Shenzhen, China– Chinese billionaires have recently become very generous. In recent months, Wang Xing, chairman and founder of food delivery giant Meituan, has donated approximately US$2.7 billion in stocks to his personal charity, as well as several other large gifts.
After e-commerce giant Pinduoduo’s founder Huang Kelin resigned as chairman of the company in March, he donated approximately US$1.85 billion to the education fund. Earlier this year, He Xiangjian of Midea’s home appliance empire and Xu Jiayin of Evergrande’s real estate empire allocated approximately US$975 million and US$370 million for poverty alleviation, medical and cultural projects, respectively.
The generous list is endless. Some billionaires, such as Zhang Yiming, the founder of TikTok’s parent company ByteDance, donated approximately US$77 million to education in his hometown of Longyan, Fujian Province. Former Olympic diving master Guo Jingjing donated US$10 million to China. Wuhan.
But behind this wave of private gift giving involves the hands of the Chinese government.
According to the Hurun Global Rich List for 2021 released earlier this year, with more than 1,058 billionaires, China now has more super-rich people than any other country on the planet-including the capitalist bastion of the United States. The surge in wealth has made Beijing increasingly worried that the gap between the rich and the poor may become a problem for Communist rule, whether in concept, in reality, or both.
Charity starts at home
Analysts say that for the Chinese Communist Party (CCP) and the elites who support the political system, rising wealth inequality is seen as a threat to their control of power.
“I think income disparity is a big problem for the elite, but there will always be something beyond that, because the final income disparity itself is not a problem, really; the problem is what the income disparity produces,” Senior Lecturer Tom, Australian National University Cliff said that he studied China’s business elite.
“I think the elites don’t actually care about people,” Cliff told Al Jazeera. “I think they care about what the huge income gap will bring to the entire structure that allows them to maintain their elite status.”
Since Alibaba co-founder and former CEO Jack Ma clashed with the national leadership at the end of last year and the government launched a series of regulatory actions and directives aimed at curbing their growing power, Chinese entrepreneurs, especially its technology giants , Has been receiving attention.
The many activities that these entrepreneurs have become accustomed to – accumulating huge amounts of wealth, operating like capitalists elsewhere, expressing their personalities, and establishing charitable foundations and educational institutions in their name – will become more and more in the coming years under President Xi Jinping’s China. The less likely it is to be tolerated.
Since Xi Jinping visited the museum established by the “virtuous” Qing entrepreneur and philanthropist Zhang Jian at the end of 2020, the official media has continuously sent signals to Chinese billionaires that they should abide by the rules.
In 2020, at the height of the global COVID-19 pandemic, the wealth of China’s super-rich has increased by an unprecedented $1.5 trillion. According to the Bloomberg Billionaires Index, although they suffered a US$16 billion in wealth loss in the first half of 2021, after the regulatory crackdown, they are under increasing pressure to seek charity.
In the latest five-year plan approved by the government in March, Chinese entrepreneurs are more encouraged to relax their wallets and give back to the society.
Advocating “creation of public welfare”, using charity as a tool for wealth distribution, promoted in the “third distribution” plan of China’s education system reform and “accelerating the cultivation of scientific, technological, agricultural and medical talents”.
The third issuance is currently in a stage of rapid development.
Push and pull
Zhou Min, director of the Asia-Pacific Center of the University of California, Los Angeles (UCLA), which focuses on China’s global philanthropy activities, said that modern Western-style philanthropy took root in China for the first time more than a decade ago.
This culminated in September 2010, when American billionaires Warren Buffett and Bill Gates came to China to encourage their swelling super-rich team to engage in charitable activities. But according to reports, their efforts were partially counterproductive at the time, because some people were afraid of participating in these activities because they were worried about the need to make public charity commitments.
This is also the time when civil society and non-governmental organizations began to flourish. As Xi Jinping reached the peak of China’s power in 2012 and pushed for laws to restrict activities beyond the direct supervision of the CCP and the government, this prosperity became more restricted.
“These grassroots efforts have declined, but the government is still very strong in promoting charity,” Zhou told Al Jazeera.
“The government has been pushing entrepreneurs to give back to society, but this push is top-down, so it is completely different from the situation of overseas Chinese,” she said. “The government is trying to redirect the wealth of entrepreneurs. They can’t force them, so they put pressure on them.”
In the past ten years, Cliff has seen a push on the ground when studying local donations from influential private companies in an industrial zone in Shandong Province—a herald of the latest efforts at the highest level.
“I think the state’s approach to promoting donations from private enterprises is very clear,” he said. “When you are at the local level, you can see things in advance. You can see the trajectory.”
He said that perception of the wind has taught private business owners and entrepreneurs at the local level that they must balance their accumulated capital to survive and develop.
“[Business leaders in China] Consider all forms of capital—money, political capital, and social capital—and they will consider this in a very comprehensive way,” he said. “They need to maintain a balance between these different forms of capital. Only one will never let you get what you need or what you want. “
“I think it’s the same at the elite level,” Cliff said.
Emily Baum, associate professor of Chinese history at the University of California, Irvine, said that local-level donations have a long history in China, but for a long time, it has also been a source of tension between individuals and the country, whether it is The Chinese Empire or the current People’s Republic of China.
If this kind of donation has a greater impact outside the local area, or undermines the state’s authority to provide social services or public works, then it often proves to be problematic.
“When these two forces collide, it remains to be seen what the future of philanthropy will look like,” Baum said of national and nationally renowned entrepreneurs.
“I think entrepreneurs like Jack Ma want to follow a more Western philanthropic model, establish their own foundation, and associate their name with education-related philanthropy. [is in conflict with] The CCP is deeply disturbed by this because education is something they are monitoring,” Baum told Al Jazeera.
Analysts say there is some danger in how far Xi Jinping and the CCP are willing to push. The atmosphere of fear may stifle the entrepreneurial efforts and innovation of current business elites, allowing them to find more ways out instead of the next commercial success.
“Private business owners, especially in the last three years, feel that these things are imminent, just like the state can snatch their assets,” Cliff said. “These people are unobtrusive at the local level. I think some of them are dissatisfied with the state’s promotion and the state’s desire to gain honor for their social welfare activities.”
Another danger is that this latest forced redistribution sends a message to the next generation of innovators and entrepreneurs: the rapid accumulation of wealth may no longer be tolerated, and individuals should not try to guide policy in the future, Baum said.
“I’m sure this sends a signal to the younger generation to be more cautious about the types of activities they participate in and their ambitions to earn such funds or become public-facing entrepreneurs.”