Chinese Attitudes on Generosity Are Tested
By MICHAEL WINES
Published: September 23, 2010
BEIJING — Like most everything else in China’s economy, philanthropy here is in a boom period, fueled by phalanxes of newly minted billionaires and foundations, encouraged by an army of professional advisers on charity and, increasingly, sanctioned by the government.
David Goldman/CNBC
Bill Gates, left, and Warren Buffett have invited about 50 of China's superrich to discuss philanthropy, but some may have qualms about attending.
Which makes the case of Warren Buffett and Bill Gates, who will come to Beijing next week to share their thoughts on philanthropy with some of China’s wealthiest people, all the more curious.
Mr. Buffett and Mr. Gates, the Rockefeller and Carnegie of this age, announced plans last month to invite about 50 of China’s superrich to discuss their concept of philanthropy, which includes enlisting the world’s wealthiest people to give away at least half their fortunes.
Things appeared to be going swimmingly until early September, when the Chinese news media quoted a Beijing official of the Bill and Melinda Gates Foundation as saying that “a small number of people” had declined to come, and that others had asked whether they would be pushed for donations.
Last week, Mr. Gates and Mr. Buffett issued a letter stating that they were not coming to China “to pressure people to give,” but to listen. “China’s circumstances are unique, and so its approach to philanthropy will be as well,” they wrote.
Except for denying a report from Xinhua, the state-run news agency, that only two tycoons had accepted the invitation, the organizers of the event have largely fallen silent.
But the Chinese are unlikely to stop talking soon. In a nation where explosive growth has opened a yawning gap between rich and poor, reports that Chinese billionaires might stiff-arm the invitation have spawned a sort of national Rorschach test of Chinese generosity, not to mention attitudes toward the rich.
“Are Chinese rich scared to be charitable?” asked The Global Times, the Communist Party’s English-language newspaper. Not at all; “This is the Americans’ conspiracy,” wrote one of 2,000 people who posted comments on the controversy on Sina.com, a major Internet portal. Academics grumbled about efforts to impose Western philanthropic values on Chinese tradition.
Actually, however, Chinese philanthropic tradition was being upended well before the Gates-Buffett dinner was even conceived. In barely a decade, the Chinese economy has created at least 117 billionaires, according to a Forbes magazine ranking, and hundreds of thousands of millionaires by the estimate of Hurun Report, a magazine based in Shanghai whose target audience is the rich. Only the United States has more billionaires.
While China’s reported philanthropic donations are now comparatively tiny — about $8 billion last year, the government says, compared with $308 billion in the United States in 2008 — changes in China’s economic structure and in government policies make that figure almost destined to rise quickly. And, in contrast to the past, riches are starting to flow to social and charitable causes.
“The Chinese have been very generous for a long period of time,” Rupert Hoogewerf, who publishes Hurun Report, said by telephone. “The difference has been that they do it between families, and don’t publicize it. What we’re seeing now is a new era of transparency.”
Translucency might be a better term. More than a few fortunes have been built on corruption, and their owners stay in the shadows. The China Reform Foundation, an economic research group based in Beijing, estimated last month that about $870 billion in corrupt “gray money” was being hidden by the wealthiest 10 percent of China’s population.
Huang Guangyu, who built an appliance shop into a fortune valued at $2.7 billion to $6.3 billion, was singled out by Hurun Report in 2007 as especially miserly. Today he is in prison, convicted of stock fraud and insider trading.
A Global Times article this month stated that in the last decade, 17 members of an annual list of China’s 50 richest people had been convicted of economic crimes.
Ordinary Chinese, steeped in petty government corruption, are often bitterly cynical toward the rich.
“Of course they’ll decline the invitation,” one wrote of the invited billionaires on the Sina.com postings board. “None of their money is clean!”
Yet a growing number of China’s corporate titans are open both about their wealth and about giving it away. The leading example is Yu Pengnian, an 88-year-old real estate baron who gave the last of his $1.3 billion fortune in April to a foundation he created to fund scholarships for poor Chinese students. The latest is Chen Guangbiao, 42, a Jiangsu Province recycling-company owner who has taken the Gates-Buffett pledge to give away his $440 million fortune when he dies.
“Wealth is not something that comes to you when you are born,” he said in an interview last week. “It’s like water. If you have only a cup, you keep it to yourself. If you have a barrel, you share it with your family. And if you have a river, you share it with everyone.”
This is a new phenomenon, and not only because the money is new. China’s Communist Party claims to represent the downtrodden, and has been reluctant to turn to the private sector to address problems of poverty and disease.
But since the outpouring of support for victims of the Sichuan earthquake in 2008, the government now seems to be edging toward a more accommodating attitude about private philanthropy. It offers corporations a tax break of up to 12 percent for charitable gifts, rising to 30 percent for individuals.
This year, a reregistration drive has certified more than 1,000 nonprofit groups as able to accept tax-deductible donations. Government officials have also said that they plan to enact the nation’s first charity law, with rules that clearly define what a charity is and how it must operate, by late 2011.
But whether revised rules on charities and nonprofit groups generally will broaden or restrict philanthropic work is unclear, said Jia Xijin, who directs the Nongovernmental Organization Research Center at Tsinghua University in Beijing. While the government has slowly given new leeway to some charitable groups, especially those that provide social services, it keeps a tighter rein on groups that advocate policy changes or raise money on their own.
The government’s concern is that “most public fund-raising organizations need some social cause, and if you organize people,” she said, “that means the organization represents some social force.”
For Mr. Chen, the recycling magnate, the best way to encourage philanthropy by the group invited to dine with Mr. Buffett and Mr. Gates is to publicize the names of people who decline to attend.
“I’ll help you bash them in the media,” he said. “We can’t be misers.”
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