Private companies will gain political credit for financing government projects. “
Scott Kennedy, an expert on Chinese economic policy at the Center for Strategic and International Studies, a US think tank, noted that many top Chinese leaders have gained reputations for their individual philanthropy, especially after Ma of Alibaba led a wave of entrepreneurs to create private trusts.
Kennedy warned that Beijing’s efforts to boost charitable giving risked having “the opposite effect”, reducing “genuine enthusiastic support” and increasing state-led philanthropy.
“This fits with Xi Jinping’s broader tendency to reduce the influence of civil society. The party is extremely uncomfortable with independent public behavior that provides public goods or holds the state accountable, ”he said.
“But at the end of the day, the main goal of the party is to try to assert its dominance and control over all aspects of life in China.”
By Edward White in Seoul, Tom Mitchell in Singapore, Sun Yu, Christian Shepherd, Ryan McMorrow, Sherry Fei Ju, Nian Liu in Beijing and Wang Xueqiao in Shanghai