Duan Yongping, co-founder of Oppo and Vivo, has emerged as one of China’s most prominent billionaires this year following a generous donation of 1 billion yuan (US$140 million) to his alma mater on New Year’s Eve. This act follows a similar move by Xiaomi founder Lei Jun, who made headlines by donating 1.3 billion yuan to Wuhan University just a month earlier, marking the largest individual donation ever made to a Chinese university.
These philanthropic gestures coincide with recent revisions to China’s charity law, aimed at promoting philanthropic activities amidst concerns that such efforts have lagged behind private wealth accumulation. The amendments, passed on December 29, will take effect in September 2024.
Despite Beijing’s efforts to leverage charity for social equality, industry observers suggest that the revised law may not spur increased philanthropic acts due to a lack of incentives and existing restrictions. A new clause emphasizing the leadership of the ruling Communist Party in charitable work underscores the focus on regulating emerging issues such as emergency relief and online appeals.
While the revised law includes a provision for tax cuts for all donors, anticipated incentives for individual contributions are notably absent. Zhang Gaorong, an associate professor specializing in philanthropy at the East China University of Political Science and Law, highlights the need for similar incentives for individual donors to encourage more significant contributions.
The philanthropic landscape in China has seen notable developments, with 34 individuals making donations exceeding 100 million yuan in the 12 months leading up to August, according to the Hurun Philanthropy List. Although a decrease from the previous year, this marks a substantial increase from two decades ago when only two individuals donated over 100 million yuan.
The draft amendment initially included a statement emphasizing the role of charity in promoting common prosperity, aligned with President Xi Jinping’s drive to narrow the wealth gap. However, this statement was omitted from the final version and has received less attention in official propaganda since China’s annual parliamentary meetings in March.
The amendments to the charity law primarily focus on regulating personal appeals and online platforms, addressing the thriving landscape of internet-based fundraising. Notably, the revised law emphasizes the accuracy of information provided by individuals seeking help due to illness or financial trouble, requiring online platforms to verify information and collaborate with relevant authorities to enforce policies.
A new section on emergency charitable efforts encourages collaboration between organizations, volunteers, and local governments to enhance fund allocation and transparency during natural disasters and public health emergencies.
Despite these efforts, Jia Xijin, deputy director of Tsinghua University’s Institute for Philanthropy, expresses skepticism about robust growth in the philanthropic sector. Tighter control over the economy and increased scrutiny over civil society by Beijing may hinder the sector’s expansion.
The philanthropic sector in China witnessed significant growth over the past decades, especially following the 2008 Sichuan earthquake. While the number of charitable foundations increased from 1,300 in 2007 to over 9,300 by the end of 2022, the industry’s growth has been sluggish since the implementation of the charity law in 2016.
He Yiting, chairperson of the Social Development Affairs Committee of China’s top legislature, the National People’s Congress, acknowledges the challenges, stating that the scale of charitable giving in Chinese society remains too small to match social wealth accumulation. A recent report by the National School of Development at Peking University highlights that there is still a considerable gap between China and other parts of the world where charity is more mature.
In comparison, the participation rate for donations in the United Kingdom stands at 71 percent, and 26 percent for time volunteered, according to the 2023 World Giving Index by the Charities Aid Foundation. In the United States, the figures are 61 percent and 38 percent, respectively. The report suggests that fostering a more open society, increased social participation, and the development of the private sector are essential for the growth of the philanthropic sector in China.