China tech billionaires ramp up donations as Beijing cracks down

China has been tightening regulations on tech companies, in parallel with concerned about inequality, with President Xi Jinping recently saying "common prosperity” should be the ultimate goal. – Xinhua via AP

China’s tech tycoons are discovering their charitable side as they come under mounting regulatory scrutiny from Beijing.

In the latest example, Xiaomi Corp. co-founder Lei Jun handed over US$2.2bill (RM9.28bil) of shares in the smartphone maker to two foundations, according to filings to the Hong Kong Stock Exchange. That came after Meituan’s Wang Xing and ByteDance Ltd.’s Zhang Yiming gave away parts of their fortune to charitable causes last month.

The moves come as a crackdown on technology companies has intensified since November, when Jack Ma’s Ant Group Co. was forced to pull its giant initial public offering.

It’s a new era for the country’s billionaires as China tightens regulations in areas from financial services and internet platforms to data security and overseas listings.

At the same time, the Chinese public is becoming increasingly concerned about inequality. In a speech in October, President Xi Jinping said the country’s development was "unbalanced” and "common prosperity” should be the ultimate goal.

"It’s likely much more than coincidence that China’s tech billionaires have begun to evince a strong charitable urge,” said Brock Silvers, chief investment officer at Hong Kong-based private equity firm Kaiyuan Capital. "It could stem from deep patriotic feelings or Buddhist inclinations, but it appears to be strongly correlated to Beijing’s recent regulatory crackdowns.”

In June, Meituan founder Wang donated a US$2.3bil (RM9.7bil) stake in the food delivery giant to his own philanthropic foundation. That came after China’s antitrust watchdog announced an investigation into the company, and the billionaire posted a classical poem online that some saw as a veiled criticism of Beijing.

That same month, ByteDance founder Zhang, China’s fourth-richest person with a net worth of US$44.5bil (RM187.64bil), gave about US$77mil (RM324.68mil) of his own wealth to an education fund in his hometown. And in April, Tencent Holdings Ltd.’s Pony Ma, the second-richest with US$56.7bil (RM239.08bil), pledged to set aside US$7.7bil (RM32.47bil) of the company’s money toward curing societal ills and lifting China’s countryside out of poverty. – Bloomberg