China, the greatest economic success story of the 21st century so far, is calling on its growing middle class to share more of its good fortune with the needy. The government has made an appeal for charity amid rising criticism that the spirit of philanthropy is developing a lot less quickly than the urge to accumulate wealth, as the country becomes richer but more divided.
Twenty-five years of spectacular economic growth are estimated to have created more than 10 000 people with assets in excess of $10-million. But while the new rich are spending, investing and gambling more than ever, their willingness to give something back to a society that still contains tens of millions of people living on less than $1 a day is being called into question.
Last week, the Vice-Minister of Civil Affairs, Li Liguo, said the government needs more help from the private sector to deal with natural disasters. Last year was one of the worst in memory for typhoons, floods and droughts, which claimed 2 500 lives, left 15-million people homeless and created food shortages for more than 70-million, mostly in the poor western and northern regions.
”We ask for greater support from charity-based organisations and from society,” the minister said. ”The Chinese government will make new policies, such as the introduction of tax breaks, and try to create a more encouraging social climate for corporate donations.”
Changing times
The appeal would have been unthinkable a generation ago, when the Communist authorities boasted that they would provide for every social need, and displays of wealth would have been condemned as bourgeois and counter-revolutionary. But the private sector now accounts for more than half of China’s economy. Although tax revenues have grown, public spending has not prevented a widening gap between rich and poor, particularly with regard to health and education.
Private charitable organisations, once viewed with suspicion by the authorities, are gaining acceptance, but only 100 national-level groups have been recognised in the past 10 years. According to the China Charity Federation, they received 5-billion yuan last year, accounting for just 0,5% of China’s gross domestic product. In a report calling for companies to be more generous, the state-controlled China Daily noted that just 1% of the country’s 10-million companies had made a donation to charity last year.
International funds, once an important source of support for the poor, are drying up. Citing China’s economic success, the United Nations World Food Programme closed its last humanitarian project in the country two years ago. Japan, the biggest provider of aid over the past 30 years, has said it will do the same soon. And the British Department for International Development is among many other big donors now scaling back their activities.
To counter these trends, the government has established thousands of charity centres to accept donations of cash and clothing from the public. Last June, it introduced the country’s first tax relief on donations, though initially only to a small number of foundations.
Private donors
Some private donors do their own good works. Chief among them is Huang Rulun, the founder of the Jinyuan property and investment group, who topped the 2005 Hurun Report’s philanthropy list with donations of £20-million to build schools and relieve poverty.
Rupert Hoogewerf, the British compiler of the list, said he is optimistic that there will be more people like Huang.
”Philanthropy is still an immature industry in China. But people are giving money,” he said. ”It is expected now and it wasn’t before.” He noted that many of China’s new super-rich are self-made men who experienced poverty during their childhoods. ”They can empathise with the have-nots more than people in England.”
Others cite cultural and historical reasons for China’s slowness to embrace conspicuous giving. ”Rich people have only started to be rich in recent years and they still feel insecure,” Professor Shang Yusheng of Tsinghua University said. ”There is less of a tradition of charity here. Wealthy people don’t think about it much and the government hasn’t provided many incentives.”
With China developing so quickly, some of the newest millionaires say they have been too busy to consider their charitable responsibilities. Robin Li, the founder of the country’s biggest internet search engine, Baidu, has a fortune estimated at £350-million, most of it accrued in the past year. He admits his company has not given much back yet, but says this is simply because it has grown so fast. ”We haven’t done much because we only just went public,” he said. ”But going forward we would like to get more involved in charity work.”
International aid
The same may be true at an international level, where China is in transition from aid recipient to donor. The government just made its first small contribution to the World Food Programme and it has provided support — usually tied to business — to several African and Asian countries. Beijing was also the ninth-biggest contributor to the UN budget, paying £23-million, a modest figure in terms of its share of the global economy, but more substantial given that the average Chinese income is less than £600 a year.
The biggest cause of optimism, however, has been the public’s response to natural disasters overseas. Last year, the Chinese Red Cross received a record £30-million for the Boxing Day tsunami, and smaller sums for Hurricane Katrina and the earthquake in Pakistan. ”The tsunami was a milestone for charity in China,” Shang said.
Morality, like everything else in today’s China, is in flux. According to traditional Confucian ethics, successful individuals should give to charity. Communist ideology left such responsibilities to the state. With neither these nor any other ideals now dominant, the country is a going through an industrial revolution with all the pain of Victorian capitalism and — so far — not much of the charitable benevolence. — Guardian Unlimited Â