China's rich give back as philanthropy surges

By Susan Fenton

HONG KONG (Reuters) - Philanthropic donations in China are surging, as the country's nouveau riche expands with economic development, and should be boosted in the next few years by much-needed tax incentives, analysts say.

Donations from the top 50 publicly disclosed philanthropists in China have risen eight-fold in the past three years, totaling US$10.9 billion so far this year, according to investment bank

UBS AG (UBSN.VX: Quote, Profile, Research, Stock Buzz) (UBS.N: Quote, Profile, Research, Stock Buzz).

They are led by 85-year-old Yu Pengnian of Shenzhen-based trade and property group Pengnian Industries, who has donated US$260 million to health and higher education since 2003, according to the Beijing-based Hurun Report's league table.

Yu is followed by a younger crop of entrepreneurs headed by Zhu Mengyi of property developer Hopson Development (0754.HK: Quote, Profile, Research, Stock Buzz), with donations totaling US$140 million in the past four years, and Niu Gensheng of Inner Mongolian milk producer Mengniu Group who has given away US$85 million, according to the Hurun Report.

Education is the biggest beneficiary of philanthropy followed by social welfare causes, healthcare and poverty alleviation.

Donations to charity are restricted to fewer than 20 charities approved by the government, says UBS.

Individuals, meanwhile, can offset just 2 percent of their salary against tax for charitable and philanthropic donations, although the government plans to increase that to 12 percent as soon as next year.