University donations remain strong amid economic downturn

Despite an economic slowdown and trade headwinds that have eaten into Chinese company profits in the past year, philanthropic donations by Chinese billionaires have continued and universities are still the largest beneficiaries.

China’s technology drive, including research into artificial intelligence, as well as health research, particularly in the wake of the COVID-19 pandemic, has attracted large private donations, according to recent announcements.

Last November, Lei Jun, the billionaire founder of Xiaomi consumer electronics and smartphone company, announced a donation of CNY1.3 billion (US$181 million) to Wuhan University, from which he graduated in 1991 with a degree in computer science. It is the largest ever individual donation given to a Chinese university.

Technology innovation

Announced on the occasion of the university’s 130th anniversary, the donation was to support “technology innovation and talent cultivation”, according to the university in a post on Chinese social media. It would help cultivate “more outstanding engineers, scientists and technology entrepreneurs”, the university said.

Other areas of basic research will also benefit from his largesse, including mathematics, physics, chemistry, literature, history and philosophy. Lei himself revealed in a recent speech that his studies at Wuhan had been funded at the time by a scholarship sponsored by a company.

At the end of December last year, Duan Yongping, co-founder of Oppo and Vivo smartphone companies, announced a donation of CNY1 billion (US$140 million) to his alma mater Zhejiang University.

The same month, Yang Yuanqing, chairman of Lenovo computer and consumer electronics company, donated the equivalent of US$28 million of his own funds to the University of Science and Technology of China in Hefei, Anhui province, where he had studied for a masters degree.

It was the largest ever donation received by that university which had benefited from smaller donations from Yang in 2017 and 2020, including CNY10 million (US$1.4 million) in 2020 to support the university’s research into COVID-19.

Yang has also donated to Shanghai Jiao Tong University and Tsinghua University, according to Chinese financial news service Yicai Global.

Another billionaire, He Xiangjian, founder of the huge Midea home appliances group, last year pledged CNY3 billion (US$417 million) to set up a fund to support scientific research, including in climate change and artificial intelligence, which will benefit researchers in several universities.

Philanthropy list 2023

According to the latest Hurun China Philanthropy List for 2023 published in November 2023, 34 wealthy Chinese individuals made charitable donations of over CNY100 million last year. However, this was down from 49 individuals in 2022.

The 2023 Hurun list covered a 12-month period up to the end of August 2023, and did not include the big donations from Lei, Duan and Yang.

However, Hurun noted that education remained the top recipient of donations for the year to August 2023, accounting for 58% of donations by individuals on the Hurun list, followed by donations to public welfare at 19% and rural revitalisation at 12%. Hurun noted that contributions to education were down 8% from the previous year, 2022.

The 34 wealthy individuals who exceeded the CNY100 million (US$14 million) threshold promised to give away a total of CNY191 billion. Donations made by companies are attributed to individuals according to their shareholding, according to the Hurun list.

Hong Kong philanthropy

The list does not include Hong Kong philanthropist Li Ka-shing (Hong Kong philanthrophy is recorded separately), who has been a generous donor for decades to universities in Hong Kong, particularly for medical education. Last year he donated around US$7.7 million for the use of AI in medical training and research at the University of Hong Kong and a similar amount to the Chinese University of Hong Kong (CUHK).

The donation was to be used by CUHK as part of a HK$60 million (US$7.6 million) investment “to enhance the use of AI in medical education. The goal is to equip CU medicine’s staff and students as the next generation of clinicians with the readiness to understand, apply and develop AI-powered tools in clinical practice, and get prepared for the ethical challenges associated with the application of medical AI tools”, the university said in a statement last September.

In 2022 the university received a donation from the Li Ka Shing Foundation of around US$20 million to establish a development fund worth around HK$300 million in the faculty of medicine to support research and development in biomedical technologies.

In October, Li also donated HK$10 million to Education University of Hong Kong to support AI literacy at the university’s newly established Artificial Intelligence and Digital Competency Education Centre.

Hong Kong University of Science and Technology received a donation of HK$15 million from Henry Tang, chairman of Shanghai Tang Junyuan Education Foundation, for environmental research and development at the university.

A government scheme in place in Hong Kong to assist higher education includes a donation-matching programme for universities, and has led to a big rise in donations, according to experts.

Hong Kong’s universities have also benefited from philanthropic donations from mainland Chinese donors, particularly to Hong Kong universities’ branch campuses on the mainland, due to their high reputations in research.

‘Common prosperity’ drive

Philanthropy has been a focus of China’s wealthy more recently because of President Xi Jinping’s recent emphasis on “common prosperity”. The government slogan that emerged in 2021 is aimed at narrowing the wealth gap and boosting social equality. It includes the need to “reasonably regulate excessively high incomes, and encourage high-income people and enterprises to return more to society”, for example, through large philanthropic donations.

“All holders of private wealth are now experiencing increased levels of supervision and pressure to ensure that their giving aligns with notions of ‘common prosperity’,” said a report on Chinese philanthropy by Harvard Kennedy School’s Rajawali Foundation Institute for Asia published in August last year. Titled China’s Most Generous, the report pointed out that the definition of common prosperity “remains quite broad”.

But after a Chinese government crackdown on technology companies in 2021, some big business leaders donated very large amounts to charity, in part to stay in the government’s good books. However, only a few donations have been documented and financial media in China say it is difficult to track the causes, or the institutions that benefited.

More recently Cao Dewang has been upheld in China as an example for other billionaires in aligning with the government on charitable giving.

Cao (also known as Cho Tak Wong) is a retired founder chairman of the Fuyao Group, a glass manufacturer which became the world’s largest automotive glass maker with factories in 11 countries. In 2022 Cao pledged CNY10 billion (US$1.57 billion) through his charitable foundation to build a new non-profit university in Fuzhou in Fujian province.

To be called Fuyao University of Science and Technology, it will focus on applied science and engineering.

Cao, who himself did not complete high school, said in a recent interview with Caixin financial news service, he will donate another CNY10 billion to establish a scholarship fund. “I will use my name and reputation to attract social donations as the main source of funds for the university in the future,” he was quoted as saying, adding the university would be handed over to the government with himself in a supervisory role.

“The goal is to serve the country and the people. Education is not a business,” he told Caixin.

Revisions to Charity Law

China has revised its 2016 Charity Law, with revisions passed on 29 December, in order to promote more philanthropic giving.

Amendments focus on tax cuts for donors and have been brought up to date to include donations for emergency relief and online appeals. It comes into force this September.

New amendments also allow charitable organisations to engage in international exchanges and collaborations.

The changes also mean more financial accounting to be reported to the government, including on the use and management of charitable assets. A new clause was also included stating that charitable work is subject to the leadership of the ruling Communist Party, which will be responsible for more supervision over charitable giving.

Private universities set up by corporate foundations in China have recently come under pressure for attempting to steer a more independent course.