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China seeks its own Rockefeller

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A replica of the Eiffel Tower in Tianducheng, a luxury real estate development located in Hangzhou.AFP/Getty Images/AFP

China is now home to more billionaires than the United States, Beijing home to more ultra-wealthy than New York City. But the conspicuous reach of Chinese wealth extends much farther. As with previous waves of Middle Eastern oil sheiks or Russian oligarchs, rich Chinese entrepreneurs are engaging in iconic real estate acquisitions from London through Paris to Vancouver and, increasingly, in Boston. Their investment, triggered by China’s slowing growth rate, falling currency, and changing capital controls are transforming neighborhoods in cities around the world.

The amount of wealth created in China over the past two decades staggers the mind, as 1 percent of China's population now holds one-third of the nation's wealth. Yet China ranks 144 out of 145 countries in terms of giving, according to the UK-based Charities Aid Foundation's World Giving Index. What explains this striking philanthropic gap? What do the newly rich of China intend to do with their newfound wealth? What values do the super-wealthy bring along with their bank accounts? What norms and priorities do they support? Is there a sense of recognizable noblesse oblige, or less a focus on investing in one's local community? What else can be learned from Chinese investment abroad?

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Examining these paradoxes motivates a recently launched China Philanthropy Project at the Harvard Kennedy School's Ash Center. Our team mapped out the Asian giant's emerging philanthropists, what causes they care about, how they give, and where. China has a growing giving landscape, but it is far from mature and several patterns have emerged.

The first is that elite giving remains highly localized and focused on single causes. Six out of every 10 renminbi, or RMB (the current exchange rate is roughly 6.5 RMB to the dollar) from this group was donated in the same province where the donor's corporate headquarters is situated. China's poorest hinterlands, already struggling with limited local resources, fared quite poorly. Despite the fact that Xinjiang and Tibet, two of China's less developed provinces on the country's western frontier, are faced with considerable environmental, educational, welfare, cultural, health, and disaster relief needs, only 0.04 percent of 2015 giving by the top 100 donors identified went to Xinjiang. A mere 0.01 percent went to Tibet.

Moreover, nearly three-quarters of these donors gave to a single cause — and there was little diversity among those causes. As is the case with American elite donors, education received the most philanthropic dollars. Indeed, so much so that schools crowded out other needs, accounting for nearly two-thirds of all giving. In a country whose capital has frequent "red alerts" due to toxic air and where soil and water pollution is widespread, the environment earned less than 1 percent of gifts. Jack Ma, the billionaire founder of the e-commerce giant Alibaba, was the only philanthropist to give to four or more causes, including education, environment, social welfare, and disaster relief.

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Also of note is that the majority of donors identified continue to give directly through their corporations, a pattern reflecting the range of legal, regulatory, and political challenges facing the development of a vibrant giving environment on a national level. Although the Chinese tradition of philanthropy can be traced back more than two millennia, the country is searching for a more contemporary model of charitable giving. China's stunning economic growth was built on a series of reforms begun barely 30 years ago. Today's titans of industry were largely born after the 1949 Communist revolution — they have no Rockefellers or Fords of their own to emulate.

That is starting to change, however. Nearly a fifth of the top donors in 2015 have established their own foundations, and several have established track records for accountability and transparency. Like the tycoons of America's Gilded Age a century ago, emerging Chinese philanthropists are looking to their own traditions and those of the West. How they choose to lead will leave a mark that will last for generations.

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Edward Cunningham is the director of China programs at the Ash Center at Harvard's Kennedy School of Government.