Jack Ma and the Chinese tech giant’s mission is to donate billions of dollars

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In Jack Ma’s hometown of Hangzhou, the spacious home of the founder of Alibaba has its own food supply in the National Wetland Park. But the compound is just one of the large amounts of land he owns in the city.

“His nickname is’the horse of half a city,'” said a retired government official who has worked at Alibaba for more than a decade in this city of 10 million people. He pointed out that some of Jack Ma’s assets were purchased after donations from the government, and some were received as gifts.

Over the years, the surplus of wealthy Chinese has been a legend. From the Victoria Peak in Hong Kong to Kensington Palace Gardens in London and the Upper East Side of New York, they robbed the world’s most expensive properties. Many people collected a series of famous acquisitions from English football clubs and Bordeaux vineyards to Hollywood studios and international newspapers.

now Well And his billionaire technology giant group is carrying out an urgent task, which is to demonstrate their socialist spirit through massive public charitable donations and pledges.

In recent months, as China’s wealthiest and most powerful corporate elites try to appease Chinese President Xi Jinping, a sudden explosion of goodwill has shifted billions of dollars from corporate coffers and personal bank accounts to state-related causes.

However, within China’s growing philanthropy industry, as concerns about tightening state controls intensify, donations have been questioned.

Before the impassioned, Beijing introduced a series of technology-focused regulations and policy restrictions. This widespread crackdown has shrunk the value of some of China’s largest companies by tens of billions of dollars and severely damaged the personal wealth of the founders.

Chinese tycoons snapped up many of the most expensive properties in the world, including Kensington Palace Gardens in London © Hannah McKay/PA

“The terrible part [for donors] It’s enough that they don’t know how much,” said an executive of a large charity in Beijing. “All they can do is see how much their peers are paying and try to match it. “

After Xi Jinping called for strengthening the supervision of “excessive income” and taking measures to “encourage high-income groups and enterprises to return to society more,” the Chinese Communist Party paid more attention to wealth redistribution this month.

The Chinese leader made comments after a high-level economic planning meeting last week. He also reiterated that China has achieved “Common Prosperity“It is the essential requirement of socialism.

A few days after Xi Jinping’s comments last week, Tencent, one of China’s largest social media, gaming and fintech groups, announced that it would allocate 50 billion yuan ($7.7 billion) for the “Common Prosperity Plan.”

This week, Chen Lei, CEO of Pinduoduo, one of China’s largest e-commerce platforms, joined the pledge action, promising to contribute 1.5 billion US dollars of the company’s future revenue to support agricultural modernization and rural revitalization.

Others who have announced new social contributions in recent weeks include Zhang Lei’s private equity group Hillhouse Capital and Wang Xing, the founder of food delivery company Meituan.

After a record-breaking downpour in Zhengzhou, Henan Province, central China, a man took a woman along a flooded street
After the Henan floods, a group of technology groups including Alibaba and ride-hailing group Didi donated tens of millions of dollars for restoration work © Chinatopix/AP

After the deadly Henan floods last month, a group of technology groups including Alibaba, ride-hailing group Didi, Tencent and Pinduoduo have donated tens of millions of dollars for recovery work.

According to data from the Hurun Research Institute, a Chinese research institution, the amount of cash donated by China’s top 10 entrepreneurs has nearly tripled in the past 10 years. According to data compiled by Bloomberg, Chinese billionaires’ donations this year have been 20% higher than those of the whole of 2020.

However, now, companies and tycoons seem to be under increasing pressure to synchronize their charitable activities with the Chinese Communist Party. Experts say this change may undermine their good intentions.

According to a Chinese financial executive, although officials have long encouraged charitable donations—often referred to as the third or “third-tier” income distribution—it has now become the top priority of the party’s policy agenda.

The executive, who asked not to be named, said: “For 30 years, government documents have mentioned three-level allocation.” “But until last week, no one had read these documents. Now everyone is reading every word.”

The executive added that his own company is expanding its philanthropic activities: “This is the right approach. Because of the Chinese market, we have created all this wealth. We also contribute to society, which is also fair to us. of.”

The Beijing charity executive said that since China’s revised charity law came into effect five years ago, NGOs have been under “rigorous scrutiny” as the authorities try to curb the uncontrolled growth of private sector groups seen as weakening the party’s control. .

Instead, these donations are aimed at benefiting state-related initiatives at the expense of grassroots groups.

“It is difficult to get approval for the establishment of a new private charity. For example, last year there was no newly approved NGO in Haidian,” he said, referring to one of the most developed areas in Beijing.

“Government-supported charities will be the main beneficiaries of the latest policy initiatives. Private companies will provide funding for government projects, thereby gaining political credit.”

Scott Kennedy, an expert on Chinese economic policy at the Center for Strategic and International Studies of the US think tank, pointed out that many senior Chinese executives are well-known for their personal philanthropy, especially Jack Ma of Alibaba who led a wave of entrepreneurs to create private trusts.

Kennedy warned that Beijing’s efforts to increase charitable donations could have “the opposite effect”, reducing “true enthusiastic support” and intensifying state-led philanthropy.

“This is consistent with the broader trend of reducing the impact of civil society under Xi Jinping. The party is very uncomfortable with independent public actions that provide public goods or hold the country accountable,” he said.

“But in the final analysis, the main goal of the party is to try to maintain its dominance and control over all aspects of Chinese life.”

Authors: Edward White in Seoul, Tom Mitchell in Singapore, Sun Yu, Christian Shepherd, Ryan McMorrow, Sherry Fei Ju, Liu Nian in Beijing and Wang Xueqiao in Shanghai

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