China's Alibaba To Invest $15.5 Billion For 'Common Prosperity' (reuters.com) 66
China's Alibaba Group will invest 100 billion yuan ($15.5 billion) by 2025 in support of "common prosperity," it said, becoming the latest corporate giant to pledge support for the initiative driven by President Xi Jinping. From a report: Beijing has been encouraging companies to share wealth as part of the effort to ease inequality in the world's second-largest economy. Other companies that have made similar announcements include Tencent Holdings, which also pledged 100 billion yuan, and Geely Automobile. The government-backed Zhejiang News website said Alibaba's funds will go towards areas such as subsidies for small and medium-sized enterprises and improving insurance protection for gig economy workers such as couriers and ride-hailing drivers. It will also set up a 20 billion yuan "common prosperity development fund", the newspaper said, with Alibaba confirming the report.
"encouraging" companies to share wealth. Come ON.. (Score:2, Insightful)
Where can I bet against the 2022 Winter Olympics? (Score:2)
At least the question has some relevance to some part of the story. My theory is that China is about to cancel the Winter Olympics, which can be mapped to an "investment" in the form of a wager.
As for the actual story, my theory is that China has decided companies should not get too big. Another good idea for bad reasons. I like smaller companies for the sake of smaller government, but the Chinese government just doesn't want any interference.
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In the US, companies are "encouraged" to screw everyone.
China might have a good (socialist) idea here.
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In the US, companies are "encouraged" to screw everyone.
China might have a good (socialist) idea here.
In the US, this is called a tax. In China, this is a "voluntary donation". The other differences are that in the US, once you pay the tax, you don't have further obligations. Also, you can hire lawyers and accountants to find loopholes around the tax. In China, these last two differences don't exist.
Re: "encouraging" companies to share wealth. Come (Score:3)
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Keep telling yourself that, Ivan.
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It should be no surprise that China didn't invent this one either, the idea of moving some portion of profits from capitalism into the public good is not new. [wikipedia.org]
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Common Prosperity in China, CSR in India ... (Score:2, Troll)
Looks like China too has similar program, not sure who spends the money and how it is regulated and how it is different from tax.
It is interesting the corporations in America are belly aching the taxes, constantly claiming/lying
Lost in translation (Score:5, Insightful)
"Common Prosperity" mostly means participating in the propaganda drive to enforce "revolutionary values."
It may actually work, and drive people to be more revolutionary. It is a bit hard to teach "revolutionary values" when you're not allowed to teach the history of the revolution, and what Mao's values were, since those values are now illegal.
The new effort to ban effeminate men from media is part of the "Common Prosperity" program, ie, if you don't hold the same values as Count Pooh, you won't prosper. Because the hammer will come down on you.
In the case of Alibaba, this is about forcing taxi drivers to buy more insurance, and forcing small businesses to sell an ownership stake in their business to one of the big corporations that is enforcing the government mandates. This way they can just take over small businesses that don't "prosper."
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The drivers are being forced to buy job insurance, this isn't about liability insurance.
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Logically, it should be hard to teach revolutionary values because the revolution is over and the CCP doesn't want another one. Once you're in charge, revolution isn't in your favor anymore.
Compare Cuba, where they still know what the revolution was about, and still try to teach those values, and call them "revolutionary values."
The problem isn't that the revolution isn't over, it is that the current dictator doesn't share the old values, and the new values are only written in hyperbole.
I'm sure it was voluntary (Score:5, Interesting)
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This will be *very* interesting to watch.
The US just reduced corporate taxes vastly, to keep companies from taking profits offshore. Yet the US has a populist push for infrastructure spending paid for by wealth taxes and higher corporate taxes. There is an international minimum corporate tax rate [wikipedia.org] proposal that a lot of nations are signing on to. And now China is getting big mega corporations and they too want to tax them. And yet the biggest Chinese companies are state-owned so they can't move. But Ten
Re:I'm sure it was voluntary (Score:5, Interesting)
It is as you say, a disincentive for companies to do business in China, but the CCP is probably more concerned with companies getting big and powerful enough to threaten the government's stranglehold on power.
IIRC, Jack Ma had grown bold enough to disagree publicly with the policies of some of China's powerful, entrenched leadership. His comeuppance, and perhaps this levy against other powerful, nongovernmental corporations, is a reminder that, "This is China!"
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Bingo. Any competition to the CCP must be Jinpinged lest the CCP and Dear Leader look smaller than they already do. Even Falun Gong doing calisthenics on the front lawn gives the CCP the collywobbles.
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Well, that's one way to keep big companies from wanting to do business in China: force a few big ones to "volunteer" to pay huge sums of money to government initiatives. Hardly seems like a fair playing field.
The corporate welfare state in western countries isn't a fair playing field either. Small business is vastly disadvantaged compared to international corporations.
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It works fine in Nordic countries. High tax rates, heavy regulation, companies expected to operate for the good of the citizens and their staff first and foremost.
Nordic countries are rich and prosperous.
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The incentive to do business in China is access to the world's largest middle class. Since when did communist China promise a level playing field for corporations?
"subsidies for small and medium-sized enterprises" (Score:5, Insightful)
. . . "Pork for pals of The Party elite".
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You think they park them in small businesses?
It's more likely that this is to placate the masses, which will in turn ensure that those in power can remain there.
Nice company you have there (Score:3)
it'd be a shame if someone stole all your IP.
Now how much are you going to be donating?
Re:Nice company you have there (Score:5, Insightful)
it'd be a shame if someone stole all your IP.
It's a china based company, they can take a lot more than their IP.
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it'd be a shame if someone stole all your IP.
We're talking China here. There's no such thing as IP in China. Every western company that's not run by complete morons who need reminders to breathe knows that if you open a shop in China, they'll take your IP, copy it, open an identical factory in the next city and undercut your price.
Companies still do it, because it's still profitable to produce in China. But if you think you can do business in China and keep your IP, you're for sure also the proud owner of several bridges.
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Alibaba doesn't have any mystical IP, their website is shit.
What they have is money, and the government in China said to the CEO "you will give us more of that now or sale of your organs to the highest bidder will help make up the difference"
they're not stupid (Score:1, Interesting)
The Chinese aren't stupid. They watched all of the Soviet Union, and its collapse. They were taking notes. They also watched the rise and decline of the West, also taking notes.
They're not going to let the private sector wreck the economy in the name of freedom, not are they going to dictate, top-down through layers of corruption like the soviets of old.
In other words, they are doing the right thing for their economy. And by extension, for their people. IMO they should be respected in the same way one respe
Re: they're not stupid (Score:1)
The Chinese aren't stupid.
Your generalization is, however.
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"Your generalization is, however."
Prove it. Then maybe you can appear to be smart, instead of having to tear down the other guy.
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I think that is a good take. They see how free market capitalism offers benefits but when unmanaged it goes bad after a while. Western capitalism shifted from managed to unmanaged, with wealth becoming increasingly concentrated and governments becoming less powerful to correct that. Finance sector out of control. China is striking a balance. They're taking a lot of measures now to keep the overall system healthy, all considering the centralized system they started up with.
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They're not going to let the private sector wreck the economy in the name of freedom,
They're not going to let the private sector threaten their stranglehold on the future of China, you mean?
not
(nor, I presume)
are they going to dictate, top-down through layers of corruption like the soviets of old.
That's exactly what they are doing here.
Shakedown by the CPC (Score:3)
You always knew all the rhetoric about the wealthy tech billionaires was going to turn into the Party hacks getting their share.
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Pretty much the same as lobbying and campaign donations in the US, then. And sweetheart deal for insiders.
Yeah, and? (Score:3)
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Mainly because they haven't done it for 30 years. They'd been moving in the opposite direction until recently.
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Almost every expert on China's economy has been talking about issues with housing property prices, with birth rates, with gini coefficient, etc.
Now that China is doing something about all those issues, all of the sudden, everyone is yelling that China going back to the 1960s. Those dirty Commies. You can't trust them. Well if you believe that, then you should also not worry about China anymore right? After all Western pundits believe the 60s were absolutely the worse period for China. Some how I doubt that
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Why are so many people in the comments shocked that the Chinese Communist Party would forcibly redistribute wealth from large companies? Did you forget they were Communist? Because the name might have been a clue.
They can't be communist, because they have currency. We know they have currency because we're talking about a forced transfer of same right now. Did you forget they had currency? Because the discussion of currency might have been a clue.
What they are is strongly authoritarian and oligarchic. But not communist. I bet you think North Korea is a Democracy, too.
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Not negligible (Score:3)
Shake down time (Score:2)
Shareholders money at work... (Score:1)
Wealth disparity under Communism? (Score:2)
I find it rather curious that a state that claims to be Communist should have a problem with wealth disparity. I thought that was a problem with Capitalist states. I would be interested to know what the statistics are for wealth distribution in China, compared to, say, the USA. I doubt that the CCP will tell anybody, though.
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They can't be communist specifically because they have both a class system (centered around The Party) and currency, which we're talking about being transferred here. A communism has neither of those things by definition.
North Korea is not a Democracy, and China is not a Communism. Just because they say so isn't a good reason to believe them.
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North Korea is not a Democracy, and China is not a Communism. Just because they say so isn't a good reason to believe them.
Exactly. I don't believe them. I would believe the CCP if they called themselves the Chinese Capitalist Party. This distortion of political buzz-words was covered very well by George Orwell, at least 75 years ago. Much of "1984" deals with manipulation of the meanings of words in order to wield power. The thing is, the CCP does not seem to care that they are actually ruthless tyrants, as long as they can spin the narrative to their ends, and appear to serve the glorious revolution.
The communism you describe
perhaps a backroom deal to avoid prosecution (Score:2)
I've got the perfect name for it (Score:2)
They can call it "the Greater East Asia Co-Prosperity Sphere"!
How is this NOT... (Score:2)