Alibaba shares slide after $15 bn ‘prosperity’ pledge

Shares in Alibaba slumped on Friday upon the Chinese e-commerce giant’s announcement it would invest 100 billion yuan (€13.1 billion) in charitable causes, after President Xi Jinping called for the rich to do more to tackle inequality.

Xi last month urged China’s wealthiest companies and entrepreneurs to strengthen philanthropy efforts and “give back to society”, in order to redistribute wealth as part of his “common prosperity” initiative.

In response, Alibaba – which has already fallen foul of Beijing’s sharp scrutiny this year – said it would put money into areas including tech innovation, small and medium-sized businesses, the welfare of gig-economy workers and healthcare equality.

Daniel Zhang, Alibaba chairman, said the group was “eager to do our part to support the realisation of common prosperity”.

Shares in Alibaba slumped as much as four per cent on the news in Hong Kong trading on Friday, as traders worried about the potential impact on the company’s bottom line.

“The donation doesn’t guarantee that there will not be more regulations to target at Alibaba,” Castor Pang, head of research at Core Pacific Yamaichi International H.K. Ltd, told Bloomberg News. “It’s more or...