Chinese Internet giant Tencent's Pony Ma pledges US$2 billion to charity

Tencent chairman and chief executive Pony Ma will donate US$2 billion in shares to charity which will vest over several years.
Tencent chairman and chief executive Pony Ma will donate US$2 billion in shares to charity which will vest over several years.PHOTO: REUTERS

BEIJING (AFP) - The founder of China's Internet giant Tencent will donate US$2 billion (S$2.69 billion) in shares to charity, the company said - one of the largest gifts ever given in a country whose new super-rich have no tradition of philanthropy.

Pony Ma, Tencent's chief executive, will give the shares to a new foundation for mainland projects in health, education and environmental conservation, among other issues, his company said.

The donation - which will vest over several years - appears to be the largest ever by a single individual in China, where there is great public mistrust of charitable organisations battered by years of scandal.

"After 10 years of exploration and participation in philanthropic activities, I increasingly feel that a longer-term and more organised way is needed to give back to society," Ma said.

Pony Ma is the 34th richest man in the world with a net worth of US$20.2 billion, according to Bloomberg's ranking of billionaires.

Greater China surpassed the US last year as home to the world's largest population of billionaires, according to luxury publisher Hurun, but top mainland businessmen fall far behind their Western counterparts in corporate social responsibility.

In 2014, Jack Ma and Joe Tsai, co-founders of rival Internet behemoth Alibaba, pledged to establish a philanthropic trust funded with shares in the company estimated to be worth $3 billion at the time.

But the country's most generous donor last year was He Xiangjian, founder of appliance maker Midea, who gave 400 million yuan (S$83.13 million), according to data compiled by Harvard University's Kennedy School of Government.

China is the world's second-largest economy but ranks 144th out of 145 countries for giving, according to a study last year by the Charities Aid Foundation.

Chinese citizens donated just US$16 billion in 2014, according to the most recent data from the China Charity Information Centre - less than 0.2 per cent of annual GDP.

In the US in 2014, giving accounted for 2.1 per cent of GDP, according to the National Philanthropic Trust.

The contrast is a consequence of China's rapid wealth accumulation in recent years, with no time for a charitable culture to develop, explained Anke Schrader of business research group The Conference Board.

"In the US, you have multiple generations of entrepreneurs, whereas in China you really only have the first generation just now maturing and wondering as they get older about how they're going to redistribute their wealth," she told AFP Thursday.

China's highly centralised public welfare system and its authorities' close control over the non-profit sector also give many the impression that the government should be in charge of social issues.

"A lot of citizens perceive NGOs as an extension of the state - not really as a separate, independent third sector - and it really doesn't encourage giving," Schrader added.

Two of the world's richest men, Bill Gates and Warren Buffett, are noted philanthropists themselves.

They hosted a banquet for China's super rich in 2010 to encourage giving, sparking debate when reports said wealthy invitees were reluctant to attend for fear they would be pressured for money.

The country passed its first charity law in March, which sought to increase public confidence in giving while tightening its control of the sector. It will take effect on Sept 1.

But analysts say the legal framework for charitable trusts is still inadequate, with both donors and recipients potentially liable for tax.