Chinese tycoons snub Buffett and Gates

By Steven Jiang


BEIJING (CNN) -- In the world of business, who in their right mind would turn down the opportunity to dine with Bill Gates and Warren Buffett? Chinese tycoons, apparently.

State media has been abuzz over the story of a number of top Chinese entrepreneurs declining to join the two American industry titans-turned-philanthropists for dinner in Beijing later this month.

The alleged reason: Fear of being pressured to make huge donation commitments.

Gates, co-founder of Microsoft (MSFT, Fortune 500), and Buffett, who heads the Berkshire Hathaway (BRK.A) investment firm, are two of the world's richest men and have devoted most of their personal fortune to charitable causes. They recently persuaded 40 U.S. billionaires to pledge giving at least half their wealth to charity.

The China office of Bill and Melinda Gates Foundation remains tight-lipped about details of the Beijing event, telling CNN that Gates and Buffett will host "a private gathering to discuss philanthropy development" with their Chinese counterparts on Sept. 29.

Chen Guangbiao, a self-made multimillionaire and one of the few confirmed guests of the dinner, has published an open letter to the U.S. power duo to heed their call - by donating his entire fortune, an estimated $735 million, to charity upon his death.

"I don't want to become a slave to my wealth," Chen told CNN. "Every dollar I made was with the help of others -- so I want to give it back to society and make my life more meaningful and valuable."

China boasted 477,000 millionaires (in U.S. dollars) at the end of 2009, a 31% increase from the previous year and trailing only the United States, Japan and Germany, according to a report jointly released last June by consulting firm Capgemini and investment bank Merrill Lynch.

Wealthy Chinese seem unwilling to open their purse strings for charitable causes, however. In 2009, a government-sponsored honor roll listed 121 Chinese philanthropists who donated a combined $277 million, less than half of what a single family -- American financier Stanley Druckenmiller and his wife -- gave away in the same year in the United States.

Chen, 42, whose parents were poor farmers, now runs a booming renewable resources and recycling business in eastern Jiangsu Province. He said he donated most of the $60 million profit his company made in 2009 and wanted to see more of his peers do the same.

"I hope my action will influence and inspire more wealthy Chinese -- and also put a little pressure on them," he said.

Other types of pressure, however, may force China's super rich to continue to keep a low profile and conceal their wealth. Some fear unwanted scrutiny from corrupt local officials, while others blame the lack of transparency or favorable tax policies for their reluctance to follow Chen's path.

"I'd rather focus on charity work through my company's own foundation, by setting up educational projects in poor provinces and encouraging employees to volunteer their time and effort," Zhang Xin, another confirmed guest at the Gates-Buffett dinner, told CNN.

Zhang, 45, one of China's biggest real estate developers, sits on top of family holdings estimated to be worth more than $2 billion.

No matter the method, analysts say, the timing is good for Chinese tycoons to put their wealth back into society. The government recently revealed that China's Gini coefficient, a measure of income inequality, had been above the 0.4 benchmark since 2000, an alarming position shared by only a few other African and Latin American countries.

"With the gap between the rich and the poor becoming wider and wider, charity is an excellent and voluntary way to redistribute wealth," said Zhou Qing'an, a researcher with Tsinghua University in Beijing.

Chen, the multimillionaire philanthropist, echoes expert views that China's super rich lag behind their Western counterparts in charity donations because most Chinese have accumulated their wealth only recently - albeit at a much faster pace.

"Our country's economic reforms started 30 years ago and we became wealthy only some 10 years ago," Chen said.

"But I'll try to convince other invitees to join me at the Gates-Buffett dinner and not to miss out on being part of something good."

-- CNN's Helena Hong contributed to this report. To top of page

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