Tencent vows $7.7 billion in boost to Beijing’s wealth redistribution efforts

Shanghai, China, Aug 19 (EFE).- Chinese digital conglomerate Tencent on Thursday announced a fund to donate 50 billion yuan ($7.7 billion) to “common prosperity,” a day after the country’s president named it a key economic and social objective.

The boost to the government’s wealth redistribution efforts comes on top of the 50 billion yuan Tencent pledged in April to promote “sustainable innovations for social value.”

“This new strategy by Tencent is a proactive response to the national initiative,” the company said in a statement on Weibo.

“As a Chinese technology company that has grown up in the age of reform and opening up, Tencent is constantly thinking about how to use its own technology and digital capabilities to help society develop, so as to better give back to society.”

The private company’s statement notes that the decision was made after Xi Jinping made “common prosperity” a key goal during a meeting of the Central Financial and Economic Affairs Commission of the Communist Party of China on Tuesday.

The committee published a document in which it speaks of the need to reasonably adjust “excessive incomes” and to encourage individuals and companies to give more back to society.

According to a study published by the state China News Service, the two sectors with the highest average salaries in the country in 2020 were IT and software, and finance – sectors that account for practically all of Tencent’s income.

So far this year, the group’s shares have lost more than 40 percent of their value since their peak at the end of January due to the regulatory campaign undertaken by the government, which has affected key businesses for Tencent such as videogames and fintech services.

Despite this, in the first half of 2021, Tencent invoiced 23 percent more than in the same period last year, and its net profits rose 46 percent to 90.3 billion yuan.

In a conference following the presentation of these results late Wednesday, Tencent president Martin Lau said that “during this new wave of regulations” the company wants to “embrace this environment fully. And we want to establish ourselves as fully compliant.”

At the same time, he predicted more regulations for the digital sector in the future. EFE

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