It’s all about “common prosperity,” or at least, that’s what we are being told.
China’s Alibaba Group will invest 100 billion yuan (US$15.5bn) by 2025 in support of the latter, becoming the latest corporate giant to pledge support for the latest initiative driven by the president, Xi Jinping, The Guardian reported.
The Chinese e-commerce giant will put the money into 10 initiatives including technology innovation, economic development, high quality job creation and supporting vulnerable groups.
Last month, Xi called for the “reasonable adjustment of excessive incomes” and encouraged high income groups and businesses in the world’s second-largest economy to “return more to society.”
The government-backed Zhejiang News website said Alibaba’s funds will go towards areas such as subsidies for small and medium-sized enterprises and improving insurance protection for gig economy workers such as couriers and ride-hailing drivers.
It will also set up a 20bn yuan “common prosperity development fund,” the newspaper said, with Alibaba confirming the report.
“Alibaba is a beneficiary of the strong social and economic progress in China over the past 22 years. We firmly believe that if society is doing well and the economy is doing well, then Alibaba will do well,” said Alibaba CEO Daniel Zhang.
“We are eager to do our part to support the realization of common prosperity through high-quality development.”
Last month, Tencent said it would double the money it is putting toward social initiatives to 100 billion yuan. The money will go toward areas including rural revitalization and helping grow earnings for low-income groups.
The company said at the time that its actions were a proactive response to the “national strategy.” The gaming and social media company said it’s clear “we should promote common prosperity in stages,” and allow some people to get rich first then help others get wealthy.
China’s high-profile technology CEOs and founders have also pledged individual sums of money.
Pinduoduo founder Colin Huang, Meituan’s Wang Xing, and Xiaomi’s Lei Jun, have collectively donated billions of dollars to social causes.
Alibaba and its tech rivals have been the target of a wide-ranging and cultural crackdown on issues ranging from monopolistic behaviour to consumer rights.
The e-commerce company was fined a record $2.75bn in April over monopoly violations.
The crackdown has also extended to such things as youth activity involving online computer gaming.
The new policy limits online video game playing for young people to just three hours a week, a mandate that will likely not be too popular with China’s youth, and, could backfire on the government.
Those under age 18 are now limited to one hour in the evening on Fridays, weekends and public holidays.
President Xi also ordered sweeping actions to “clean up” the entertainment industry, with the broadcast regulator moving to ban film stars with “incorrect” politics, cap salaries and rein in celebrity fan culture.
According to Fortune.com, television companies and internet platforms were told to “strictly control the selection of program actors and guests, and uphold political literacy, moral conduct, artistic level and social evaluation as selection standards.”
The regulator added that “those who have incorrect political positions and who are divided in heart and practice from the party and the country must not be used.”
The ruling Communist Party’s Publicity Department also published a call to curb “bad trends in the industry, and clarify the culture and entertainment sector.”
China’s media regulators have frequently warn against “vulgar and obscene” content, but the latest moves indicate the government is ramping up oversight, zoning in on what state media outlets have characterized as “improper” idol worship and excessive wealth.
One of China’s most popular film stars, Zhao Wei, was also blacklisted from China’s internet, with her works removed from streaming sites and her fan club cut off from the Twitter-like platform Weibo service.
And while these and other actions are looming for the Chinese populace — actions deemed unthinkable in western culture — Xi’s “common prosperity” push could very well help drive China’s economy in a post-Covid world.
According to Bloomberg, China’s richest 20% earn more than 10 times the poorest 20%, a wider gap than in the US or European countries such as Germany and France, and one that hasn’t budged since 2015.
Though the number of people living in extreme poverty has dropped dramatically over the past decade, more than 600 million people — about half of China’s population — live on an annual income of 12,000 yuan (US$1,858) or less.
At the other end of the spectrum, rapid economic growth and market-based reforms created tremendous wealth: China has 81 billionaires on Bloomberg’s ranking of the world’s 500 richest people, more than any other country after the US, and there are thousands more billionaires and multimillionaires who don’t crack the top 500.
Sources: The Guardian, Fortune.com, CNBC, Bloomberg, Zhejiang News