Niu Gensheng is at the forefront of China’s philanthropy new wave

When he was one month old, Niu Gensheng was worth 50 yuan. He knows, because that was the price he fetched in 1958 when his impoverished parents sold him to a more prosperous family in a neighbouring village in Inner Mongolia.

By the time he was 46, in 2004, Mr Niu’s circumstances and net worth had been transformed. That year he listed China Mengniu Dairy, the milk company he founded five years earlier, in Hong Kong. Virtually all his proceeds, hundreds of millions of dollars, he immediately put into the Lao Niu Foundation, which is based in Inner Mongolia and works to improve education and the environment in China and beyond.

Today, the adopted son of a rural family consorts with global philanthropists such as Bill Gates, former US Treasury Secretary Hank Paulson and Ray Dalio, the founder of hedge fund Bridgewater. But in 2004, Mr Niu’s act of giving away virtually all the proceeds of a listing was unheard of in China.

For generations accustomed to poverty, the charitable giving so common in the West was part of an alien culture. Even — or perhaps especially — his family was appalled to learn that he would put unknown beneficiaries before his own children.

Mr Niu is one of a generation of entrepreneurs who made their fortune in the commercial world, outside the government service and before digital technology created a cohort of internationalised billionaires.

But while his story underscores dramatic changes in China and for many of its people, it also raises questions about the new prosperity and those who pay the price for development — which often has disastrous side effects, such as polluted water from chemical dumping and the adulteration of food.

Mr Niu discovered the joys of charitable giving when he was young. “When I was in primary school, because my parents were considered bad elements (during the Cultural Revolution between 1966 and 1976), I was discriminated against and bullied,” he recalls. His adoptive mother had ties with the previous and reviled Kuomintang (KMT) government.

“As a way out, I began to share with my classmates some of the small sums of money my mother sometimes gave me. After a while, I became a child king. All the children followed me,” he says, speaking to the Financial Times in Hong Kong.

This explanation, it later transpires, is somewhat disingenuous. He admits the distribution of coins at school was more like paying protection money to secure immunity from persecution: The cash went both to his chief tormentor and to his principal teacher.

Critics argue that Mr Niu’s generosity today, and that of many Chinese philanthropists, is no different. Much Chinese “charitable giving” is also a form of protection money offered in the hope of immunity from unofficial pressure.

Early in his career, Mr Niu continued the practice of generosity as a business strategy. “I used half my salary to reward subordinates and to complement employees, dairy farmers and milk dealers. I also donated to a primary school,” he says.

Mr Niu’s foundation now has 4 billion yuan (S$814 million) to disburse.

“I made fun of the saying: ‘Wealth does not last three generations — the first generation starts the business, the second maintains it and the third destroys it’. I did all three in one generation. After 50 years, this is my time to make a contribution.”

Charitable donations are carefully thought out. Mr Niu says he wants to make the world a better place, but he also has to make sure that both the causes he embraces and the recipients of his generosity do not offend the government.

“Local economic development is not balanced, and medical, educational and other social resources are unevenly distributed,” he says. “At the time, the government and the market were too busy to take this into account. The government needed charity to play a complementary role to improve society.”

His foundation has supported education primarily for children under the age of seven, who in many remote areas are too young for government schools. And he has embarked on a project to plant 40 million trees in his home province of Inner Mongolia to help stem the intrusion of the desert.

Today’s charitable causes are noble, but Mengniu’s recent history is less so. The company was among those caught up in scandal when farmers supplying milk to the organisation added melamine, a toxic chemical, in 2008 and again in 2011.

Six infants were killed and thousands more fell ill. Mr Niu declines to comment, other than to note that such things happen in many markets and are a product of excessive greed.

Local journalists who have studied the incident blame lax government regulation for repeated problems with food safety.

The scandal has cast a long shadow: To this day, Hong Kong limits the amount of infant formula that Chinese travellers, worried about the safety of their domestic supplies, can carry when they return to the mainland.

Mengniu’s financial statements today allude to the continuing fallout, with descriptions of the technical means used to control quality and regain the confidence of consumers.

Meanwhile, although he has retained the title of honorary chairman at Mengniu, Mr Niu is immersed in what he calls the next stage of his philanthropy, taking his approach abroad.

He has worked with Mr Paulson on wetland conservation for migrating birds, and with the Rockefeller Foundation to send students to the United States to study.

“By the end of 2015, we cooperated with 142 domestic and foreign organisations,” he says.

As with so many Chinese born in the middle of the 20th-century’s upheavals, there is a dreamlike quality to the transformations in the life of Mr Niu, reminiscent of a Taoist parable — perhaps the one about Chuang Tzu who could not quite decide if he was a butterfly dreaming he was Chuang Tzu or the other way around.

“Money is a wondrous thing,” he says. “It can make people shed tears of gratitude and can make enemies. Everything depends on how it is used.” FINANCIAL TIMES