Alibaba Group Holdings Ltd (NYSE: BABA) in China is planning to invest 100 billion yuan by 2025 to support ‘common prosperity’. It is the latest corporate giant to support the initiative, which President Xi Jinping has promoted. Alibaba has announced ten programs to provide care to vulnerable groups, job creation and technological innovation.
Other companies have pledged to donate to common prosperity.
As part of a move to reduce inequality, Beijing has been urging companies to share the wealth. Common prosperity is not a new term but has gained traction recently. This was after the president used it in a meeting on financial and economic affairs in August. It highlights the government’s focus on equality.
Other companies that have backed up the country’s Communist Party goal include Tencent Holdings (OCTMKTS: TCEHY) and Geely Automobile Holdings Ltd (OTCMKTS: GELYF). Tencent Holdings has pledged 100 billion yuan.
According to Zhejiang News, Alibaba’s funds will improve insurance protection for gig workers such as ride-hailing drivers and couriers. Another portion will go towards subsidies for small and medium-sized enterprises. A part will go towards setting up a development fund for Common Prosperity.
Daniel Zhang, CEO and chairman of Alibaba, says that they firmly believe that if the society and the economy are doing well, then Alibaba will also do well. Alibaba says it is eager to promote the realisation of common prosperity.
Alibaba’s donation is significant even for a company its size. It has a market value of $461 billion and is expected to generate $143 billion by the end of 2022.
Alibaba has been a target for regulatory crack-downs
Recently, Alibaba and other tech companies have been the target for regulatory crack-down measures that involve consumer rights and monopolistic behaviour. In April, the company was fined $2.75 billion for monopoly violations.
The company has also been on the receiving end of criticisms due to its treatment of ride-hailing drivers and delivery workers. Most of these employees do not have basic medical and social insurance. Last month, operators from Ele.me, a food delivery platform, and Freshippo, a supermarket operator, which both belong to Alibaba, were among the operators called to a meeting with government regulators. The meeting was held to discuss labour rights and safety for delivery workers.
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