Chinese wealth and philanthropy expands alongside economic development
Expanding economic development in China has led to an explosion of the super rich and a surge in philanthropic donations, according to investment bank analysis and a wealth report.
As the country's nouveau riche expands with economic development, donations from the top 50 publicly disclosed philanthropists in China have risen eight-fold in the past three years, totalling US$10.9bn so far this year, according to investment bank UBS AG, as reported by Reuters.
The bank predicts that this should also be boosted in the next few years by much-needed tax incentives.
There are now 106 US dollar billionaires on Mainland China, more US dollar billionaires than any country other than the US.
At present donations to charity are restricted to fewer than 20 charities approved by the Chinese government, says the Reuters report, and individuals can offset just 2% of their salary against tax for charitable and philanthropic donations. However, the report states the Government plans to increase that to 12% as soon as next year.
Education is the biggest beneficiary of philanthropy followed by social welfare causes, health care and poverty alleviation.
Philanthropists are led by Yu Pengnian of Shenzhen-based trade and property group Pengnian Industries, who has been in the list's top four since 2004, and has donated US$260m to health and higher education since 2003, according to the Beijing-based Hurun Report 2007 China Philanthropy List.
According to the Reuters report poor tax incentives and difficulty in establishing a charity in China have encouraged wealthy Chinese to establish foundations in neighbouring Hong Kong, where the number of registered charitable foundations has doubled in the past decade to 1,200.
A sign of Asia's growing influence is former U.S. President Bill Clinton’s plan to hold his annual philanthropic summit in Hong Kong next year.