The Chinese e-commerce giant will invest 100 billion yuan ($15.5 billion) over the next several years into “common prosperity” initiatives. Alibaba decided to invest money into President Xi Jinping’s goal to spread the wealth.
The company will put the money into 10 initiatives including technology innovation, economic development, high quality education as well as supporting vulnerable groups.
In August, the country’s leader called for “reasonable adjustment of excessive incomes”. President Xin Jinping encouraged high income groups and businesses to “return more to society”.
The company is a beneficiary of the strong social and economic progress in China according to Alibaba’s CEO Daniel Zhang. He also mentioned that Alibaba is willing to support the realization of common prosperity through high-quality development.
Alibaba and Tencent
The world’s second-largest economy introduced a slew of regulations around anti-monopoly and data security and protection. Chinese regulators fined Alibaba $2.8 billion in an anti-monopoly probe. Officials also opened a cybersecurity probe into ride-hailing giant Didi after its U.S. IPO.
Earlier this week, China’s National Press and Publication Administration (NPPA) published new rules regarding video games. People under 18 will be able to play video games one hour a day between 8 p.m. and 9 p.m. on weekends and on legal holidays. NPPA billed the rules as a way to protect children’s physical and mental health. The rules published by the agency will apply to companies providing online game services to minors, limiting their ability to serve those users outside of designated hours. The new rules significantly reduce the amount of time children can play online games. Under the previous rules adopted in 2019, children were able to play games for 1½ hours a day on most days.
Tech giants decided to support the country’s government initiative to reduce income inequality. Alibaba, Tencent, and others are trying to adapt to the new reality, so they can’t afford to reject the government’s initiatives.
Tencent stated that it would double the money it is putting toward social initiatives to 100 billion yuan. The company announced its decision in August. Tencent’s money will go toward areas including rural revitalization as well as helping grow earnings for low-income groups.
The gaming and social media company stated that it is important to promote common prosperity in stages. The company’s actions were a proactive response to the “national strategy” according to Tencent.
China’s famous technology CEOs as well as founders also pledged individual sums of money. Meituan’s Wang Xing, Xiaomi’s Lei Jun, and Pinduoduo’s founder Colin Huang collectively donated billions of dollars to social causes.