[Guangzhou Daily] Charity Orders Scare Away Entrepreneurs

Guangzhou Daily 2010-3-10 A5 NPC & CPPCC Topics

Writer: Xu Qian, Wang Fei, Li Dong

Xu Jiayin, the richest man in Mainland China, talks about charity instead of house price, and suggests tax increase on the rich.

After several days of silence, Xu Jiayin, a member of the CPPCC Committee and the richest man in Mainland China, finally speaks at the general assembly of the CPPCC Plenary. As the only representative of the business community, he speaks not about his main business real estate, but a sideline charity.

16 members speak at the 3^rd Plenary of the Third Session of the Eleventh CPPCC. Xu Jiayin, the chairman of the board of directors of Evergrande, is the 10^th member to speak. He is the only representative of Chinese enterprises as well as the only Cantonese CPPCC committee member. Same like the other members, Xu Jiayin has prepared his speech script in advance. But for the journalists who have been pursuing him for some opinions to no avail in the past few days, there is something unique in the speech of this real estate giant where there is no mentioning of the real estate at all but a long elaboration of the nation s charity development.

If charity is a well of a hundred meters deep, we have only drilled three to five meters up to now. Xu Jiayin said, there is a huge need for charity in our country with an annual number of more than 150 million in need for relief. However, the majority of enterprises are not involved with charity activities. Some of the charity pioneers among the enterprises encountered charity orders and pressure from relevant administration for charity. This has directly affected their enthusiasm for a second donation.

Later we came to the understanding that according to the data of the CPPCC committee members proposal, there are more than 10 million registered enterprises currently in China, among which less than 0.1 million enterprises have donation records, i.e., 99% of the enterprises has never made any donation.

Lacking of proper regulations effects credibility

The Chinese Charity Development Report shows that by the 1^st half of year 2009 enterprises in China have donated 5.457 billion yuan altogether, accounting for 60.3% of the total donated money and materials in China. But the donation is limited in the form of money while lacking other varieties which are popular in other countries such as the donation of capital, technology, product, equipment, knowledge, and skill. Only 11% of the donating enterprises have evaluated their donation.

The development of the charity cause needs guarantee and boost by relevant policies and regulations. Xu Jiayin said, at present the problems with the nation s charity development are incomplete policies and regulations with low operability, and lack of effective encouraging mechanism. There are inadequacy in the organization and rules and regulations of some charity institutes, which has affected the credibility of the cause and deterred the passion of participation of some enterprises.

After the Wenchuan earthquake, an enterprise distributed cash to the victims directly without going through any charity institute. This has made us review the whole matter.

Suggestions on tax preference for enterprises involving in charity

Xu Jiayin suggests that the Public Welfare Donation Law which is in implementation should further specify the qualifications and obligations of the donor and the recipient, and explicitly designate the supervising body for the donation activity so as to enhance the operability of this Law. On the other hand, he expresses the hope that the Charity Law could be passed and issued as soon as possible so as to clarify the nature, mission, and the basic principle of management and operation for the charity organizations.

Involvement in charity means you do not expect any profit but the idea of virtue is its own reward will certainly boost the enthusiasm for participation of the enterprises. Xu Jiayin believes it is time to set up a tax incentive mechanism and implement GSP for the charity cause. Any enterprise making donations to any legal charity organization shall be rewarded with tax preference so as to increase the total donation amount. For this, an easy-to-operate, quick, and convenient tax exemption procedure should be established.

What s interesting is, as the new top rich person in mainland, Xu Jiayin supports the idea that the country should increase tax on the rich. He suggests that the country may consider choosing the right time to levy inheritance tax and gift tax, and increase the tax rate on luxuries, thus guiding the entrepreneurs to put more funds into the social public welfare cause.

Voice of the CPPCC Committee Members

The richest man puts charity as his subsidiary business

The Company is listed in Hong Kong, Xu becomes the richest man in Mainland China, Lang Ping is invited to be the coach, Evergrande becomes the boss of Guangzhou Football Team explosive headlines about Evergrande Real Estate since last year has put Xu Jiayin, the boss, under the spotlight again and again. As a CPPCC member, he surely is the focus of media during the NPC & CPPCC sessions. But he refused to make any comment in front of the chasing of all media.

As a result, journalists from all media rushed to the Great Hall of the People when they got the news that Xu Jiayin would speak as the only entrepreneur representative on the CPPCC Plenary held yesterday. Why does he talk so much about charity but not a single word on real estate? Some of the journalists showed confusion. But for those who know Xu Jiayin, this isn t surprising at all.

In fact, as the richest man coming from Guangzhou, Xu Jiayin has been taken charity cause as one of his subsidiary businesses. Evergrande donated a whole of 30 million yuan last year during its Evergrande Ten Thousand People s Walk for Charity activity, benefiting more than 13,000 poverty-stricken people around the country. Xu Jiayin himself is the Honorary President of Guangdong Provincial Charity Federation and is rewarded as one of the Top Ten Philanthropists of China .