When China Talks, Its Billionaires Listen
It is not new news that the Chinese government has been pressuring large technology companies to avoid tactics that might be considered monopolization, especially in light of Alibaba’s (BABA) $2.8b fine, but while the Chinese government press highlights the ‘equalization of prosperity’ that such fines are said to cause, there is another game being played that gets little government coverage. Chinese billionaires, particularly founders of some of China’s largest technology companies, have been setting up and contributing to charitable foundations that will ‘redistribute’ some of their wealth to the Chinese population.
The most recent was the donation of ~62.4m shares of JD.com (JD) class B shares to a charitable trust made by the founder and CEO Richard Liu Qiangdong during this week’s Chinese New Year holiday, with those shares having a value of ~$2.2b, a chunk of his estimated $16.3b fortune. He is certainly not alone as Lei Jun, the founder of China’s Xiaomi (1810.HK) donated $2.2b last year, Pinduoduo’s (PDD) founder Colin Huang donated $1.9b in company stock, and Meituan’s (3690.HK) founder Wang Xing, $2.3b in stock, just a few days after the abovementioned Alibaba fine was recorded, with a number of interim donations from Alibaba, Tencent (700.HK), and others being made on an ad hoc basis for flood release or similar issues.
While giving is certainly a good thing, and giving in the amounts reflected above is even better, much of the giving seems to be a result of the pressure from the Chinese government and to charitable projects that are favorites of China’s all-encompassing Chairman, Xi Jinping. One might draw the conclusion that these donations are to garner favor with the Chairman and reduce the focus on the unequal distribution of wealth that the digitalization of China might bring, or maybe they are just trying to emulate the Bill Gates philosophy of “…you can’t take it with you..” (or you can’t take it all with you), but it seems that the donations continue with the Qiangdong donation filing this week, so it would seem that the pressure I still on, and the donation phones keep ringing. What’s a few billion among friends anyway?
The most recent was the donation of ~62.4m shares of JD.com (JD) class B shares to a charitable trust made by the founder and CEO Richard Liu Qiangdong during this week’s Chinese New Year holiday, with those shares having a value of ~$2.2b, a chunk of his estimated $16.3b fortune. He is certainly not alone as Lei Jun, the founder of China’s Xiaomi (1810.HK) donated $2.2b last year, Pinduoduo’s (PDD) founder Colin Huang donated $1.9b in company stock, and Meituan’s (3690.HK) founder Wang Xing, $2.3b in stock, just a few days after the abovementioned Alibaba fine was recorded, with a number of interim donations from Alibaba, Tencent (700.HK), and others being made on an ad hoc basis for flood release or similar issues.
While giving is certainly a good thing, and giving in the amounts reflected above is even better, much of the giving seems to be a result of the pressure from the Chinese government and to charitable projects that are favorites of China’s all-encompassing Chairman, Xi Jinping. One might draw the conclusion that these donations are to garner favor with the Chairman and reduce the focus on the unequal distribution of wealth that the digitalization of China might bring, or maybe they are just trying to emulate the Bill Gates philosophy of “…you can’t take it with you..” (or you can’t take it all with you), but it seems that the donations continue with the Qiangdong donation filing this week, so it would seem that the pressure I still on, and the donation phones keep ringing. What’s a few billion among friends anyway?
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