China’s southern boom town of Shenzhen is seen as the embodiment of late Chinese leader Deng Xiaoping’s exhortation to “let some people get rich first.” Now the city finds itself at the center of a heated debate about whether the country has taken Deng’s suggestion too far.

Late last week, not long after Chinese Communist Party leaders conceded the need for fairer economic development, some of China’s richest men were found on a list of people due to receive housing subsidies from the Shenzhen municipal government.

With many in China already frustrated over skyrocketing real estate prices, the news exploded across Chinese blogsites and newspapers, drawing harsh complaints from pundits and regular people alike.

Singled out as being among the most unworthy recipients of the subsidies was Internet entrepreneur Ma Huateng (aka Pony Ma), founder and CEO of Tencent Inc., which runs China’s most popular internet message and online gaming service QQ. With a fortune of 29.3 billion yuan, or roughly 4.4 billion dollars, Ma is China’s ninth richest man, according to Forbes. Yet Shenzhen government documents cited in local media reports (in Chinese) show he is entitled to 3100 yuan per month in taxpayer-funded housing subsidies over the next five years.

The housing subsidies are part of a stimulus program launched on June 30 last year by the Shenzhen government’s Land Resources and Real Estate Management Bureau. The program aims to attract “high-level professional talent” to the city by easing expensive housing costs. As of May this year, the program had awarded more than 32.4 million yuan of subsidies to a total of 1457 recipients, according to Chinese media.

The policy normally requires potential “talents” to apply for subsidies themselves, but it is unclear whether Ma did so. While some angry bloggers have accused Ma of rampant greed, the Shenzhen government has also come under fire. Some reports (in Chinese here and here ) suggested that Ma was chosen for the list without his knowledge, making him a scapegoat for sloppy policy implementation.

Other recipients of subsidies include Kingdee Software board chairman Xu Shaochun, telecommunication giant Huawei’s deputy director Jiang Zuoqian and ZTN deputy director Zhao Xianming, among other company executives.

In criticizing the subsidies, both newspapers and bloggers have cited the “Matthew effect”—a sociological term, based on the biblical verse Matthew 25:29 (“For to all those who have, more will be given, and they will have an abundance”) describing how the rich get richer while the poor get poorer.

A Tencent public relations spokesmen was quoted by Chinese media as saying the company “respects the Shenzhen government’s policy,” but declined to comment about Ma receiving benefits specifically.

Comment was offered, however, by China’s internet community.

“In primary school our textbooks and videos described times before the revolution, when the people had no means of livelihood, repressed by imperialism, feudalism and capitalism,” wrote one reader on the popular Sina web portal. “Then we got a new China, with the people in control. Yet after 61 years, it seems folk’s lives have gone back to the way they were before.”

“If I were that wealthy, there’s no way I would go to such effort for that little subsidy,” another user wrote.

Many have described the Ma subsidies as emblematic of an economic system unfairly tilted in favor of the advantaged. “Whether government spending should be given in the form of a prize to further bolster social elites, or as much needed support for general society, is a problem,” read an article in the Guangzhou Daily (in Chinese). “Those able to benefit from these policies don’t need them, and those unable to obtain them stand most in need.”

Subsidy schemes similar to Shenzhen’s exist in Guangdong and Hebei provinces, and in the southern cities of Fuzhou and Xiamen, according to a recent report in the Beijing Times. In Fuzhou’s Wucheng district, the report says, eligible “high-level talents” and “young specialists” who don’t yet own their own house may apply for special “talent discount” housing.

The subsidies issue was raised at a recent meeting of China’s legislature, the National People’s Congress, and resulted in a statement advising local governments to do a better job addressing housing issues. But some were skeptical about how sincerely the issue was being treated by lawmakers.

“Providing ‘advice’ is too tactful and passive, it sounds weak,” read a commentary (in Chinese) in yesterday’s Yangtze Evening News. “Local governments can accept advice from the National People’s Congress, or reject it, or temporarily feign compliance. The NPC must do more than provide ‘advice’ …they should more directly and clearly express demands.”

The uproar over preferential treatment for elites comes as leaders in Beijing are pushing a new five-year plan that calls for a switch to more balanced growth. ‘Uneven, unbalanced and unsustainable development’ and ‘wide income disparities’ were among the top reasons cited for the shift. Readjusting income distribution is “the strongest cry coming from the people,” Chinese premier Wen Jiabao said during an address at the Party meeting in mid-October at which the five-plan was formulated.

Some Chinese got rich first. Leaders in Beijing are hoping to make the rest of the country comfortable enough not to care. The question the Ma Huateng scandal raises is whether they can do that quickly enough.