As the biggest shareholder of Fuyao Class, Cao holds 1.08 billion shares, or a 70 percent stake in the company, China's biggest glassmaker.
His new foundation will fund education, medical care, poverty and disaster relief, and religious affairs.
The 63-year-old businessman, also the Entrepreneur of the Year 2008, had donated 20 million yuan to the quake-hit Sihcuan province in 2008.
He was also awarded one of the top ten Chinese philanthropists by the Ministry of Civil Affairs.
Cao founded Fuyao Glass in 1985, China's first domestic auto glassmaker, seeking to break the dominance of foreign imports in the market.
Now with a more than 50 percent share on the market, Fuyao is now China's biggest auto glassmaker. It supplies all top 10 carmakers operating in China, and is also a provider to household names such as Audi, Mercedes-Benz, Bentley and Daimler Chrysler.