Alibaba Commits $15.5 Billion To Assisting China In Attaining Common Prosperity
Alibaba commits $15.5 billion to assisting China in attaining 'common prosperity'
Alibaba is investing 100 billion yuan ($15.5 billion) in China's drive for "common prosperity," the latest major commitment by a Chinese company to President Xi Jinping's campaign.
The technology behemoth announced Friday that it would invest the staggering sum by 2025 with a focus on five priorities: technology innovation, economic development, the creation of "high-quality jobs," assisting vulnerable communities, and establishing a special development fund.
The company detailed ten specific objectives it intends to pursue, ranging from increasing technological investment in the country's less developed regions to improving the welfare of gig economy workers to accelerating the growth of small businesses and agriculture.
Alibaba is establishing a "Prosperity Advancement Working Committee" led by Chairman and CEO Daniel Zhang.
"Alibaba has benefited from China's rapid social and economic development over the last 22 years. We are adamant that if society and the economy are doing well, Alibaba will do well as well "He stated Friday in a statement.
"We are eager to contribute our efforts to achieving shared prosperity through high-quality development."
Alibaba's stock closed slightly lower in New York on Thursday, following initial reporting by state-run newspaper Zhejiang Daily. The company's Hong Kong shares fell 3.5 percent on Friday.
Alibaba's pledge comes less than a week after another major Chinese e-commerce company, Pinduoduo (PDD), pledged to donate its entire quarterly profit to rural development projects throughout the country.
It announced last Tuesday that it would donate $372 million to China's agricultural sector and rural areas, with a goal of donating 10 billion yuan ($1.5 billion) to similar causes in total.
The decision was significant for the publicly traded company in the United States, which had earned its first profit as a public company in the quarter ended June.
Similarly, Tencent (TCEHY) announced last month that it would contribute 50 billion yuan ($7.7 billion) to Beijing's "common prosperity" initiative. The company stated that it would work to increase poor people's income and address educational inequality, among other things.
The ultimate objective
President Xi has repeatedly emphasized the Chinese Communist Party's commitment to "common prosperity," with state media increasingly emphasizing the importance of wealth redistribution.
The phrase is historically significant in China, and Xi's use of the term echoes Chairman Mao Zedong's use of it during the previous century.
During his tenure as a Communist leader, he also advocated for "common prosperity" as a means of mobilizing peasants and wresting power away from rural elites, which included wealthy landlords and farmers.
In recent years, one of Xi's primary policy objectives has been to alleviate poverty throughout the country. His latest edict has increased the pressure on the country's wealthiest citizens and businesses, which are already subject to more stringent regulations as Beijing continues to rein in the private sector's power.
Alibaba was fined a record $2.8 billion earlier this year for behaving monopolistically. Since then, the company has continued to face regulatory scrutiny, despite executives' efforts to portray the situation as resolved.
