China’s Big Tech answers Xi’s call for ‘common prosperity’ as Tencent, Meituan and Pinduoduo launch new initiatives
- China’s biggest tech giants are answering Beijing’s call to help reduce the wealth gap by adding new initiatives to other recent philanthropic efforts
- Entrepreneurs have shunned the spotlight and given away more money this year as Beijing widened a crackdown on the tech sector
China’s tech giants are rushing to answer President Xi Jinping’s call to contribute to the country’s “common prosperity” amid a crackdown on the sector that has left companies reeling and entrepreneurs keeping a low profile.
In August, Xi called on companies to help pursue the goal by “adjusting” high incomes and encouraging wealthy individuals and companies to “give back to society”. China’s tech entrepreneurs, whose net worths have ballooned in the past decade, were quick to respond.
“They’re doing this because the Chinese government is encouraging, but actually could be demanding, that large companies or wealthy entrepreneurs should proactively provide charity to the rest of the Chinese society,” said Edward Tse, founder and CEO of Gao Feng Advisory. “Whether they’re willing or unwilling, they would have to somewhat come along.”
Outside of Big Tech companies, Hong Kong-listed Chinese carmaker Geely pledged to establish its own project in the pursuit of common prosperity and increasing employee incomes. The company said this week that it will dole out a total of 1.67 million company shares to a select 10,884 workers.
The rush to contribute to Xi’s common prosperity goal comes amid Beijing’s months-long campaign to rein in the power and influence of Big Tech companies, which has seen a tightening of regulatory oversight on the digital economy.
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Meanwhile, China’s tech tycoons have been trying to stay out of the spotlight.
The new commitments add to already heightened philanthropic efforts this year to placate Beijing.
In March, Huang said that his Starry Night Foundation would donate US$100 million to his alma mater Zhejiang University to support fundamental research in biomedical science, agriculture and food. Tencent chairman Pony Ma also said in April that the company would earmark 50 billion yuan for a “sustainable social values” initiative geared towards alleviating social problems and reducing poverty.
But since the Chinese government is so far only encouraging companies and entrepreneurs to increase philanthropy, the actual impact could significantly vary depending on the companies and individuals, according to Gao Feng Advisory’s Tse.
“To what extent this would be systematically sustainable is still a big question,” Tse said.