While COVID-19 pushed as many as 150 million people into extreme poverty, China’s President pushed most of its ultra-rich into philanthropy. However, the pandemic is not the reason behind their generosity…
Jack Ma, CEO of Alibaba and Ant Group, was the richest man in China till March 2021. His high-tech business empire was valued at well over $1 trillion. The most famous living Chinese person was an entrepreneur, an innovator, and a charismatic spokesman for success in the country. Then he disappeared, not to be seen in public for nine months.
On October 24, 2020, Ma gave a speech blasting China’s regulatory system. Days later, the regulators killed Ant Group’s $37 billion IPO, summoned Ma to Beijing for “regulatory interviews,” and launched an official anti-trust probe into Alibaba.
TECH GIANTS TURN PHILANTHROPISTS
In recent years, the richest men in China are becoming more and more generous.
Wang Xing, founder and CEO of food delivery giant Meituan, donated around $2.7 billion in stocks to the Wang Xing Foundation, his philanthropic foundation promoting scientific research and education. One of China’s richest self-made entrepreneurs, ranking 16 on Forbes’ China’s Rich List 2020, Xing is worth $20 billion.
Colin Huang, founder of e-commerce giant Pinduoduo, was the country’s most generous when it came to giving away his wealth, topping the Hurun China Philanthropy List 2021. The billionaire gave away $1.85 billion in donations last year.
Recently, Zhang Yiming, founder of TikTok’s parent company ByteDance, donated $77.35 million to set up the “Meifang Foundation” to assist teachers with advanced education and support vocational education in the south-eastern Chinese city of Longyan.
WHAT DOES IT SIGNIFY?
Meituan is under investigation for an anti-trust practice known as “er Xuan Yi,” an exclusive arrangement that prevents merchants from doing businesses on other platforms. Pinduoduo is facing investigation over allegations that it overworks its employees. ByteDance regularly meets with Beijing regulators about various issues, including data security; it recently put IPO plans on hold after a warning from Chinese regulators.
In recent years, the richest men in China have been beset by disappearances, kidnappings, prosecutions, and imprisonments. Just so you know, the founders of Meituan, Pinduoduo, and ByteDance, have unexpectedly stepped down.
Co-incidence? Certainly not. It is a fact: China’s ultra-rich, who accumulate vast wealth, function like capitalists, expressing their individuality or criticize the government, eventually come under Beijing’s scrutiny.
With over 1,000 billionaires, China has more ultra-rich than any other country on Earth. Their rising wealth and the gap between rich and poor is a concern for Xi Jinping and the Chinese Communist Party (CCP).
THE GREAT GAME OF POWER
“I think income disparity is a big concern for the elites, but there will always be things that override that because ultimately, income disparity itself is not the problem, really; the problem is what the income disparity produces. I don’t think the elites actually care about people. I think that they care about what massive income disparity could produce for the entire structure that keeps them as elites,” Tom Cliff, a senior lecturer at Australian National University who has studied business elites in China, told Al Jazeera.
China’s entrepreneurs, particularly its tech titans, have been on the most aggressive streak of charitable giving in their lives after Xi Jinping unleashed a torrent of regulatory actions and directives aimed at containing their growing might.
In 2020, at the height of the COVID-19 pandemic, China’s ultra-rich added an unprecedented $1.5 trillion to their wealth. In the wake of the regulatory crackdown, Xi Jinping is pressurizing the billionaires to loosen their purse strings and fall into line.
The government’s five-year plan approved in March 2021 advocates the creation of public welfare. It promotes charity as a tool of wealth distribution to revamp China’s education system and to accelerate the cultivation of talents in science, technology, agriculture, and medicine.
“There has been a push from the government for entrepreneurs to give back, but this push is more top-down, so very different from what’s going on in the Chinese diaspora. The government is trying to redirect the wealth of the entrepreneurs. They cannot force them, so they put pressure on them to do so,” says Min Zhou, director of the Asia Pacific Center at the University of California Los Angeles, who follows Chinese global philanthropy activities.
Beijing’s pressure has shifted towards rectification of the technology sector. However, a climate of fear often stifles entrepreneurial efforts and innovation. It also sends a message to the next generation of entrepreneurs and innovators: to be much more cautious – of rapid accumulation of wealth, of their influence over public opinion, and of Xi Jinping’s absolute grip on power.
“I think entrepreneurs like Jack Ma who have wanted to follow the more Western philanthropic model, making his own foundation and attaching his name to philanthropic causes pertaining to education, is in conflict with the CCP feeling profoundly uncomfortable with that because education is something that they are overseeing,”Says Emily Baum, an associate professor of Chinese history at the University of California Irvin.