Alibaba invests $ 15.5 billion to help China achieve “common prosperity”

The technology giant announced on Friday that it would invest the staggering sum in 2025 with a focus on five priorities: technology innovation, economic development, high-quality job creation, supporting vulnerable communities and establishing a special development fund.

The company also set ten specific goals that it plans to address, from increasing technological investment in the less developed regions of the country to improving the well-being of workers in the concerted economy to working to accelerate the growth of small businesses and agriculture.

Alibaba is also creating what it calls the “Working Committee for the Advancement of Prosperity,” which will be headed by President and CEO Daniel Zhang.

“Alibaba is a beneficiary of strong social and economic progress in China over the past 22 years. We firmly believe that if society goes well and the economy goes well, Alibaba will do well,” it said in a statement on Friday.

“We look forward to doing our part to support the realization of common prosperity through high quality development.”

Alibaba shares closed slightly in New York on Thursday, after the state-run Zhejiang Daily reported for the first time the news. Shares of the company in Hong Kong fell 3.5% on Friday.

Alibaba’s promise came just a week after another major Chinese e-commerce company, Pinduoduo (PDD), promised to deliver all its profit during the last quarter to rural development projects in the country.

Last Tuesday he said he would give $ 372 million to the development of China’s agricultural and rural areas, with plans to give 10 billion yuan ($ 1.5 billion) to similar causes in general.

The decision was significant for the U.S.-listed company, which made profits for the first time as a public company in the quarter ended June.

In the same way, Tencent (TCEHY) announced last month that it would dedicate 50 billion yuan ($ 7.7 billion) to achieving Beijing’s goal of “common prosperity.” The company said it would aim to help increase the income of the poor and address educational inequality, among other initiatives.

The ultimate goal

President Xi has repeatedly stressed the importance of “common prosperity” as the goal of the Chinese Communist Party, with state media increasingly emphasizing the importance of redistributing wealth.

The phrase itself is historically significant in China, and Xi’s mention of the term echoes its use by President Mao Zedong over the past century.

At the time, the former communist leader also advocated “common prosperity” as a way to mobilize peasants and remove power from rural elites, including wealthy landowners and farmers.

In recent years, one of Xi’s main political goals has been to alleviate poverty throughout China. Its latest edict has amassed even more pressure on the country’s wealthiest citizens and businesses, who are already facing tougher regulations as Beijing continually reigns in private sector power.

Earlier this year, Alibaba itself received a record $ 2.8 billion fine for acting as a monopoly. Since then, the company has continued to face questions about regulatory control, although executives have tried to convey that the matter has been resolved.

– CNN’s Beijing office and Laura He contributed to this report.

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