Bill Gates and Warren Buffet stirred up a media storm when they, along with several other notable US billionaires, pledged to donate at least half of their fortunes to charity. In September, the duo will come and ask China’s wealthy to do the same, but can the billionaires bank on Chinese benevolence?
Considering the pace at which wealth has amassed in the Chinese mainland, especially in large cities such as Shanghai, China should be fertile ground for philanthropy. The recent onslaughts of natural disasters and the ever-expanding wealth gap present opportunities for China’s mega-rich to give something back; however, charity has long been a murky topic for founders of these fortunes.
To say that the Chinese are cheapskates is to press too far. The only way to establish a charity in the Chinese mainland is to work through notoriously nontransparent government organizations. In addition, policies on tax benefits remain blurry, leading to broad public skepticism about donating funds.
Many prospective philanthropists keep low profiles for fear of attracting too much publicity. There is a feeling of mistrust that resonates in the heart of this developing country for the few that have reaped the rewards of China’s economic boom. Graft watchdogs would also quickly be at the doorsteps of anyone whose riches were acquired through questionable means.
However, peeking at Hurun’s Rich List, an annual report of the wealthiest people in China, gives a good idea about why Gates and Buffet have decided to cross the Pacific. Buffet now claims 10 percent of BYD, a company owned by Wang Chuanfu, currently the richest man on the Chinese mainland with 35 billion yuan ($5.14 billion).
Convincing the 1,000 people on this year’s list to donate will present a dilemma. Unlike Western ideas of charity, which emphasizes that society makes some contribution to one’s personal success, the Chinese believe that their fortunes are earned through personal sweat. Many would rather solidify their own businesses and create more jobs than give money away to causes that are harder to track.
In Shanghai, where obese amounts of expendable wealth light up glitzy places like the Bund and Xintiandi every night, the division in wealth is nowhere more visible. Shanghai can be considered expensive on many levels, but it is still part of a country struggling to pull millions out of poverty. Here, one can have a drink for what would be a gross amount of money by Western standards, and then go across the street for a meal that costs less than a dollar.
Today China is the world’s second largest economy and consumer of luxury goods, based on a report from the World Luxury Association. A day in the life of any of these candidates is worth 10-fold to any of the immeasurable victims’ of recent disasters. Convincing the rich to truly recognize the importance of rebalancing society remains the greatest hope for the forthcoming American do-gooders.
Establishing a harmonious society is very much in the mind of today’s China. Perhaps the return of this Confucian concept will also bring back practice of the first of the Confucius doctrines – benevolence. If Gates and Buffet are to bank on anything, they would do well to address the importance of reestablishing the harmonious benefits rendered by relationships between the haves and the have-nots.