|5 May 2020|
“The first of my new two-part piece on Chinese philanthropists abroad during COVID-19, published by the Harvard China Philanthropy Project at the Ash Center. Enjoy!”
Waiting at Cotonou Airport was Benin’s Minister of Health, Benjamin Hounpatin, greeting not a state visit by foreign leaders but medical supplies donated by the Jack Ma Foundation. The shipment contained 20,000 diagnostic kits, 100,000 masks, and 1,000 sets of protective suits, with additional deliveries scheduled for April. On the same day, Hounpatin’s counterpart in Senegal, Aboudulaye Diouf Sarr, attended a similar ceremony at the Chinese Embassy in Senegal to receive a donation of equal size from the Jack Ma Foundation, witnessed by the Chinese ambassador in the country.
As the pandemic rages on, Chinese philanthropists have expanded their efforts on the global stage. Jack Ma’s pledge to donate 6 million masks, 1.1 million diagnostic kits, 60,000 sets of protective suits, and 60,000 protective goggles to 54 African countries generated significant media attention. However, he is not the only Chinese philanthropist going abroad. The Tencent corporation launched a ¥100 million Global Anti-Pandemic Fund and donated $10 million to the World Health Organization (WHO) COVID-19 Solidarity Response Fund; the real estate conglomerate Evergrande Group set up a ¥100-million Evergrande International Anti-Pandemic Rescue Fund for international humanitarian efforts; the financial conglomerate Fosun International and Taikang Life Insurance co-created the ‘Global Aid Project’ which has completed shipping personal protective equipment (PPE) donations to Germany, South Korea, Japan, Iran and other countries seeking donations.
Such philanthropic activities overseas followed months of philanthropic support in China of efforts to counter COVID-19 at home. According to Yishan, a charity data-gathering site, a total of 44,529 companies donated ¥35 billion to fight COVID-19 domestically as of April 5th. There are 18 companies with a donation of ¥100 million or more. In Hubei alone where the epidemic was the most severe, charitable donations (¥11.5 billion) exceeded the provincial fiscal budget on COVID-19 disease control (¥10.9 billion) on February 17th, highlighting the substantial participation of the private sector donors in strengthening China’s COVID-19 response.
For most of the past century and a half, China had been a recipient — not a provider — of philanthropy abroad. However, as the world ramps up responses to mitigate COVID-19, a new group of philanthropists from China is emerging, often in partnership with others abroad, to establishing new models of charitable giving and potentially transforming the structure of global philanthropy.
This two-part blog contribution is about that future — the emergence of Chinese philanthropists abroad — and what it means for the COVID-19 pandemic and beyond. In a few months, the landscape of international philanthropy may have undergone a significant shift, with a heightened level of Chinese philanthropy abroad.
Four areas of philanthropic activities have particularly attracted the interest of Chinese philanthropists: medical aid, R&D for COVID-19 medical products, information-sharing with the international community, and direct cash donations.
Over 74% of fundraising activities across 20 online charity platforms in China targeted the supply of masks, protective suits, gloves, and other medical equipment for frontline healthcare workers
Domestically, medical aid — in the form of diagnostic kits and personal protective equipment (PPE) — is the most popular choice among Chinese donors for COVID-19 related giving. According to the Fundraising Center, a charity analysis company, over 74% of fundraising activities across 20 online charity platforms in China targeted the supply of masks, protective suits, gloves, and other medical equipment for frontline healthcare workers.
Going abroad, Chinese donors are now replicating their domestic strategy and delivering PPE and diagnostic kits to other countries in need. The CSR analytics company CSR Cloud reports that, as of March 30th, at least 61 Chinese companies have so far donated PPE, including over 22 million masks to 69 countries. The data include the direct donation of leading Chinese companies such as Alibaba, Oppo, and Fosun but fail to capture companies that donate abroad via third parties, most notably the 100-million CNY donation of the Evergrande Group to the Red Cross Society of China to fund its mission to donate PPEs and fight COVID-19 abroad. As China embarks on a province-to-country aid strategy, there has been a wave of smaller sized regional companies donating PPE to Low- and Middle-Income Countries (LMICS), though the overall data are still in the collection phase at this early stage. Nonetheless, total medical aid by Chinese companies overseas is likely to far exceed the level currently reported.
In April 2020, China has significantly boosted the manufacturing of PPE and diagnostic equipment. According to the State Council, daily production of masks has reached 100 million masks as of April 2nd, a 12-time increase since early February. On diagnostics, the current daily production is enough for 2.6 million tests. As the pandemic expands into more countries and the demand for PPEs expands, Chinese private actors have at least three distinct advantages in providing medical aid.
Firstly, many Chinese companies are in positions of financial strength. To illustrate with an example, the Chinese government donated 600,000 masks to Malaysia on March 28th, with the Chinese ambassador hosting a donation ceremony. Three days later, a shipment of 1 million masks arrived in Kuala Lumper donated by the Chinese food company Perfect Company. Similar examples of philanthropists’ out-donating’ the Chinese government are growing in the Philippines, Indonesia, Iran and elsewhere in the world.
Secondly, fighting COVID-19 domestically has given private donors first-hand experience in dealing with medical manufacturers. That translates into personal networks, a technical understanding of medical products, and price-bargaining leverage on the ground. The prices of PPE have inflated across the spectrum. An N95 mask cost ¥10 for wholesale in January and in April cost as much as ¥30 to ¥50 depending on the manufacturers and intermediaries. As parties around the world come to China for supplies, it is virtually impossible to arrange procurement without credible local help.
Thirdly, many Chinese companies already have an export infrastructure built up through a long history of international trade. Using Alibaba as an example, its subsidiaries Cainiao Logistics and the Electronic World Trade Platform (eWTP) are already engaged in international commerce. When the emergency related to COVID-19 emerged, the same infrastructure — consisting of logistical companies, foreign ports, local connections, and operational teams –quickly pivoted to delivering donated goods. This is especially important while flights and cargo ships are halted by COVID-19. With money, local connections, and logistical capacity, private actors in China are uniquely placed to bridge the global supply gap of PPEs and diagnostics.
Another area of focus for Chinese philanthropists in the COVID-19 response is R&D for COVID-19 medical products — in particular vaccine development. On February 7th, Tencent announced an additional ¥10 billion donation, which allocates ¥500 million for funding R&D activities and ¥15 million pledged to Tsinghua University Education Foundation for vaccine development. On February 10th, the Evergrande Group donated ¥100 million to the Chinese Academy of Medical Sciences to create a fund for COVID-19 drug innovation. Two days later, the Taikang Insurance Group gave ¥10 million to the State Key Laboratory of Virology of Wuhan University set up in the aftermath of SARS in 2004. These are but a few examples of philanthropic engagement on COVID-19 R&D. The Jack Ma Foundation is leading donations to international R&D efforts. On March 2nd, the foundation pledged A$3.2 million to the Peter Doherty Institute for Infection and Immunity in Australia to accelerate vaccine development for COVID-19.
As China recovers from the peak of infections, there are lessons to share internationally so that each country need not start from scratch in COVID-19 response. Joining universities and public agencies that already host online webinars for the international audience, philanthropists too are taking part in expediting the global informational flow. The digital health platforms WeDoctor and Dingxiang Doctor both rolled out English versions last month, with Tencent open-sourcing the international module of its COVID-19 WeChat mini program for researchers abroad. The ‘Handbook of COVID-19 Prevention and Treatment’ compiled by the Jack Ma Foundation and Zhejiang University provides a practical guide on therapeutics and in-hospital management for healthcare workers around the world in 19 languages, published on the website of Global MediXchange for Combating COVID-19. Information-sharing is perhaps the most low-cost and high-impact forms of COVID-19 intervention. In equipping frontline workers with the practical know-how on COVID-19 response, private actors can create an impact more durable than medical goods themselves.
Finally, direct cash donations is another area of philanthropic activities currently being explored by Chinese philanthropists. On April 3rd, Tencent pledged to donate $10 million to the COVID-19 Solidarity Response Fund set up by the World Health Organization. There are also rumors that Bytedance is considering giving to Global Alliance on Vaccine Innovation (GAVI), an international organization focused on providing vaccines to LMICs. Breaking away from the trend of donating material goods, Tencent (and potentially Bytedance) is a rare example both of Chinese private donors delegating spending decisions to international trusted partners and directly funding international organizations to solve global problems. As international cooperation deepens between Chinese companies and multilateral organizations, we may expect to see more direct cash donations in crisis response and other fields of international development.
It is important not to overemphasize the impact of Chinese philanthropists… It is reasonable to estimate that commercial orders — not aid– take up the vast majority of medical export from China to the rest of the world
The sketch above invariably fails to fully capture the diverse and fast-moving activities by private donors from China in the global COVID-19 response. However, one thing is clear: Chinese philanthropists have been proactively engaging in international philanthropy. By doing so, they have helped fill a critical gap of medical supplies, R&D funding, knowledge, and cash to hundreds of countries around the world.
However, it is important not to overemphasize the impact of Chinese philanthropists. On medical aid, commercial demand for medical products is skyrocketing globally. According to data published by the State Council, the total export of COVID-19-related medical supplies in March reached ¥10.2 billion, in which there were 3.86 billion masks with a total value of ¥7.72 billion alone. At this stage, it is unclear how much export is accounted for by philanthropic donations. But given the high willingness to buy from international parties, it is reasonable to estimate that commercial orders — not aid– take up the vast majority of medical export from China to the rest of the world. Where markets operate, wealthy bidders with the resources and connections to suppliers tend to crowd out the less wealthy. Fortunately, donations by Chinese philanthropists hold the potential to alleviate this. News of Chinese companies donating to LMICs has been almost daily during the later stage of the pandemic. While the scale of private medical aid is unlikely to match the size of commercial orders, philanthropy nonetheless buffers LMICs against the global capitalistic distributive system for medical supplies during a dire time.
On R&D, the contribution of Chinese philanthropists is still in an early stage. So far in the international scientific effort against COVID-19, organizations such as the Coalition for Epidemic Preparedness (CEPI), GAVI and the newly established COVID-19 Therapeutics Accelerator have played leading roles in organizing the scientific community and supporting the development of vaccines and drugs for COVID-19. Behind the organizations stand a host of Western private companies and governments, with few Chinese philanthropists taking part. Bytedance was recently rumored to be interested in funding GAVI, though not on COVID-19-related R&D work but regular immunization programs for African countries. According to the Global Pandemic Monitoring Board, CEPI requires total funding of $2 billion to develop and manufacture vaccines for COVID-19; currently, only 30% of the requirement is met. Joining forces with international partners such as CEPI and COVID-19 Therapeutics Accelerator will allow Chinese philanthropists to engage with the global scientific community at the top level, helping them enter the top-tier global innovation ecosystem for COVID-19 while channeling crucial resources to the most internationally trusted parties.
In the other areas of activities, philanthropists have provided welcome responses. Information-sharing on COVID-19 response is crucial especially in the early days of a local outbreak, and it is a niche that philanthropists in China could uniquely fill in the short term. However, as more countries become infected and new disease control models tested, the amount of experience and evidence generated outside China has enriched the global knowledge pool for COVID-19 response, diluting the impact of Chinese philanthropists in this respect. And although Tencent pledged $10 million to the COVID-19 Solidarity Response Fund for WHO and is one of the major donors, the pledge accounts for only a small percentage of the total $150 million raised in donations.
The donations and impact of Chinese philanthropists on the ground are unlikely to match national governments and globally leading foundations. As private wealth accumulation happened only in the past 30 years since the Reform & Open-up in the 80s, modern philanthropy is only just emerging in China. Yet the newfound enthusiasm of Chinese private donors for global outreach and participation highlights both a critical shift in their giving approaches and a clue to what may be coming next in international philanthropy.
Any rising group of actors on the international stage generates both excitement and concern. How much will Chinese philanthropists actually contribute to solving global challenges? What are their motivations? How are their philanthropic activities related to the Chinese state? In the next blog entry, I will evaluate such questions and argue that the rise of Chinese philanthropists abroad and their influence is an important trend in global philanthropy — but will only succeed if they manage to strike partnerships and alliances with international partners. In that process, both the philanthropists and the global philanthropic system must work to create a welcoming, collaborative and open-minded environment that is conducive to cooperation, while also focusing on providing global goods for the global community.
The jigsaw of international coordination remains incomplete as long as private contributors from China — the world’s second-largest economy — remain missing. ‘Global challenges require a global response’ is trite, particularly during this pandemic. However, if there is anything we have learned from responding to COVID-19, it is that the world needs bridges that connect, not walls that separate. Even if China or the US manages to individually suppress all domestic COVID-19 cases, no country is safe until all countries are safe in the war on infectious diseases. Together, the world is stronger. The same applies to philanthropy too.
“Part 2 of my article on Chinese philanthropists abroad during COVID-19. I would say this is the juicier one than the first one, with a take on the relationship between philanthropic acts, business motives and the Chinese state. Hope you enjoy it.”
Before the COVID-19 era, limited Chinese philanthropic activities abroad were evident — particularly in response to crises. The 2004 Indian Ocean Tsunami saw the first wave of foundations engaging in overseas humanitarian rescue and post-crisis construction, but those activities were limited to a handful of state-owned foundations such as the Red Cross Society of China, the China Charity Federation and the China Foundation for Poverty Alleviation. In the aftermath of the 2015 earthquake in Nepal, dozens of private charities including the One Foundation and the Amity Foundation joined a variety of state-owned foundations to conduct rescue-focused relief missions providing emergency material supplies. Some of these charities continue to operate in communities in Nepal today.
During the current COVID-19 response period, philanthropic giving by Chinese private actors has grown in terms of scale, breadth, and the identity of the recipients. In terms of scale, as highlighted in Part 1, private donations often arrived in target countries en masse, often in addition to, and exceeding, government aid. In terms of breadth, the giving includes medical products, R&D funding, information-sharing, and cash, provided by a diverse group of donors including individuals, companies, foundations, and charities. In terms of destination, a large proportion of the aid recipients this time are advanced industrial Western and Asian countries, and not less developed countries of Africa and South Asia.
After China’s century-long history of often receiving assistance from the West, Chinese non-state actors now confront a historical — albeit temporary — opportunity to aid the West in return
Of course, philanthropy in international aid is not new. In the colonial era of the 19th century, Christian missionaries embarked on ‘civilizing missions’ in Africa and Asia, exporting the bible together with Western medicine and education. In the 20th century, religious missionaries were replaced by capitalist philanthropists such as Carnegie, Rockefeller, and Ford, who built modern hospitals and schools and funded economic and social development around the world. Arriving in the 21st century, a new generation of foundations such as the Gates Foundation began contributing to development through scientific innovation with substantial funding. According to OECD surveys, between 2013 and 2015, private philanthropy is the top source of finance for the health sector of developing countries. Private financing has become an important channel of international aid.
And for almost a century and a half, China had primarily been a recipient — not a giver — of international philanthropy. The first Christian missionary to export Western medicine to China was the Yale-educated American Peter Parker, who arrived in Guangzhou in 1834 to establish the Ophthalmic Hospital while preaching the Christian faith. Since then, waves of Christian missionaries and Western foundations built hundreds of hospitals and schools across the country and laid the educational and infrastructural foundation of modern medicine in the pre-communist China. The Maoist era saw a temporary freeze on Western philanthropic activities. As the country began to reform and open up in the 1980s, Western foundations such as the Ford Foundation actively supported the reform agenda, and continue to play an active role in China’s development today. Since the opening of its China office in 1988, the Ford Foundation has made grants totaling $356 million in China. The China Medical Board and Peking Union Medical College are perhaps the crown jewels of Western philanthropic giving in China, which were established by the Rockefeller Foundation in 1921 and remain as some of the most reputable medical institutions in China.
The current rise of Chinese philanthropists shifts the paradigm of philanthropic giving in international aid in at least two ways. First, it institutes a new direction in the flow of charitable resources. After China’s century-long history of often receiving assistance from the West, Chinese non-state actors now confront a historical — albeit temporary — opportunity to aid the West in return. Secondly, it introduces new actors to the field of international aid. The global philanthropic scene is traditionally dominated by Western and often American private actors. However, as Chinese entrepreneurs amass great wealth from their country’s rapid economic growth, it was perhaps only a matter of time before someone like Jack Ma appeared in the global philanthropic stage. By collectively donating abroad in COVID-19, Chinese philanthropists are discernibly stressing their aspiration, capability and responsibility in global emergency response. With new actors come new priorities, incentives, cultural norms and modes of actions. The way Chinese philanthropists conduct their donations will almost certainly differ from their Western counterparts. Building on the connections and expertise from COVID-19 response, Chinese philanthropists have the potential to develop a new voice in the global philanthropic ecosystem.
The Chinese may, therefore, be disrupting the status-quo of international philanthropy. How should the West view them?
Two concerns are particularly pressing in evaluating the activities of Chinese philanthropists: what is their relationship with the Chinese state? Are there ulterior business motives behind their philanthropy?
Philanthropic activities in China can often appear to be in sync with the government agenda. As the 2020 Ash Center report on philanthropy in China shows, in 2018, poverty alleviation attracted the most donations from Chinese donors, reflecting the national policy agenda to eradicate poverty by 2020, as highlighted during the 19th CPC National Congress. Indeed, this shift was a marked departure from the data of previous years, in which the educational sector reliably received the most Chinese elite donations. Recently in the global COVID-19 response, the Chinese government has been accused of ‘mask diplomacy’, using the donation of masks and other key medical goods as a geopolitical soft power campaign. Extending from the skepticism of mask diplomacy is a question about the political innocence of philanthropy. Repeatedly, the government spokesperson from the Ministry of Foreign Affairs commended Chinese companies on donating abroad. And among the destinations of private aid are countries with long ties to China — Iran, Cuba, Pakistan, African countries — supporting the same narrative that the donations of Chinese philanthropists such as Jack Ma may be a mere operational arm of the Chinese mask-diplomatic machinery at work. The fact that President Paul Kagame of Rwanda and Prime Minister Abiy Ahmed of Ethiopia personally greeted Jack Ma on Twitter for donating medical goods only heightens the cynicism on the relationship between philanthropy and politics.
Understanding the relationship between Chinese philanthropists and the state requires navigating between two unnuanced and polarizing views, one that says Chinese philanthropists act according to government wishes, and the other says they act independently from the government agenda. In between the dichotomic extremes are possibilities of embedded social networks, cultural proximity of the family and the state, a Tianxia worldview that hierarchizes social relationships and allocates duties according to individual positional attributes in families, occupations, social circles, and capability. Philanthropic donations abroad are often private decisions taken by private actors unavoidably coupled with personal ambitions. It is highly doubtful that Jack Ma donated hundreds of millions of masks to Africa under direction from the CCP Politburo. However, sitting at the intersection of national foreign strategy and personal philanthropic missions, it would be naïve to think philanthropists abroad act independently from subtle and implicit forms of political influences. In the West, Jeff Bezos may pursue philanthropic missions on climate change to fulfill personal ambitions irrespective of the opinion of Donald Trump. In China, the public perception of success for business elites much depends on the judgment of the political establishment. It would be inaccurate to dissect the personal from the political or simply treat one at the subordinate of the other.
For some, an in-depth look at the business activities of Chinese philanthropists abroad provides context for their charitable intentions. The medical aid of the Jack Ma Foundation will provide support to the ailing medical facilities of Europe and Africa. However, with the news on Jack Ma’s philanthropy coupled continuously with mentions of Cainiao Logistics and the eWTP global commerce network — two spearhead projects in Alibaba’s expansion abroad — that help deliver the donated supplies, many may wonder whether high-profile donations will bring new international business opportunities to Alibaba during COVID-19 and beyond. Tencent too is a subject of suspicion as the announcement of a partnership with the UN on using Tencent Meeting and WeChat Business for the 75th anniversary of the UN coincided with the company’s pledge to donate $10 million to the WHO. To the China skeptic, Chinese actors seem to embark on an overseas profile-raising business development mission through philanthropic means.
While some skepticism is always warranted when analyzing any giving, such judgments should seek to appreciate both the real-world impact of philanthropists in recipient countries during a dire global shortage of medical supplies and the complexity of human intentions. On intentions specifically, the China skeptic may be holding Chinese philanthropists to the standard of a ‘selfless philanthropist’ which, taken to the extreme, is a fantasy standard that seeks to root out all selfish intentions and personal benefits so that philanthropists lead by genuine self-sacrifices. When is philanthropy ever ‘selfless’? Is that a standard that philanthropists can realistically be held to in every case? That is not a ‘Chinese’ issue but a common question of philanthropy around the world.
Nonetheless, one may see the philanthropic activities of Chinese philanthropists as operating under a different set of sensitivities. In the West, Bill Gates would undoubtedly receive criticism if the Gates Foundation suddenly began business development initiatives for Microsoft in Africa. In China, crises are often considered a prime time to showcase the potential of company products in promoting the public good. The supermarket chain Wumei publicly prided itself on remaining open throughout the COVID-19 period in China to provide life essentials to Chinese citizens. The Chinese conglomerate Mengniu Dairy donated 740 million CNY as well as 14 million packs of its own milk product to frontline workers in Hubei, and yet few would scold them for masking marketing with philanthropy. Be it Jack Ma’s Cainiao Logistics, Tencent’s Tencent Meeting, or BGI’s own diagnostic kits, philanthropic activities by Chinese actors abroad stems naturally from a common domestic practice that fits the narrative of doing good by doing business.
Underlying the philanthropic giving of Chinese donors is perhaps a different ethical doctrine from their Western counterparts. Western philanthropy is founded on a Judeo-Christian universalist doctrine of the equality of persons, the idea that all lives are morally equal and therefore deserve equal opportunities to thrive. In contrast, the philanthropy of Chinese capitalists seems to be guided by a contractarian worldview that puts the value of reciprocity and mutual advantages as the basis of giving. The most common forms of giving in China take place not on the global or national levels but in communities, families, and friend circles. Here, regular giving from the elderly to the young and from the rich to the poor creates positive feedback loops and is sustained by long-term communal interactions.
As the Chinese philanthropists rise from the local to national and global economy, the legacy of a communal giving culture is carried with them when interacting on the international philanthropic stage. The universalist may regard providing aid with business attached as fundamentally distorting the core spirit of philanthropy. To the contractarian, the practice of giving without receiving creates an unsustainable ecosystem of philanthropy which damages the basis of global social cooperation in the long-run. The clash of ethics will likely generate mistrust and suspicions from both sides as Chinese philanthropists begin expanding activities abroad in the coming years. However, it is important to remember that modern philanthropy is still relatively young and underdeveloped in China. The ethical outlook of the sector will likely oscillate between universalism and contractarianism as Chinese donors interact with their Western counterparts.
Regardless of a moral basis, the ultimate measure of philanthropy is a meaningful impact on the ground, in improving the lives of underprivileged people. Jeffrey Sachs once remarked, ‘the Rockefeller Foundation was the world’s most important development institution of the 20th century, and the Gates Foundation can be that of the 21st century.’ Given China’s substantial resources and newfound aspirations to solve global challenges, the engagement with Chinese philanthropists may unleash new powerful global alliances in international development. To realize the full potential of global philanthropic partnerships, Chinese and Western parties must treat the other with good faith, open-mindedness and an appreciation of each other’s cultural origins. With Chinese philanthropists beginning to go abroad, we may only be witnessing the beginning of the next chapter.
Note from editor: Please leave any feedback, questions and reflections in the comments section below!
And congratulations, Leo!
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