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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

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Wang Xing, chairman and CEO of Meituan Dianping, gestures as he speaks during a panel discussion at the Bloomberg New Economy Forum in Beijing on November 22, 2019. Wang said this week that Xi’s goal of “common prosperity” is in Meituan’s genes because the company name means “better together”. Photo: Bloomberg
Xinmei Shen

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.

Wang Xing, the founder of food delivery giant Meituan who has a net worth of US$20 billion, said during the company’s second-quarter earnings call on Monday that common prosperity is “built into the genes of Meituan”. The evidence, Wang explained, is in the company’s name, which means “better together” in Chinese.

Chen Lei, the chairman and CEO of e-commerce giant Pinduoduo, said during his company’s second-quarter earnings call that the firm launched a 10 billion yuan (US$1.5 billion) agriculture initiative to help rural residents whose average income was a third that of urbanites.
That news came after Tencent Holdings earmarked another US$7.7 billion fund also dedicated to common prosperity. The fund will be used to help lift up low-income groups, improve health care coverage, contribute to rural economic development and support grass roots education, the company said in a statement published at midnight, after its second-quarter earnings call. The announcement was also just one day after Xi made common prosperity a key economic and social goal.

“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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