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Why do billions of Chinese suddenly feel so generous? | Business and Economic Affairs

Shenzhen, China – China’s billions are becoming more and more generous. In recent months, X Xing, chairman and founder of Meituan Food Supply, has donated nearly $ 2.7bn in stock to his charity to promote scientific research and education, as well as several other major gifts.

Colin Huang, founder of e-commerce giant Pinduoduo, after resigning as chairman of the company in March, donated nearly $ 1.85bn to the tuition fund. And earlier this year He Xiangjian of Midea home appliances and Xu Jiayin of Evergrande real estate empire paid around $ 975m and $ 370m respectively to alleviate poverty, medical aid and social programs.

The list of largesse continues, with some, billions such as Zhang Yiming, the founder of TikTok ancestor ByteDance, donating nearly $ 77m of education to his hometown of Longyan in Fujian province, and former Olympic champion Guo Jingjing donating $ 10m to Wuhan.

But behind the special gifts is approaching the Chinese government’s hand.

With more than 1,058 billion according to the 2021 Hurun Global Rich List data released earlier this year, China now has the largest economy in the world – including the capitalist United States. This economic growth has caused Beijing to worry that the gap between rich and poor could be a problem for Communist Party rule, either visually or in reality or both.

Wang Xing, chairman and founder of the Meituan food giant, donated nearly $ 2.7bn in stock to his charity to promote scientific and educational research this year. [File: Takaaki Iwabu/Bloomberg]

Love starts at home

For the China Communist Party (CCP) and the regime that hampers politics, economic instability is seen as a threat to their control, experts say.

“I think money laundering is very important for the elite but there will always be things that are better than this because in the end money laundering is not a problem, really; the problem is that the lack of funding brings it, ”says Tom Cliff, a senior lecturer at Australia National University who studied business professionals in China.

“I don’t think the dignitaries care about the people,” Cliff told Al Jazeera. “I think they care about the huge financial differences that would make them happy.”

Chinese businessmen, especially high-ranking officials, have been notified since Alibaba’s ally and former boss Jack Ma misrepresented the country’s leadership late last year and the government issued corrective measures and directives aimed at increasing their power.

Many of the tasks the entrepreneurs are accustomed to – gaining a lot of money, working as capitalists elsewhere, demonstrating their status, establishing sponsorships and educational institutions in their name – seem unlikely to match President Xi Jinping in China in the coming years.

Olympic and world champion Guo Jingjing has donated $ 10m to Wuhan this year [File: Tim Chong/Reuters]

Continuing messages from state media since Xi’s visit to the museum at the end of 2020 were set up by “Qing” royal businessmen and philanthropist Zhang Jian told billions of Chinese that they should be on the line.

China’s richest people have added $ 1.5 trillion to their wealth by 2020 with the spread of the COVID-19 epidemic. Although they lost $ 16bn to their assets in the first year of 2021, according to the Bloomberg Billionaires Index, following a legal breakdown, they were forced to reclaim their charitable spirit.

The growing incentive for Chinese traders to release their handcuffs and return them to the country was enshrined in a recent five-year government plan approved in March.

By promoting “social development”, it promotes charity as a tool for the distribution of wealth and “third division” in a plan that seeks to reform China’s education and “improve agricultural skills” in science, technology, agriculture and medicine.

This third distribution right now.

Pushing and pulling

The first, evening delivery first started in China more than 10 years ago, according to Min Zhou, director of the Asia Pacific Center at the University of California Los Angeles (UCLA), which pursues Chinese charities around the world.

This came to a head in September 2010, when US billionaires Warren Buffett and Bill Gates came to China to encourage their richest people to do charity. But their efforts did not materialize, for some were afraid to take part in the ceremony because they felt that they would not need to make a solemn promise to do so.

This was also the case at a time when civil society and non-governmental organizations were developing, the spread of which became increasingly difficult when Xi rose to prominence in China in 2012 and pushed for a ban on jobs outside the CCP and government oversight.

“There was a lack of small-scale efforts, but the government continued to push for more mobilization,” Zhou told Al Jazeera.

“There has been a call from the government for refunds but this is a very successful one, very different from what is happening in China where they live abroad,” he said. “The government is trying to control the economy. He cannot force them, so they force him to do so. ”

Cliff has seen this push back in the last 10 years as he studies local donations with local financial institutions in the corporate community in Shandong province – providing a clear indication of the most recent efforts.

“I think the government’s pressure on businesses to pay money has been very clear,” he said. “Once you get to the point where you can see things in advance. You can see the difficulty. ”

In September 2010, Warren Buffett and Bill Gates came to China to encourage their wealthiest people to do charity. [File: Nelson Ching/Bloomberg]

Recognizing the wind is blowing educators and local business owners about the amount of money they earn to survive and thrive, he said.

“[Business leaders in China] Think about the different types of companies – financial, political, and social – and think this way, “he said.” They want equality between the types of capital. Having only one will not get you what you want or what you want. “

“I think it’s the same for the elite,” Cliff said.

Contributing to the unique history of China, according to Emily Baum, associate professor of Chinese history at the University of California Irvine, but it has been a source of tension between the people and the state, whether it is the imperial China or the People’s Republic.

If this donation made it possible for you to have more power than you did or to undermine the government’s ability to provide services or government services, it is often difficult.

“It remains to be seen what the future of charity will look like when we have these two disabled groups,” Baum said of the government against world-renowned businessmen.

“I think entrepreneurs like Jack Ma who want to follow the Western charity’s principles, and build its foundations and incorporate its name into the well-being of the people in terms of education,” he said. [is in conflict with] The CCP does not feel comfortable with this because the training is in charge, “Baum told Al Jazeera.

There are risks in which Xi and CCP are ready to push, experts say. Anxiety curiosity can hinder business and skills for current business owners, leaving them looking for more options than their next business.

“Private business owners, especially in the last three years, feel that these things are approaching, if the government can seize their property,” Cliff said. “These people, who are in their area, not celebrities, I think some of them are angry with what the government has done and urge the government to show respect for development.”

Another problem is the message that this new division sends to the next generation of experts and business professionals: that more wealth can no longer be allowed and that people should not control it in the future, says Baum.

“I believe it sends a young generation to be more careful about the kind of things they do and make money like this or just be a public entrepreneur.”

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