Hong Kong Government Suspected of Luring Mainland Billionaires to Transfer Money in the Guise of Charity

Lots of comments emerge questioning the likelihood of Hong Kong becoming an "International Center of Philanthropy." File picture. Sung Pi-lung/The Epoch Times

The Hong Kong Jockey Club announced at an International Charity Forum held in Hong Kong on Sept. 11 that it would allocate HK$5 billion (US$640 million) as an initial fund for the establishment of an “Institute of Philanthropy (IoP).” HKSAR Chief Executive John Lee Ka-chiu made it clear on the same occasion that he would promote policies to attract family offices and trust funds to Hong Kong. He also firmly believed that the institute would help promote Hong Kong to become an ”international center of philanthropy.” Comments abound questioning the government’s intention, in that while it is doing all it can to enforce stricter control over charities and dismantle civil society, it becomes highly skeptical that its real purpose is no more than just to attract mainland funds to Hong Kong.

According to the website of the Hong Kong Jockey Club (HKJC), the main purpose of the IoP is to “make it a dependable source of philanthropic knowledge and to leverage its resources to strengthen the professionalism of funders in various places (especially Hong Kong and other Greater Bay Area cities)” and “to provide sector-wide infrastructure and standards development for all stakeholders around the world.”

Funds Allocated to Establish the IoP Equals Its Total Annual Donations

The HKJC Charities Trust is one of the top ten charitable donors in the world. The HKJC website states that the average annual donations by the Trust in the past ten years have been around HK$5 billion (US$640 million), benefiting all walks of life. In 2022/23 alone, the Jockey Club’s total approved donations were HK$7.3 billion (US$933 million), funding a total of 247 charity and community projects.

In other words, the HK$5 billion the HKJC allocated this time to establish the IoP is almost on par with its average annual donation in the past ten years.

Current affairs commentator Chip Tsao made this analysis in his online program “Whirling Clouds Valley” on Sept. 12 that the Jockey Club has been doing charity for over 100 years and has a strict supervision and follow-up mechanism for funding. He believes that if the HK$5 billion is donated to study how to do charity, “If the HKJC has a say, it will never donate the money.” It is almost crystal clear that “there is someone cheating money in the process.” He said that the taboo of charity is to let people abuse money by creating posts and paid jobs under the name of administration works. He queried whether the HKJC was under any sort of political pressure in allocating the funds, and whether it would dispatch its people to supervise the use of the relevant funds.

Charity Groups Lose Their Autonomy and Come Under Political Control

In an interview with The Epoch Times on Sept. 13, social policy and public administration scholar Chung Kim-wah pointed out that in the governance structure and board of directors of some non-governmental organizations (NGOs) in Hong Kong, many of the members are appointed by the government. He believes that the current NGOs “have not much autonomy left.” They all become just “different branches of the Social Welfare Department,” and said that the government ”controls too much and too tightly” over the NGOs. As the government dominates more and more of the daily operation of charities and even becomes their main source of funding, charities have come under the government’s complete control.

He said that in recent years, following the government’s exercise of more political control, it has used every means to control voluntary organizations in their administration to achieve “full implementation of central governance.” “There are no real charity organization activities anymore,” coupled with the increasingly active participation of the local CCP’s Liaison Office, it is evident that it really wants to have a tight grip on the voluntary organizations politically, which is a replica of what the CCP has been practicing in mainland China.

Lots of Similar Institutes in Mainland China Have Close Ties with the CCP

Many educational institutions in mainland China have subordinates bearing similar titles, such as Tsinghua University’s “Institute for Philanthropy,” Shanghai Jiao Tong University’s “Institute for Philanthropy Development,” Beijing Normal University’s ”China Philanthropy Research Institute,” and Guangzhou Sun Yat-Sen University’s “China Philanthropy Research Institute.”

Take Tsinghua University’s Institute for Philanthropy as an example. It was commissioned by the Ministry of Civil Affairs and is “one of the policy theory research bases” of the latter, in addition to being “a high-end think tank” that embodies national strategies. Its goals are similar to those of the HKJC’s IoP, which states that it “promotes the cultivation of philanthropic talents, the effective use of technology, catalyzes and advocates philanthropic innovation, and effective communication and exchange on a global scale.”

The Institute for Philanthropy Development of Jiaotong University was rated as a “China core think tank” by the Chinese Academy of Social Sciences and is also the “National Social Organization Education and Training Base of the Ministry of Civil Affairs,” as well as the Shanghai “Civil Affairs and Charity Research Base” in the “14th Five-Year Plan.” Its introduction states that the institute has made policy recommendations on the revised Mainland China Charity Law, the Law on the Management of Domestic Activities of Overseas Non-Governmental Organizations, and Foundation Management Regulations.

HK’s Civil Society Is in Disarray, Charity Losing Its Volunteerism Spirit

Mr. Chung questioned how Hong Kong can find its way into the rank of being an “international center of charity,” during a current affairs commentary program on Sept. 12. He pointed out that in the past two or three years, due to the economic downturn and financial constraints, the government’s funding has become ”increasingly tight,” making the performance indicators pursued by the government in agreements with charitable organizations become less and less realistic, such as reporting on the number of people participating in activities and degree of satisfaction, among others.

On top of that, during recent years, civil society as a whole has declined dramatically. Some organizations have reduced their scale, and it has become increasingly difficult to find volunteers, which has also led to their poor mobilization capability. When citizens are no longer active in civil society, their sense of responsibility will also diminish, leading to a decline in donations.

Mr. Chung told The Epoch Times that the Hong Kong government’s welfare policy white paper in the 1970s mentioned that “VAs” (today’s “NGOs”) possess unique advantages, including being more flexible and able to develop experimental service plans. They have a sense of touch at the grassroots level that the government lacks and can therefore mobilize more effectively the spirit of voluntary work. Mr. Chung lamented that all the above-mentioned merits have all but disappeared under the current situation where NGOs have to meet government-assigned standards. He emphasized that philanthropy always starts from a society that is willing to support each other, and ultimately promotes a spirit of mutual responsibility among themselves. “Charity can never develop if it is initiated top down.”

Mr. Chung further analyzed that since there is no real charity in mainland China, there have never been extensive and effective charitable donations, and there will never be a true spirit of volunteerism. “Even organizations such as the Red Cross have become platforms for corruption,“ he added. Until today, there are no extensive independent charity networks in mainland China. ”The reason is that it is not able to build a civil society. Even if the government wants to encourage the establishment of various non-governmental organizations, it will ultimately be unsuccessful because they all have to be controlled by the Ministry of Civil Affairs. In the end, it goes nowhere, or even dies before it is born.”

Suspected of Trying to Lure Mainland Riches to Move Capital to HK to Protect Their Assets

On the other hand, some commentators believe that the initiative of the “International Center of Charity” is beckoning mainland wealthy people and attracting them to “move money” to Hong Kong.

Current affairs commentator Alex Pao Wai-chung analyzed in his online program “Whirling Clouds Valley” on Sept. 12 that Singapore has become a popular destination for the establishment of overseas family fund offices after the pandemic. He said that John Lee’s intention was more likely to brand the “International Center of Charity“ in the guise of “grabbing customers” for their huge funds to Hong Kong.

Mr. Pao pointed out that family foundations can be tax-free when operating as an ongoing charity organization in Hong Kong, and many concurrent expenses can be reimbursed. He also believes that John Lee is beckoning mainland rich people to “bring money to Hong Kong” by packaging it as charity. Mr. Lee hopes to attract wealthy mainland people by packaging their huge funds as an “international charity center

He quoted just one recent example. In July 2023, Country Garden, one of the protagonists of the current mainland housing crisis, donated 20 percent of its shares, valued at HK$6.4 billion (US$818 million), to one Guoqiang Public Welfare Foundation (Hong Kong) Limited established in June 2023 for charitable purposes. Most people considered it as amounting to an asset transfer. Mr. Pao believes that once Country Garden goes bankrupt in mainland China, the 20 percent mentioned above shares and related assets will remain unaffected.