Tencent to Invest 50 Billion Yuan in Common Prosperity

tencent
(Source: Yicai)

After investing 50 billion yuan ($7.7 billion) in sustainable social value innovation strategy, Chinese technology giant Tencent announced plans on Wednesday to invest another 50 billion yuan in further supporting people’s livelihood, including rural revitalization, income increases for low-wage workers, improvements in the primary health care system and balanced development of education.

The firm’s Sustainable Social Value Innovation Program was launched in April for the purpose of forward-looking exploration in the fields of basic science, education innovation, carbon neutrality, “Food, Energy and Water” (FEW), technology for the elderly and digitalization of public welfare.

As part of these initiatives, Tencent intends to invest 100 billion yuan within four months. The company says it will continuously work on improving social well-being and common prosperity, contributing more in three distributions of social wealth.

The three distributions of social wealth are divided between the following areas: Business, government and public welfare. The third distribution method was put forward by a Chinese economist named Li Yining in 1994. Business aims at making profits and creating monetary wealth, but it might be distributed unfairly. The government carries out the second distribution through taxation, fees, subsidies, relief and other measures to ensure fairness. In line with resources, wisdom and influence, the society distributes wealth again on the basis of the first two distributions, checking for leaks and filling vacancies. In the third distribution, enterprises mainly carry out programs for public welfare.

Tencent‘s new initiatives mark a proactive response to the Chinese government’s national strategy. The 10th meeting of the Central Finance and Economic Committee held on August 17th clearly states the necessity to promote common prosperity in stages. Under this approach, authorities encourage some people to become prosperous first, then help others get rich later.

On Wednesday, Tencent also disclosed its second-quarter financial report, showing revenue of 138.3 billion yuan in the quarter, a year-on-year increase of 20%. Its net profits reached 42.59 billion yuan, a year-on-year increase of 29%.

SEE ALSO: Tencent’s Total Revenue in Q2 Reaches 273.6 Billion Yuan, A 23% Increase Year-on-Year