Alibaba pledges $15.5 billion in support of China's ‘Common Prosperity' push

Alibaba Group announced, on Friday, that it will spend $15.5 billion to help President Xi Jinping's push to spread China's prosperity more fairly, adding to previous pledges by internet giants under pressure to fund the ruling Communist Party's political initiatives.

Alibaba announced ten programmes for job creation, “care for vulnerable groups,” and technological innovation. Its offer of 100 billion yuan ($15.5 billion) includes $20 billion yuan ($12.5 billion) for a fund to “cut income inequality” in Zhejiang, the company's home province south of Shanghai.

Alibaba common prosperity

In response to pressure to comply with Beijing's political and economic ambitions, Alibaba and other Chinese digital titans, including games and social networking service Tencent Holdings Ltd, have announced intentions to invest in social welfare, technology development, and other governing party priorities.

Xi's “common prosperity” programme advocates for more broadly disseminating the advantages of China's economic growth and closing one of the world's greatest disparities between an elite with more billionaires than the United States and the poor majority of the 1.4 billion population.

“We firmly believe that if society is doing well and the economy is doing well, then Alibaba will do well,” said CEO Daniel Zhang in a statement.

Alibaba donation

Since late 2020, Beijing has initiated anti-monopoly, data security, and other crackdowns on internet businesses in a move to tighten control over enterprises that the governing party fears are becoming too large and autonomous. As China's economy developed during the last three decades, the ruling party permitted an increasing divide between rich and poor. Xi, who came to power in 2012, has called for the party's "original mission" to be renewed, which includes reducing poverty, improving incomes, and directing investment toward key technology and other activities.

Last month, Tencent pledged 50 billion yuan ($7.7 billion) for “common prosperity” efforts in health care, education, and rural development. This more than doubled the company's investment in corporate social responsibility. Pinduoduo Inc., another e-commerce startup, agreed last month to invest $1.5 billion in agriculture and other rural development initiatives. Alibaba recorded a profit of 45.1 billion yuan ($7 billion) in the June quarter.

Alibaba's founder and chairman Jack Ma, who stepped down in 2019, has long been one of China's most notable charitable givers. During the Coronavirus outbreak, his charity delivered medical supplies to Africa and donated to education, health, and environmental organisations.

(With inputs from AP, Image: AP)