Alibaba Pledges $15 Billion To China's ‘Common Prosperity’ Initiative

Alibaba announced Friday it will invest 100 billion yuan ($15.5 billion) by 2025 to push for "common prosperity," taking part in an endeavor that involves major Chinese tech companies in helping the government fight inequality.

Alibaba said the investment, in line with President Xi Jinping's economic vision, will be used in 10 initiatives, including bankrolling small enterprises and helping industrialize China's agriculture sector, digitizing rural areas, and the creation of "high-quality employment."

The funds are also expected to benefit insurance protection for gig economy employees like couriers and ride-hailing drivers, the government-backed Zhejiang News reported.

An Alibaba representative confirmed the report, without giving details. The company's stocks were little changed in New York trading, Thursday.

Alibaba will also create what it dubs as the Prosperity Advancement Working Committee (PAWC), which will be spearheaded by Chairman and Chief Executive Officer Daniel Zhang.

"Alibaba is a beneficiary of the robust economic progress in China over the past 22 years," CNN quoted Zhang as saying, adding the company firmly believe if society and and the economy are doing well, "then Alibaba will do well."

Shares of Alibaba Group were up 0.8% in pre-market trading Thursday, putting them on course for a fourth consecutive rally even as the China-headquartered tech company continued to face regulatory scrutiny.

Alibaba's shares in Hong Kong fell 3.5% on Friday.

China has been encouraging a growing number of its largest peers to share wealth as part of a campaign to loosen inequality in the world's second-biggest economy.

Pinduoduo, the fast-growing online commerce company now posing a major challenge to Alibaba, said it will donate its next $1.5 billion in profit to the welfare of Chinese farmers.

Tencent Holdings, the most valuable company in China, last month disclosed it will double the amount of funds it is allotting for social responsibility ventures to around $15 billion.

Other nations that have made a similar call include Tencent Holdings, which also committed 100 billion yuan, and Geely Automobile.

Xi has repeatedly highlighted the importance of "common prosperity" as a key objective for the country's Communist Party, with state-run media outlets underscoring the significance of wealth redistribution.