Forbes China released its “2021 China Philanthropy List” on 20th, saying Alibaba Group founder Jack Ma topped the list with a donation of RMB 3.23 billion last year. In addition, the owners of Chinese cell phone maker Xiaomi, affordable online shopping platform Jindoduo and food delivery platform Meituan have recently donated huge sums of money to give back to society. Scholars analyze that the wealthy businessmen are donating to save their lives under the iron fist of the Chinese government’s anti-monopoly and tightening regulation, and are also responding to Xi Jinping’s call to build “socialism with Chinese characteristics” by taking the lead in donating to help the disadvantaged and alleviate the confrontation between the rich and the poor.
Chinese media reported that Chinese cell phone maker Xiaomi Group made a major announcement on the Hong Kong Stock Exchange on June 16, saying that Xiaomi Chairman Lei Jun had donated up to 616 million Class B shares of Xiaomi to two charities he helped found. The Wall Street Journal reported that based on Xiaomi’s closing price of HK$28.25 on the 16th, the value of the stock donation amounted to US$2.2 billion (about RMB14.26 billion). After the donation, Lei Jun’s stake in Xiaomi Group will drop to 10.6%.
Huang Zheng, the founder of the online shopping platform Jindo, and his team donated 2.37% of their shares to the Prosperity Charity Fund in the same year. The fund has pledged to donate $100 million (RMB 648 million) to a Chinese university in the coming years. In addition, Wang Xing, founder of the food delivery platform Meituan, donated more than $2 billion (about RMB 12.9 billion) of his shares to his charity foundation this year. Meanwhile, Zhang Yiming, founder of Jitterbug developer ByteBeat, donated $77 million (about RMB 500 million) to his hometown as an education development fund.
Government regulation at the forefront: Paying protection money to befriend the government?
In an interview with Radio Free Asia, Chen Hongda, a member of Taiwan’s Institute of Financial Studies and Research, said that the donation is a good thing as it is a corporate social responsibility, but the timing is too coincidental and certainly makes some associations.
Chen Hongda said: “This feels like paying protection money, making friends with the Chinese government, saying that he will cooperate with the policy. The timing is too coincidental, and so many people have donated. Especially the Chinese government is doing something in the name of ‘anti-monopoly’, and it may also strengthen the supervision of some such as Poundland that have gone to foreign listings.”
Chen Hongda also said that most of the Chinese government’s finances are spent on construction and national defense, “China has a big gap between the rich and the poor and social conflicts, [donations from wealthy businessmen] should also ease social conflicts. The Chinese government spends very little on social assistance.”
Western entrepreneurs donate as the norm, Chinese wealthy businessmen donate for different motives?
Taiwan Economic Research Institute senior analyst Qiu Weifang said in an interview with Radio Free Asia that it seems to be more like Chinese entrepreneurs’ personal financial planning, and it is difficult to comment from the perspective of industrial side and business operation. If we look at it from a global perspective, there are many examples of big entrepreneurs such as the founders of Microsoft, Google and other major U.S. technology companies, who also have plans to donate their assets. Whether it is from personal tax considerations or corporate social responsibility, it is all related to personal financial planning. If the shares are in one’s name, one can decide how to distribute them without the approval of the board of directors or shareholders’ meeting.
This is similar to the concept of “apportionment,” Yan Jianfa, a professor at the Department of Business Management at Chien Hsing University of Technology, told Radio Free Asia. “I believe they should be forced to make donations. There have been a series of capitalists who have ended up in a bad way, like Ma Yun and Ma Huateng, who had their properties confiscated, and many others who jumped off buildings and committed suicide. Because in the communist totalitarian system, accumulating too much wealth will cause trouble and trigger a sense of crisis among the rulers. Instead of being confiscated, it was better to donate. The successive donations became a trend, somewhat related to the ideology of the party as a whole.”
Xi emphasizes “socialism with Chinese characteristics” Rich businessmen give Xi face?
The company’s main goal is to provide a platform for the development of the company’s products and services. “You earn so much money, resulting in the disparity between rich and poor, not in line with the socialist line of thinking, these entrepreneurs earn so much money, donate it quickly, to protect their own lives, in order to continue to make money.”
Yan Jianfa believes that the problem of poverty should be solved by the government, the people pay taxes, and the government then allocates the tax money for social welfare. Donations from rich Chinese businessmen are not the same as donations from entrepreneurs in pluralistic democracies, like Taiwan’s TSMC, Hon Hai, and Tzu Chi buy vaccines to donate to the government, which is out of volition and not forced by the government, which is true charity.
Recent Comments