COVID-19 and Chinese Philanthropy Abroad (Part 1)
This is the first part of a two-part series on Chinese philanthropists and their efforts abroad during the COVID-19 pandemic. While Part 1 focuses on overseas philanthropic actions by Chinese donors and their impact, part 2 examines implications for international philanthropy and development beyond the pandemic period.
Written by Liu He
The Newcomers?
Waiting at Cotonou Airport was Benin’s Minister of Health, Benjamin Hounpatin, greeting not a state visit by foreign leaders but medical supplies donated by the Jack Ma Foundation. The shipment contained 20,000 diagnostic kits, 100,000 masks, and 1,000 sets of protective suits, with additional deliveries scheduled for April. On the same day, Hounpatin’s counterpart in Senegal, Aboudulaye Diouf Sarr, attended a similar ceremony at the Chinese Embassy in Senegal to receive a donation of equal size from the Jack Ma Foundation, witnessed by the Chinese ambassador in the country.
As the pandemic rages on, Chinese philanthropists have expanded their efforts on the global stage. Jack Ma’s pledge to donate 6 million masks, 1.1 million diagnostic kits, 60,000 sets of protective suits, and 60,000 protective goggles to 54 African countries generated significant media attention. However, he is not the only Chinese philanthropist going abroad. The Tencent corporation launched a ¥100 million Global Anti-Pandemic Fund and donated $10 million to the World Health Organization (WHO) COVID-19 Solidarity Response Fund; the real estate conglomerate Evergrande Group set up a ¥100-million Evergrande International Anti-Pandemic Rescue Fund for international humanitarian efforts; the financial conglomerate Fosun International and Taikang Life Insurance co-created the ‘Global Aid Project’ which has completed shipping personal protective equipment (PPE) donations to Germany, South Korea, Japan, Iran and other countries seeking donations.
Such philanthropic activities overseas followed months of philanthropic support in China of efforts to counter COVID-19 at home. According to Yishan, a charity data-gathering site, a total of 44,529 companies donated ¥35 billion to fight COVID-19 domestically as of April 5th. There are 18 companies with a donation of ¥100 million or more. In Hubei alone where the epidemic was the most severe, charitable donations (¥11.5 billion) exceeded the provincial fiscal budget on COVID-19 disease control (¥10.9 billion) on February 17th, highlighting the substantial participation of the private sector donors in strengthening China’s COVID-19 response.
For most of the past century and a half, China had been a recipient — not a provider — of philanthropy abroad. However, as the world ramps up responses to mitigate COVID-19, a new group of philanthropists from China is emerging, often in partnership with others abroad, to establishing new models of charitable giving and potentially transforming the structure of global philanthropy.
This two-part blog contribution is about that future — the emergence of Chinese philanthropists abroad — and what it means for the COVID-19 pandemic and beyond. In a few months, the landscape of international philanthropy may have undergone a significant shift, with a heightened level of Chinese philanthropy abroad.
Donating masks — and a bit more
Four areas of philanthropic activities have particularly attracted the interest of Chinese philanthropists: medical aid, R&D for COVID-19 medical products, information-sharing with the international community, and direct cash donations.
Over 74% of fundraising activities across 20 online charity platforms in China targeted the supply of masks, protective suits, gloves, and other medical equipment for frontline healthcare workers
Medical aid
Domestically, medical aid — in the form of diagnostic kits and personal protective equipment (PPE) — is the most popular choice among Chinese donors for COVID-19 related giving. According to the Fundraising Center, a charity analysis company, over 74% of fundraising activities across 20 online charity platforms in China targeted the supply of masks, protective suits, gloves, and other medical equipment for frontline healthcare workers.
Going abroad, Chinese donors are now replicating their domestic strategy and delivering PPE and diagnostic kits to other countries in need. The CSR analytics company CSR Cloud reports that, as of March 30th, at least 61 Chinese companies have so far donated PPE, including over 22 million masks to 69 countries. The data include the direct donation of leading Chinese companies such as Alibaba, Oppo, and Fosun but fail to capture companies that donate abroad via third parties, most notably the 100-million CNY donation of the Evergrande Group to the Red Cross Society of China to fund its mission to donate PPEs and fight COVID-19 abroad. As China embarks on a province-to-country aid strategy, there has been a wave of smaller sized regional companies donating PPE to Low- and Middle-Income Countries (LMICS), though the overall data are still in the collection phase at this early stage. Nonetheless, total medical aid by Chinese companies overseas is likely to far exceed the level currently reported.
In April 2020, China has significantly boosted the manufacturing of PPE and diagnostic equipment. According to the State Council, daily production of masks has reached 100 million masks as of April 2nd, a 12-time increase since early February. On diagnostics, the current daily production is enough for 2.6 million tests. As the pandemic expands into more countries and the demand for PPEs expands, Chinese private actors have at least three distinct advantages in providing medical aid.
Firstly, many Chinese companies are in positions of financial strength. To illustrate with an example, the Chinese government donated 600,000 masks to Malaysia on March 28th, with the Chinese ambassador hosting a donation ceremony. Three days later, a shipment of 1 million masks arrived in Kuala Lumper donated by the Chinese food company Perfect Company. Similar examples of philanthropists’ out-donating’ the Chinese government are growing in the Philippines, Indonesia, Iran and elsewhere in the world.
Secondly, fighting COVID-19 domestically has given private donors first-hand experience in dealing with medical manufacturers. That translates into personal networks, a technical understanding of medical products, and price-bargaining leverage on the ground. The prices of PPE have inflated across the spectrum. An N95 mask cost ¥10 for wholesale in January and in April cost as much as ¥30 to ¥50 depending on the manufacturers and intermediaries. As parties around the world come to China for supplies, it is virtually impossible to arrange procurement without credible local help.
Thirdly, many Chinese companies already have an export infrastructure built up through a long history of international trade. Using Alibaba as an example, its subsidiaries Cainiao Logistics and the Electronic World Trade Platform (eWTP) are already engaged in international commerce. When the emergency related to COVID-19 emerged, the same infrastructure — consisting of logistical companies, foreign ports, local connections, and operational teams –quickly pivoted to delivering donated goods. This is especially important while flights and cargo ships are halted by COVID-19. With money, local connections, and logistical capacity, private actors in China are uniquely placed to bridge the global supply gap of PPEs and diagnostics.
R&D
Another area of focus for Chinese philanthropists in the COVID-19 response is R&D for COVID-19 medical products — in particular vaccine development. On February 7th, Tencent announced an additional ¥10 billion donation, which allocates ¥500 million for funding R&D activities and ¥15 million pledged to Tsinghua University Education Foundation for vaccine development. On February 10th, the Evergrande Group donated ¥100 million to the Chinese Academy of Medical Sciences to create a fund for COVID-19 drug innovation. Two days later, the Taikang Insurance Group gave ¥10 million to the State Key Laboratory of Virology of Wuhan University set up in the aftermath of SARS in 2004. These are but a few examples of philanthropic engagement on COVID-19 R&D. The Jack Ma Foundation is leading donations to international R&D efforts. On March 2nd, the foundation pledged A$3.2 million to the Peter Doherty Institute for Infection and Immunity in Australia to accelerate vaccine development for COVID-19.
Information-sharing
As China recovers from the peak of infections, there are lessons to share internationally so that each country need not start from scratch in COVID-19 response. Joining universities and public agencies that already host online webinars for the international audience, philanthropists too are taking part in expediting the global informational flow. The digital health platforms WeDoctor and Dingxiang Doctor both rolled out English versions last month, with Tencent open-sourcing the international module of its COVID-19 WeChat mini program for researchers abroad. The ‘Handbook of COVID-19 Prevention and Treatment’ compiled by the Jack Ma Foundation and Zhejiang University provides a practical guide on therapeutics and in-hospital management for healthcare workers around the world in 19 languages, published on the website of Global MediXchange for Combating COVID-19. Information-sharing is perhaps the most low-cost and high-impact forms of COVID-19 intervention. In equipping frontline workers with the practical know-how on COVID-19 response, private actors can create an impact more durable than medical goods themselves.
Cash donations
Finally, direct cash donations is another area of philanthropic activities currently being explored by Chinese philanthropists. On April 3rd, Tencent pledged to donate $10 million to the COVID-19 Solidarity Response Fund set up by the World Health Organization. There are also rumors that Bytedance is considering giving to Global Alliance on Vaccine Innovation (GAVI), an international organization focused on providing vaccines to LMICs. Breaking away from the trend of donating material goods, Tencent (and potentially Bytedance) is a rare example both of Chinese private donors delegating spending decisions to international trusted partners and directly funding international organizations to solve global problems. As international cooperation deepens between Chinese companies and multilateral organizations, we may expect to see more direct cash donations in crisis response and other fields of international development.
It is important not to overemphasize the impact of Chinese philanthropists… It is reasonable to estimate that commercial orders — not aid– take up the vast majority of medical export from China to the rest of the world
A sound of caution, with glimpses of hope
The sketch above invariably fails to fully capture the diverse and fast-moving activities by private donors from China in the global COVID-19 response. However, one thing is clear: Chinese philanthropists have been proactively engaging in international philanthropy. By doing so, they have helped fill a critical gap of medical supplies, R&D funding, knowledge, and cash to hundreds of countries around the world.
However, it is important not to overemphasize the impact of Chinese philanthropists. On medical aid, commercial demand for medical products is skyrocketing globally. According to data published by the State Council, the total export of COVID-19-related medical supplies in March reached ¥10.2 billion, in which there were 3.86 billion masks with a total value of ¥7.72 billion alone. At this stage, it is unclear how much export is accounted for by philanthropic donations. But given the high willingness to buy from international parties, it is reasonable to estimate that commercial orders — not aid– take up the vast majority of medical export from China to the rest of the world. Where markets operate, wealthy bidders with the resources and connections to suppliers tend to crowd out the less wealthy. Fortunately, donations by Chinese philanthropists hold the potential to alleviate this. News of Chinese companies donating to LMICs has been almost daily during the later stage of the pandemic. While the scale of private medical aid is unlikely to match the size of commercial orders, philanthropy nonetheless buffers LMICs against the global capitalistic distributive system for medical supplies during a dire time.
On R&D, the contribution of Chinese philanthropists is still in an early stage. So far in the international scientific effort against COVID-19, organizations such as the Coalition for Epidemic Preparedness (CEPI), GAVI and the newly established COVID-19 Therapeutics Accelerator have played leading roles in organizing the scientific community and supporting the development of vaccines and drugs for COVID-19. Behind the organizations stand a host of Western private companies and governments, with few Chinese philanthropists taking part. Bytedance was recently rumored to be interested in funding GAVI, though not on COVID-19-related R&D work but regular immunization programs for African countries. According to the Global Pandemic Monitoring Board, CEPI requires total funding of $2 billion to develop and manufacture vaccines for COVID-19; currently, only 30% of the requirement is met. Joining forces with international partners such as CEPI and COVID-19 Therapeutics Accelerator will allow Chinese philanthropists to engage with the global scientific community at the top level, helping them enter the top-tier global innovation ecosystem for COVID-19 while channeling crucial resources to the most internationally trusted parties.
In the other areas of activities, philanthropists have provided welcome responses. Information-sharing on COVID-19 response is crucial especially in the early days of a local outbreak, and it is a niche that philanthropists in China could uniquely fill in the short term. However, as more countries become infected and new disease control models tested, the amount of experience and evidence generated outside China has enriched the global knowledge pool for COVID-19 response, diluting the impact of Chinese philanthropists in this respect. And although Tencent pledged $10 million to the COVID-19 Solidarity Response Fund for WHO and is one of the major donors, the pledge accounts for only a small percentage of the total $150 million raised in donations.
The donations and impact of Chinese philanthropists on the ground are unlikely to match national governments and globally leading foundations. As private wealth accumulation happened only in the past 30 years since the Reform & Open-up in the 80s, modern philanthropy is only just emerging in China. Yet the newfound enthusiasm of Chinese private donors for global outreach and participation highlights both a critical shift in their giving approaches and a clue to what may be coming next in international philanthropy.
Any rising group of actors on the international stage generates both excitement and concern. How much will Chinese philanthropists actually contribute to solving global challenges? What are their motivations? How are their philanthropic activities related to the Chinese state? In the next blog entry, I will evaluate such questions and argue that the rise of Chinese philanthropists abroad and their influence is an important trend in global philanthropy — but will only succeed if they manage to strike partnerships and alliances with international partners. In that process, both the philanthropists and the global philanthropic system must work to create a welcoming, collaborative and open-minded environment that is conducive to cooperation, while also focusing on providing global goods for the global community.
The jigsaw of international coordination remains incomplete as long as private contributors from China — the world’s second-largest economy — remain missing. ‘Global challenges require a global response’ is trite, particularly during this pandemic. However, if there is anything we have learned from responding to COVID-19, it is that the world needs bridges that connect, not walls that separate. Even if China or the US manages to individually suppress all domestic COVID-19 cases, no country is safe until all countries are safe in the war on infectious diseases. Together, the world is stronger. The same applies to philanthropy too.
About the author
Liu He is based in Beijing and currently focuses his work on global health and philanthropy. He received a B.A. in Philosophy, Politics, and Economics from the University of Oxford and is an incoming Schwarzman Scholar at Tsinghua University. Liu has been closely involved with the scientific, governmental, and non-profit sectors relating to COVID-19 response in China and abroad, especially in philanthropic engagement and policy advocacy for public health emergency response. When he’s not working, you may find him shooting photos on the street, socializing with friends, and forever agonizing on getting a cat vs a dog.
