[New Tang Dynasty Beijing time August 27, 2021]Following Tencent, the mainland online shopping platform e-commerce giant Pinduoduo announced a few days ago that it will invest 10 billion yuan to set up a “10 billion agricultural research project” to help “common prosperity.” According to expert analysis, Chinese business giants have invested heavily in public welfare undertakings, responding to the government’s “common prosperity” policy, which means breaking wealth and avoiding disasters.
On August 24, Pinduoduo released the second quarter financial report of this year, with revenue of 23 billion yuan (the same below), a year-on-year increase of 89%; operating profit of 2 billion yuan and net profit of 2.4 billion yuan.
Pinduoduo is China’s largest online shopping platform for agricultural products. As of June 30, 2021, Pinduoduo’s annual active buyers reached 849.9 million, with an increase of 26.1 million in a single quarter. The average monthly active users reached 738.5 million, accounting for the largest number of annual active buyers. 87%.
Chen Lei, chairman and CEO of Pinduoduo, announced at the performance meeting on the 24th that the “10 billion agricultural research project” will be formally established, and all profits in the second quarter and subsequent profits will be invested in the project first until the total amount reaches 10 billion.
Chen Lei said that the “Ten Billion Agricultural Research Project” faces the needs of agriculture and rural areas and aims to promote the advancement of agricultural science and technology. Although it will affect the short-term profit of shareholders, it is a pavement for the long-term development of the future, and the board of directors has approved it.
Outsiders believe that Pinduoduo’s move is catering to the “common prosperity” policy proposed by the Beijing authorities.
Tencent invested 50 billion to help “common prosperity”
The General Secretary of the Communist Party of China Xi Jinping presided over the Central Financial and Economic Conference of the Communist Party of China on August 17.
The next day, Chinese Internet giant Tencent announced an additional investment of 50 billion yuan to launch the “Special Project for Common Wealth” to provide continuous assistance in rural revitalization, income growth for low-income groups, improvement of the primary medical system, and balanced development of education.
As early as April, Tencent has invested 50 billion to launch “Sustainable Social Value Innovation” to help fields such as basic science, education innovation, carbon neutrality, FEW (food, energy and water), senior care technology, and public welfare digitalization.
In just four months, Tencent has provided 100 billion yuan to the government.
In this regard, Louis Lau, investment director at Brandes Investment Partners in San Diego, believes that “there are some companies that are trying to please China (the Communist Party) and intend to become targets of censorship.”
Tang Hao, a senior media person and host of “Crossroads of the World“, analyzed that Xi Jinping put forward the slogan “Promote Common Prosperity”, which means that big companies should make donations by themselves. If the rich don’t take the initiative to hand over the money, the CCP will help you. “Regulate your income” and even classify your wealth as “illegal income” and all confiscated it.
Financial commentator Qin Peng told NTD that the unique content of the common wealth proposed by the CCP includes the “three distributions”, which refers to the distribution of social resources by the rich through donations. In fact, this is the CCP’s open request for the wealthy people with acquaintances to quickly “break the wealth.” To avoid disasters, it is better to be active than passive.
David Wong, a senior equity investment analyst at AllianceBernstein in Hong Kong, said that although these companies are trying to gain the favor of the CCP, it remains to be seen whether they can truly be protected from widespread blows by the regulatory authorities.
Expert: “common prosperity” may change “common poverty”
According to Bloomberg News, since this year, seven rich Chinese people, including Lei Jun, Zhang Yiming, Wang Xing, Yang Yuanqing, and Huang Zheng, have donated a total of US$5 billion, which is 20% higher than the total amount of charitable donations in China in 2020.
According to the China Charity List, the total amount of these donations so far this year has exceeded nearly 27 billion yuan (approximately US$4.2 billion) of the total donations of Chinese companies and individuals in 2020.
Shi Yongqing, chairman of Centaline Property in Hong Kong, wrote an article that the term “common prosperity” surprised business friends. This may lead to the result of “common poverty”. As more people don’t work hard, economic growth will stagnate.
Liu Shangxi, president of the Chinese Academy of Fiscal Sciences, also holds the same view. On August 24, in an exclusive interview with The Paper, he said that “common prosperity” may become “common poverty”.
“History tells us that equalizing the rich and the poor cannot achieve the common development of all people, and may even bring development into a stagnant position.” Liu Shangxi said.
(Reporter Luo Tingting Comprehensive Report / Chief Editor: Wen Hui)
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