(Bloomberg) — Alibaba Group Holding Ltd. pledged 100 billion yuan ($15.5 billion) over five years toward Xi Jinping’s “common prosperity” vision, becoming the latest tech giant to bankroll China’s broad aim to share the wealth.
The government-backed Zhejiang Daily reported that China’s second-largest company will spread the money between 10 initiatives encompassing technology investment and support for small companies. An Alibaba spokesperson confirmed the report without elaborating. The company’s shares were little changed in New York trading.
Alibaba joins a growing number of its most prominent peers in promising to give back after accumulating vast wealth during a decade-long mobile internet boom. Pinduoduo Inc., the fast-rising online commerce giant now challenging Alibaba in the countryside, pledged its subsequent $1.5 billion in profit to farmers’ welfare. Tencent Holdings Ltd., China’s most valuable company, said last month it will double the amount of money it’s allocating for social responsibility programs to about $15 billion.
They’re joined by a growing number of tech billionaires, from PDD’s Colin Huang to ByteDance Ltd.’s Zhang Yiming and Xiaomi Corp.’s Lei Jun, donating vast sums to many causes. The largesse coincides with a period of intensified scrutiny over the growing power and influence of China’s most prominent corporations, from Tencent to Alibaba, which received a $2.8 billion fine for allegedly abusing its market dominance.
Read more: Chinese Firms Rush to Embrace Xi’s ‘Common Prosperity’ Slogan
What Bloomberg Intelligence Says
Alibaba’s plan to commit 100 billion yuan ($15.5 billion) to help finance mainland China’s push for “common prosperity” points to greater social accountability, is easily affordable, and could help resolve regulatory concerns; it may look dramatic, but our underlying view on sales and earnings is unaffected. To be deployed through 2025, the amount is just 31% of Alibaba’s current cash balance and compares with its trailing 12-month free cash flow of $24 billion. The agreement also puts Alibaba more on parity with Tencent, which had stepped up earlier.