Friends in need

On May 12, just hours after the killer earthquake hit Southwestern China's Sichuan province, employees at Shenzhen-based telecoms equipment maker Huawei Technologies received a notice at the internal corporate communications platform urging them make donations to the victims.

The response was overwhelming. By 18:00 May 16, donations hit 15.3 million yuan, not including those by Huawei's overseas employees who donated money through local Red Cross agencies.

Besides that, privately held Huawei also made a corporate donation of 5 million yuan in cash and sent much-needed telecom equipment and mobile phones worth millions of US dollars to the quake-hit areas. It has also flew about 200 engineers and technicians to Sichuan to help telephone operators restore disrupted communications.

With compelling images and stories from the quake-hit areas where more than 40,000 lives have been claimed tugging at the heartstrings of people around the world, Chinese private businesses like Huawei are making high-profile donations to aid the relief efforts.

And their generosity, spurred by both the patriotic desire and commitment to the local community, is pushing their philanthropy to a new high.

Hitting the headlines last week was Tianjin Rockcheck Steel Group. At an earthquake relief fund-raising event at China Central Television (CCTV), Zhang Xiangqing, chairman of Rockcheck, announced an initial donation of 30 million yuan but quickly increased it to 100 million yuan on the TV show, which took many by surprise. Zhang was a survivor of a 7.8-magnitude earthquake which flattened Tangshan, a city in Hebei province, and killed hundreds of thousands of people including Zhang's parents.

Zhang and his wife own a 100 percent stake in the company, meaning the couple will donate the money themselves.

The JDB Group, a private beverage company best known in China for its popular herbal tea Wang Laoji, and Shandong-based Rizhao Steel, also topped the headlines by donating 100 million each.

China's private businesses have been pioneers in the country's philanthropies. In 1994, ten private entrepreneurs including New Hope Group chairman Liu Yonghao, launched the China Guangcai Program, initially targeting the anti-poverty effort.

Annual donations by the program exceeded 17 billion yuan by 2006, compared to 386 million yuan in 1997.

Despite that, most private businesses have been keeping low profiles, unlike State-owned enterprises (SOEs) which usually made public announcements for donations, largely in response to the government's calls in times of trouble.

And private businesses have been taking the lead to expand the country's charities. For instance, Huawei quietly donated 15 million yuan in cash and 25 million yuan in wireless telecom equipment when an enormous flood hit East China in 1998. And it was one of the few Chinese companies making donations when the killer tsunami hit Southeastern Asian countries in 2004 and when hurricane Katrina hit the southeastern coast of the United States in 2005.

Yu Pengnian, 86, board chairman of Yu Pengnian Management (Shenzhen) Co Ltd, is one of the top philanthropists in the country. Since making his first donation of an ambulance in 1982, he has donated more than 3 billion yuan so far but his name remains largely unknown to most Chinese people.

Most of the charity work by private businesses and entrepreneurs did not come under the spotlight until Hurun Research Institute started compiling and releasing the Hurun Philanthropy List, a ranking of China's most generous individuals in 2004.

Rupert Hoogewerf, head of the Hurun Research Institute, which has also been compiling the list of the richest in China for year, says he was surprised by the generosity shown by China's private businesses to aid the relief efforts in the quake-hit areas.

At least 73 of the 100 individuals on the 2007 Hurun Rich List had donated a total of $120 million after the first week of the Earthquake. All the Top 10 made donations, amounting to US$35 million, according to Hurun Research Institute.

The institute estimates donations from the individuals on the Hurun Rich List are the equivalent of 10 percent of the total donations received by the Ministry of Civil Affairs. That does not include the donations received under the Red Cross and other non-Ministry of Civil Affairs-controlled charities.

"The earthquake is a watershed for corporate social responsibility in China," says Hoogewerf, adding the donations by private businesses and entrepreneurs could continue to rise.

Hurun's statistics do not include those donated not through official channels and those not announced publicly.

However, not all the private entrepreneurs are so generous, at least in the perceptions of the Chinese public.

With the widening gap between the rich and the poor in China, there has been a smattering of complaints about affluent entrepreneurs who are little involved in philanthropy or tight-fisted.

China's biggest listed developer Vanke, has become one of the top targets after the earthquake in Sichuan.

Wang Shi, chairman of Vanke, which donated 2 million yuan, says on his much-read blog that donations should a burden to businesses and philanthropy should not always be about donating money.

And Wang says that Vanke has imposed a 10 yuan limit on each employees' disaster relief donation and the corporate donation of 2 million yuan is the ceiling set by the board.

That sparked tough criticism and seem to have tainted the image of Vanke which has been listed as one of the top corporate citizenships in China by several organizations.

A wave of outrage has forced Wang to apologize to the public when interviewed by Hong Kong's Phoenix TV. Vanke also announced it would allocate a fund of 100 million yuan to aid the post-earthquake rebuilding without any commercial motive.

Wang's dramatic shift underlines a unique context for philanthropy in China. With the influence of Confucianism, Chinese people have long been describing the affluent as "rich but cruel". That mindset has significantly changed since the country embraced its reform and opening-up policy and boosted the private economy.

However, with the growing disparity between the rich and poor and increasing monopolies in areas such as the real estate sector, some businesses, including leading multinationals, are at the center of controversy.

While the opinions on the Web about Wang and Vanke are becoming more moderate and rational after Wang's apology, observers say private businesses need to work out a well-heeled approach to philanthropy and learn from multinationals which have richer experience.

For instance, some multinationals such as Cisco Systems have adopted a matching funds practice in which the company contributes an equal amount of what employees have donated.

(China Daily 05/26/2008 page3)