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Last updated 8 May 2013
Update: In March 2013, China’s Civil Affairs Minister announced that his ministry would simplify registration while strengthening supervision of NGOs. Thus far, experts and activists welcomed the Minister's pledge, but also urged concrete action for real change.
Civil society and its accompanying legal framework have become considerably more complex in China in recent years. The range of nonprofit, philanthropic and other social organizations (hereafter, civil society organizations or CSOs) has expanded rapidly, as have their fields of activity, including their partnerships with the government and business sectors. CSOs of various kinds are moving gradually but steadily from the margins of society into the mainstream.
Management of the emerging civil society sector by Communist Party and state agencies remains restrictive but also is unable to keep up with the growth of CSOs. As Yu Keping, a well-known scholar who has written extensively on civil society, points out, the actual space for CSOs in China is much larger than the institutional space allowed by formal laws and regulations.
Many CSOs are managed in a considerably less intrusive way than others. These include a large number of organizations that provide social services or conduct other work that the state supports and that are not perceived as threats to the state. But advocacy, religious, critical and policy-oriented groups are often much more closely monitored by Party and state authorities. In some cases, organizations have been closed and civil society activists have been detained, tried and imprisoned for their peaceful activities.
The legal framework to manage this highly differentiated process of state control – in which some organizations are supported and facilitated and others are repressed – has its origins in China’s 1982 Constitution and in an array of regulatory documents promulgated and enacted since the late 1980s. These regulate the full range of legally-registered non-profits which the Chinese refer to generically as "social organizations" (shehui zuzhi, 社会组织) "Social organizations" are separated into three major categories: social organizations (shehui tuanti, 社会团体) which are the equivalent of membership associations and include many trade and professional associations; civil non-enterprise institutions (minban fei qiye danwei, 民办非企业) which are the equivalent of nonprofit service providers; and foundations (jijinhui, 基金会). China is a civil law jurisdiction with very strong political and executive authority; judicial activity plays very little role in the treatment of civil society groups.
In an effort to improve its regulatory capacity and in coordination with CSOs, the government has in recent years sought to revise the legal framework governing CSOs, fundraising and charitable donations, and worked with local governments to carry out experiments in these areas that will inform national legislation. It has also made improving "social management" a focal point of its 12th Five Year Plan (2011 - 2015). "Social management" here refers to the party-state's ability to manage and coordinate with a range of CSOs and other non-state actors in addressing the country's many pressing social problems. It calls for the state and CSOs to engage in a collaborative relationship to address common goals.
|Organizational Forms||Social organizations (shehui tuanti), civil non-enterprise institutions (minban fei qiye danwei), and foundations (jijinhui). The last category includes two types of foundations: public fundraising and non-public fundraising foundations.|
|Registration Body||Ministry of Civil Affairs|
|Barriers to Entry||
|Barriers to Activities||
|Barriers to Speech and/or Advocacy||The Government has discretion to limit speech and advocacy for specific organizations and types of organizations and for specific cases that might be seen to negatively impact national security.|
|Barriers to International Contact||Organizations are sometimes required to report international contacts to authorities and sometimes to seek approval for visits, international cooperation, foreign donations, etc. They are also discouraged from working with or receiving funding from overseas organizations which are engaged in "democracy promotion". These include the National Endowment for Democracy (NED), the Open Society Institute (OSI), and the International Republican Institute (IRI).|
|Barriers to Resources||There are restrictions on fundraising and networking. With the exception of public fundraising foundations, CSOs are not allowed to engage in public fundraising. CSO networks are also a sensitive issue. A number of networks have emerged in recent years but they are all informal in nature. Approval is also required for receipt of external resources. A 2009 regulation requires CSOs to go through more paperwork to transfer donations from oversees organizations into their bank accounts.|
|Population||1,336,718,015 (2011 est.)|
|Type of Government||Communist State|
|Life Expectancy at Birth||Male: 72.68 years
Female: 76.94 years (2011 est.)
|Literacy Rate||Male: 96%
Female: 88.5% (2008 census)
|Religious Groups||Daoist, Buddhist, Christian: 3%-4%; Muslim: 1% -2%; (official atheist) (2002 est.)|
|Ethnic Groups||Han Chinese: 91.5%; Zhuang, Manchu, Hui, Miao, Uyghur, Tujia, Mongol, Tibetan, Buyi, Dong, Yao, Korean, and other nationalities: 8.5%; (2000 census)|
|GDP per capita||$7,600 (2010 est.)|
Source: The World Factbook. Washington, DC: Central Intelligence Agency, 2009.
|Ranking Body||Rank||Ranking Scale
(best – worst possible)
|UN Human Development Index||101 (2011)||1 – 182|
|World Bank Rule of Law Index||44.5 (2010)||100 – 0|
|World Bank Voice & Accountability Index||5.2 (2010)||100 – 0|
|Transparency International||75 (2011)||1 – 180|
|Freedom House: Freedom in the World||Status: Not Free
Political Rights: 7
|Free/Partly Free/Not Free
1 – 7
1 – 7
|Foreign Policy: Failed States Index
||76 (2010)||177 – 1|
International and Regional Human Rights Agreements
|Key International Agreements||Ratification*||Year|
|International Covenant on Civil and Political Rights (ICCPR)||No||--|
|Optional Protocol to ICCPR (ICCPR-OP1)||No||--|
|International Covenant on Economic, Social, and Cultural Rights (ICESCR)||Yes||2001|
|Optional Protocol to ICESCR (OP-ICESCR)||No||--|
|International Convention on the Elimination of All Forms of Racial Discrimination (ICERD)||Yes||1981|
|Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW)||Yes||1980|
|Optional Protocol to the Convention on the Elimination of Discrimination Against Women||No||--|
|Convention on the Rights of the Child (CRC)||Yes||1992|
|International Convention on the Protection of the Rights of All Migrant Workers and Members of their Families (ICRMW)||No||--|
|Convention on the Rights of Persons with Disabilities (CRPD)||Yes||2008|
* Category includes ratification, accession, or succession to the treaty
The Constitution of the People’s Republic of China (1982, as amended) includes the following relevant provisions which relate to the nonprofit, charitable and philanthropic sector:
The People's Republic of China is a socialist state under the people's democratic dictatorship led by the working class and based on the alliance of workers and peasants.
The socialist system is the basic system of the People's Republic of China. Disruption of the socialist system by any organization or individual is prohibited.
All power in the People's Republic of China belongs to the people.
The National People's Congress and the local people's congresses at various levels are the organs through which the people exercise state power.
The people administer state affairs and manage economic, cultural and social affairs through various channels and in various ways in accordance with the law.
The People's Republic of China governs the country according to law and makes it a socialist country ruled by law.
The state upholds the uniformity and dignity of the socialist legal system.
No laws or administrative or local rules and regulations may contravene the Constitution.
All state organs, the armed forces, all political parties and public organizations and all enterprises and institutions must abide by the Constitution and the law. All acts in violation of the Constitution or the law must be investigated.
No organization or individual is privileged to be beyond the Constitution or the law.
The state maintains public order and suppresses treasonable and other criminal activities that endanger state security; it penalizes criminal activities that endanger public security and disrupt the socialist economy, as well as other criminal activities; and it punishes and reforms criminals.
All persons holding the nationality of the People's Republic of China are citizens of the People's Republic of China.
All citizens of the People's Republic of China are equal before the law.
The state respects and guarantees human rights.
Every citizen is entitled to the rights and at the same time must perform the duties prescribed by the Constitution and the law.
Citizens of the People's Republic of China enjoy freedom of speech, of the press, of assembly, of association, of procession and of demonstration.
Citizens of the People's Republic of China enjoy freedom of religious belief.
No state organ, public organization or individual may compel citizens to believe in, or not to believe in, any religion; nor may they discriminate against citizens who believe in, or do not believe in, any religion.
The state protects normal religious activities. No one may make use of religion to engage in activities that disrupt public order, impair the health of citizens or interfere with the educational system of the state.
Religious bodies and religious affairs are not subject to any foreign domination.
The People's Republic of China protects the legitimate rights and interests of Chinese nationals residing abroad and protects the lawful rights and interests of returned overseas Chinese and of the family members of Chinese nationals residing abroad.
Citizens of the People's Republic of China, in exercising their freedoms and rights, may not infringe upon the interests of the state, of society or of the collective, or upon the lawful freedoms and rights of other citizens.
It is the duty of citizens of the People's Republic of China to safeguard the unification of the country and the unity of all its ethnic groups.
Citizens of the People's Republic of China must abide by the Constitution and the law, keep state secrets, protect public property, observe labor discipline and public order and respect social ethics.
It is the duty of citizens of the People's Republic of China to safeguard the security, honor and interests of the motherland; they must not commit acts detrimental to the security, honor and interests of the motherland.
National Laws and Regulations Affecting Sector
Some of the key national laws and regulations affecting the sector are as follows. This list is by no means complete. For additional information, see Ministry of Civil Affairs and U.S. International Grantmaking.
- Constitution of the People’s Republic of China (1982, as amended, see selected provisions above)
- Law of the Red Cross Society of the People's Republic of China (adopted by the Standing Committee of the National People's Congress, October 31, 1993)
- Regulations on the Registration and Management of Social Organizations (adopted by the State Council October 25, 1998, currently in revision)
- Interim Regulations on the Registration and Administration of Civil Non-Enterprise Institutions (adopted by the State Council October 25, 1998)
- Interim Regulations on the Registration and Administration of Public Institutions (adopted by the State Council October 25, 1998)
- Public Welfare Donations Law (adopted by the Standing Committee of the National People’s Congress June 28, 1999)
- Law of the People's Republic of China on Individual Income Tax and Detailed Rules for the Implementation of the Individual Income Tax Law of the People's Republic of China (as enacted in 1999 and later amended)
- Provisional Measures Regarding the Management of Social Welfare Organizations (issued by the Ministry of Civil Affairs, April 10, 2000)
- Trust Law of People’s Republic of China (adopted by the Standing Committee of the Ninth National People's Congress April 28, 2001)
- Non-State Education Promotion Law of the People’s Republic of China (adopted by the Standing Committee of the Ninth National People's Congress December 28, 2002)
- Circular of the Ministry of Finance on the Relevant Issues Concerning the Preferential Taxation Policies for the Poverty-Relief and Charity Donation Materials Imported for the Purpose of School Education. (issued by the Ministry of Finance, March 10, 2003)
- Regulations on the Management of Foundations (adopted by the State Council March 8, 2004, currently in revision)
- Regulations on the Administration of Names of Foundations (issued by the Ministry of Civil Affairs June 23, 2004)
- Accounting System for Nonprofit Organizations (issued by the Ministry of Finance September 2004)
- Reply of the State Administration of Taxation on Tax Exemption of 33 Permanent Representative Offices of Foreign Enterprises, such as the Beijing Representative Office of the Ford Foundation (issued by the State Administration of Taxation June 11, 2004)
- Measures for the Information Disclosure of Foundations and Measures for Annual Inspection of Foundations (issued by the Ministry of Civil Affairs January 12, 2006)
- Enterprise Income Tax Law of the People’s Republic of China; Provisional Regulations of the People's Republic of China on Enterprise Income Tax and Detailed Rules for the Implementation of the Provisional Regulations of the People’s Republic of China on Enterprise Income Tax (as enacted in 2007 and as amended)
- Notice of the Ministry of Finance and the State Administration of Taxation on the Policies and Relevant Management Issues Concerning the Pre-Tax Deduction of Public Welfare Relief Donations (promulgated January 18, 2007)
- Measures for the Administration of Donations for Disaster Relief (issued April 28, 2008)
- Notice of the State Administration of Foreign Exchange on Issues concerning the Administration of Foreign Exchange Donated to or by Domestic Institutions (issued by the State Administration of Foreign Exchange December 25, 2009)
Pending NGO Legislative / Regulatory Initiatives
Key pending legislative and regulatory initiatives at the national level include:
- Drafting and debate over of a national Charity Law that has been under discussion for a number of years;
- Revision of the Regulations on the Registration and Management of Social Organizations (originally promulgated in 1998);
- Revision of the Interim Regulations on the Registration and Administration of Civil Non-Enterprise Institutions (originally promulgated in 1998)
- Revision of the Regulations on the Management of Foundations (originally promulgated in 2004);
- Further detailing the framework for nonprofit tax status and deductions; and
- Other legislative and regulatory initiatives, mostly under the aegis of the Ministry of Civil Affairs and the national tax authorities.
Over the last few years, there have been important local policy experiments in the Chinese nonprofit and philanthropic sector, mostly at the provincial level. These policy experiments are important because they provide the central authorities with policy ideas and experiences that play a role in shaping national-level legislation. They therefore serve as harbingers of changes in national-level legislation. In July 2009, for example, the key regulator of charitable and philanthropic organizations, the Ministry of Civil Affairs, announced a Cooperative Agreement on Advancing Integrated Reforms in Civil Affairs with the municipal government of Shenzhen, a major economic area in the southern province of Guangdong and China’s original special economic zone.
Under the Cooperative Agreement, Shenzhen will serve as an “experimental site” for reforms in a wide range of civil affairs for assessment by the Ministry of Civil Affairs and other government agencies. Shenzhen is the largest Special Economic Zone in China and located in the southern province of Guangdong which borders Hong Kong. Shenzhen's reforms include new steps in the registration and management of social organizations, including allowing certain categories of social organizations to register directly with the Shenzhen Civil Affairs Bureau without the sponsorship of a professional supervisory agency (normally a government agency). Under the old "dual management" system, social organizations were required to find a supervisory agency as a sponsor before they were allowed to register.
Such steps mark the first real potential reforms in the “dual management” structure of Chinese social organizations in several decades. The Cooperative Agreement also allows Shenzhen to take over regulatory jurisdiction over domestic and foreign foundations based in Shenzhen; reform and expand government contracting with social organizations to provide social services; develop new measures to encourage charitable giving (including potential new tax incentives at the local level); and reforms in other areas of civil affairs. Activities under the Cooperative Agreement will be carried out from 2009 to 2015 and continuously assessed by the Ministry of Civil Affairs and other government agencies for potential expansion in other areas of China. 
Direct local regulation of social organizations and foundations in addition to national regulation is also starting in other areas of China. Until recently, local civil affairs and other governmental units merely implemented national regulations on social organizations, foundations and other groups without the power to directly regulate at the local level. The power to directly regulate at the local level is, of course, a key step in giving provincial and local authorities real legal authority over the nonprofit sector.
Over the last few years, a few provinces and province-level municipalities have followed Shenzhen's lead and with the blessing of the Ministry of Civil Affair, begun issuing e-formal regulations and other legal documents governing the various forms of charitable and nonprofit groups that are based in or active in their jurisdictions. Jiangsu and Hunan provinces, for example, have issued local-level regulations governing foundations and fundraising. Guangdong, Shanghai, Beijing, Chengdu and other provinces and cities are carrying out their own local legislative experiments governing the registration and management of different categories of social organizations.
Jiangsu led the way in the provincial regulation of philanthropy in October 2007 with the first sub-national regulations on foundations, the Jiangsu Province Interim Regulations on the Supervision and Management of Local Foundations, which have been implemented by provincial measures for approving, inspecting and requiring annual reports from foundations in addition to the national rules on these matters. In an even more important local experiment that is being assessed at the national level (like the Shenzhen measures that are being undertaken under the 2009 Cooperative Agreement) the Jiangsu provincial people’s congress adopted what may be the first provincial regulations on charitable organizations in January 2010. Under the Jiangsu Provincial Regulations on the Advancement of Charitable Activities, Jiangsu is now expected to adopt a range of rules and measures to regulate, encourage and manage its rapidly growing charitable sector. 
 Chinese text of the Cooperative Agreement.
 Chinese text of the Jiangsu regulations on foundations
 Chinese text of the Jiangsu regulations on charity
Yunnan has also been experimenting with regulations governing the registration and management of international NGOs in the province. Over the last two decades, Yunnan has become a popular destination for international NGOs and provincial authorities have for the most part welcomed them because of their contribution to the local economy. But the province’s attitude has changed in recent years as they face the challenge of managing a growing number of international and domestic nonprofits that are not registered with Civil Affairs. In December of 2009, the province issued the first-ever regulations in China specifically governing international NGOs. This development deserves scrutiny because it may serve as a model for future national regulations governing international NGOs. The Yunnan Province Interim Regulations Standardizing International NGO Activities provides international NGOs with a way of gaining legal status in the province through a registration process known as bei’an ors depositing their file on record with the provincial Civil Affairs Department. Interviews with NGOs in Yunnan indicate that the regulations are being welcomed by international NGOs which have been operating in China for years without legal status. At the same time, the regulations are also requiring international NGOs to submit to much more paperwork and control and discouraging some partnerships between international and Chinese nonprofits. As part of the registration process, international NGOs are required to report and get approval for every project they operate in the province and for every partnership they engage in with Chinese nonprofits.
Of all the local experiments, Guangdong province’s have been the boldest and garnered the most attention because of its size and importance in the national economy. In November of 2011, the Guangdong Civil Affairs director announced that the province would be making it easier for several different categories of social organizations (social services, charitable organizations, etc.) to register by doing away with the professional supervising agency requirement. The province would also decentralize the authority to register social organizations to the township and subdistrict levels of government, open up the space for trade associations by allowing more than one association per sector, and encourage more government purchasing of services provided by social organizations. If implemented, the Guangdong regulations would be the most liberal in the country, and serve as a bellwether for similar changes in the national regulations governing social organizations.
Guangdong’s reforms have been actively promoted by the province’s top leader, party secretary Wang Yang, who is a member of the Politburo, and mentioned as a candidate for the Politburo Standing Committee – China’s most powerful decision-making body - when it changes its leadership in the fall of 2012. Wang Yang is generally seen as a more liberal-minded leader due in part to his public position in support of nonprofits.
The Minister of Civil Affairs, Li Liguo, recently was quoted endorsing the Guangdong reforms raising expectations that the more Guangdong model will be used as the blueprint for revisions to the national-level regulations governing registration and management of social organizations. In addition, other news out of Guangdong shows that the reforms are expanding and making their way down to the local level. Recently, Guangdong announced it would also relax restrictions on fundraising for nonprofits, and interviews with Guangdong NGOs and academics indicate that Guangdong will also be issuing more favorable regulations governing the tax deductibility of charitable donations.
The Fate of the Charity Law and Other National-level Legislation
While local legislation has been making significant headway, national-level legislation appears to be on hold. The long-awaited revisions to the regulations governing the registration and management of social organizations, and the Charity Law, have both been delayed, despite rumors that their passage is imminent. The Charity Law, in particular, received a boost in 2011 due to a series of scandals that enveloped the charitable foundation sector. One example was the Guo Meimei incident that implicated the Chinese Red Cross and exemplified the lack of transparency and accountability in China’s philanthropy sector. These scandals raised awareness among both government leaders and society of the pressing need for a Charity Law to regulate philanthropy and fundraising.
Late in 2011, it was announced that the Charity Law was been included on the legislative plan for the 11th National People’s Congress (NPC) Standing Committee for 2011. The reports note that the NPC generally agrees with the content of the Ministry of Civil Affairs draft legislation and asks the State Council Legal Affairs Office (the State Council is the highest executive body in the Chinese government) to review the legislation and submit it to the NPC for consideration. Given that the Charity Law was also included on the 2010 legislative plan, and has been with the State Council for some time, it is difficult to know whether this announcement represents any significant progress in the Charity Law’s passage. Certainly, the significantly increased public scrutiny and discussion over this last year of problems and scandals in the philanthropic sector has placed more pressure on lawmakers to get the Charity Law approved. But given the legislative logjam in the State Council, it is difficult to know when the Charity Law will be reviewed and sent to the NPC for approval.
The Guangdong and Yunnan Experiments in 2012
In early 2012, Guangdong province was still in the news as the trailblazer in reforming the registration and management system for nonprofits. In January, provincial authorities announced that by July 2012, they would eliminate what has been the main obstacle to nonprofit registration: the requirement to find a professional supervisory unit that would sponsor the nonprofit. They also announced a series of other measures that made Guangdong the most open province with regard to nonprofit registration and management. This push for a more open environment for nonprofits has been credited to Guangdong's top leader - provincial party secretary Wang Yang who is also a member of China's Politburo and possibly may enter the Politburo Standing Committee - Yang has come out publicly to state his support for nonprofits and criticize local bureaucrats for not making it easier for nonprofits to register.
Since then, the Minister of Civil Affairs has come out endorsing the Guangdong reforms, raising expectations that the long-awaited national-level revisions to the nonprofit registration and management regulations would incorporate the Guangdong measures.
These recent developments that can be seen as a continuation of the CCP's emphasis on "innovative social management" in the 12th Five Year Plan (2011-2015) issued last year. Innovative social management refers to the government carrying out innovations in the way it regulates or manages society and societal organizations (China's term for nonprofits).
With regard to the government's regulation of social organizations, two distinct trends can be observed. One involves lowering barriers to social organization registration and fundraising. The other involves standardizing management of social organizations.
We can see the first trend in the local-level experiments in Guangdong and other localities that will allow a social organization to directly register with Civil Affairs without first finding a professional supervising unit (generally a government agency or parastatal organization authorized to serve as a supervising unit) willing to sponsor it. Recently, the city of Guangzhou (the provincial capital of Guangdong) announced it was also going to be removing restrictions on fundraising for social organizations. For most of China, other than the Red Cross and public fundraising foundations, social organizations in general are not allowed to fundraise publicly. The Guangzhou announcement is consistent with what scholars in Guangdong have told me about more planned reforms in line with relaxing restrictions over fundraising and strengthening the tax-exempt status for social organizations. Together with the registration issue, the issues of fundraising and tax-exempt status pose some of the biggest obstacles for China's social organizations. The Guangzhou announcement shows that Guangdong is clearly taking the lead in lowering barriers for social organizations.
Other localities appear to be following Guangdong's lead. Recently, Shanghai announced it would be carrying out similar experiments with registration this year.
The second trend of standardizing the management system can be seen in Yunnan province's efforts to standardize management of international NGOs, and the recent information disclosure guidelines issued by the Ministry of Civil Affairs for charitable donations. This standardizing trend is often justified in the name of strengthening and professionalizing the nonprofit sector, but it can also be interpreted as an effort to strengthen government control over social organizations.
Two recent announcements fall into this category. One issued by Beijing Municipality's Civil Affairs bureau is to establish a human resource system for social organizations. The bureau hopes that this move will help to raise the salaries of social organization staff and promote the professionalization of the nonprofit sector.
The other is a notice issued by the Ministry of Finance and Ministry of Civil Affairs which calls for major charitable projects to be audited after their completion, and the results of the audit made public. The Notice applies to major projects undertaken by foundations, representative offices of foreign foundations and public welfare social organizations that qualify for tax-exempt charitable donations.
We should expect both of these trends to continue in the coming months and years, as the government at both central and local levels wrestles with how to better manage social organizations. One area to watch is whether the second trend will raise more barriers to social organization activity, in the name of standardization, and thereby counteract the first trend which seeks to lower the barriers.
In February and March 2012, there was more news of reforms lowering barriers to social organization activity in other regions and sectors. An Opinion was issued by national-level agencies allowing religious organizations for the first time to establish foundations, social service organizations, and nonprofit hospitals. Yunnan province also announced it would follow the lead of Guangdong and other provinces and cities that are experimenting with a system that would allow social organizations to register directly with Civil Affairs without needing approval from a professional supervising unit. Professional supervising units would be renamed professional guidance units under this new system, although it is unclear exactly what this means in practice.
At the same time, another news item shows how far China has to go in improving the regulatory environment for social organizations. This article is about Wang Ming, the director of the Tsinghua NGO Research Center and a member of the China People's Political Consultative Conference (CPPCC), proposing a motion at the CPPCC's annual meeting to carry out more favorable tax policies for non-public fundraising foundations and social organizations, and to promote more government contracting to grassroots social organizations. He mentions that the Beijing government had allocated 100 million yuan to purchase services from social organizations for 2010, but because many grassroots organizations did not meet the qualifications for contracting, only about 50 million was disbursed. The article also mentions a related story in the news recently: the continued difficulties that Beijing Huiling, a long-standing grassroots organization serving youth with disabilities, is having getting registered as a social organization in Beijing. Together, these stories illustrate that policy reforms by themselves are insufficient. Those policies have to be carried out and enforced in ways that actually benefit China's many grassroots organizations, and allow more resources to flow to them.
For summaries of all articles, see China Development Brief's A View from the Top
Two other news items that are not directly related to social organizations should be mentioned. One is the news coming out from the National People's Congress' (NPC) annual meeting held in early March that the Criminal Procedure Law will be amended. The earlier amendment was controversial because it allowed police to detain, arrest or hold suspects for surveillance without informing their families. At this NPC session, that amendment was revised to remove the clauses permitting arrest or surveillance of suspects without informing family members. Police must now inform the suspect's family within 24 hours after arrest or surveillance. But police will still be allowed to detain suspects without informing family members. The amendment also clarifies that confessions extorted through illegal means such as torture should be excluded from evidence during a trial.
The other news has to do with the removal of Bo Xilai as Party Secretary of Chongqing Municipality in late March. Aside from the implications this has for China's leadership transition in the fall, Bo's removal also calls into questtion the Chongqing model which has gottn so much play in the media. More relevant for our purposes, the fall of the Chongqing model should strengthen support for the Guangdong model championed by Wang Yang, the Guangdong Party Secretary who was seen as a rivel of Bo's in getting a seat in China's Politburo Standing Committee. As noted above, an important part of the Guangdong model is a more liberal approach to regulating social organizations.
Several news articles during this period offer a more sobering assessment of developments in the nonprofit sector, or the “charitable” or “public welfare” sector as it is commonly referred to in the Chinese press and official documents. These articles highlight an effort by the Chinese government to cultivate and promote social organizations that are “safe” and enjoy close ties with the government.
One example is a recent initiative by the Beijing Civil Affairs Bureau asking civil servants to gradually withdraw from the charitable, public welfare organizations to ensure the voluntary and social nature of these organizations. A number of civil servants currently work in GONGOs that operate in the charitable sector, and would gradually withdraw from these organizations through different measures though no specifics are given. This initiative can be seen as an effort by the government to cultivate “safe” charitable organizations that look like NGOs or nonprofits, yet retain close ties with the government.
Another example comes from an article about a meeting at Tsinghua University attended by two officials heading the NGO Management office within the Ministry of Civil Affairs. The officials are not optimistic about new national regulations for registration and management of NGOs that have been expected to be issued for some time, and proposed another tack by calling both for direct registration of NGOs and establishing party groups within NGOs. Their unstated hope, it seems, is that the latter measure, which has been attempted before without much success, would help to comfort conservative interests that fear losing control over NGOs.
A third example comes from a 2011 document issued by the Central Committee and State Council that calls attention to the government’s effort to encourage public institutions to join the public welfare sector as social actors. Public institutions are part of the “system”. While they lack the coercive power of government agencies, they do receive financial support from the government budget and their staff enjoy administrative rank and privileges in varying degrees. This document shows that public institutions are now being encouraged to compete as quasi NGO-like organizations in an increasingly crowded public welfare sector with GONGOs and grassroots NGOs.
Taken together, these three examples, along with the recent push to promote approved social work agencies that can bid on government contracts, show that the government is making a concerted effort to cultivate a class of coopted social organizations that appear on the surface to be voluntary and independent, yet in reality enjoy close ties with the government.
For summaries of all these news articles, see China Development Brief's A View from the Top
April/May 2012: The Ministry of Civil Affairs and Guangdong Move Forward
This month saw both the Ministry of Civil Affairs (MOCA) and the trailblazing province of Guangdong moving ahead with new initiatives.
At the national level, the Ministry of Civil Affairs (MOCA) continues to look for ways to promote reforms in the public interest sector. In April, the Ministry of Civil Affairs issued a draft of supplementary regulations entitled “Some Regulations Concerning the Standardization of Foundation Behavior” for public comment. In the public comment period, a number of foundation leaders and scholars praised the regulations for clarifying how foundations should receive and use donations, allowable methods for increasing the value of foundation assets, and information disclosure standards. But they were also critical of certain clauses in the regulations. One was the clause that restricted foundations from giving to for-profit organizations. It was pointed out that many nonprofit organizations in China are registered as businesses. Another was the clause specifying that foundation staff salaries and office administrative costs be kept under 10 percent of foundation expenditures, which was cited as being overly restrictive and preventing foundations from attracting qualified, professional staff.
According to the Minister of Civil Affairs, Li Liguo, these supplementary regulations are meant to clarify existing regulations and documents such as the information disclosure guidelines issued by MOCA in December of 2011, and the 2006 Measures for the Information Disclosure of Foundations. They can be seen as another effort by MOCA to respond to the recent media stories and public criticism over various scandals and problems in the charitable sector by taking faster action in promoting greater openness and transparency in the sector. These initiatives should also be seen in the backdrop of the 12th Five Year Plan which calls on government agencies to undertake “social management innovations” to better harness the power of social organizations. Minister’s Li’s recent comment on May 8 about giving political and human rights NGOs equal treatment can also be seen as part of MOCA’s public campaigning. In other words, his comment was more rhetorical than substantive and was met with skepticism from those in the NGO community.
In Guangdong, the provincial capital of Guangzhou announced potentially pathbreaking fundraising regulations that will go into effect on May 1 of this year. Under the new regulations, social organizations (社会团体), civil non-enterprise units (民办非企业) and nonprofit public institutions (事业单位) will be able to fundraise publicly. The first two categories are legal NGOs registered with Civil Affairs. Special mention was made of organizations supporting the elderly, disabled, solitary and poor individuals, and disaster relief. These regulations will have the effect of breaking the monopoly that GONGOs, in particular public fundraising foundations, have had on public fundraising in China.
The Guangzhou Civil Affairs bureau sees this regulation as a major step in promoting a more open public welfare system rocked by scandals that hit GONGOs last year. According to local authorities, the idea is to create more market competition between public interest organizations.
Some caveats apply. The principle of territoriality applies to these regulations. Specifically, the Guangzhou regulation only applies to organizations registered in Guangzhou and limits fundraising to Guangzhou municipality. Authorities also revealed that a similar regulation for Guangdong province is forthcoming.
In terms of process, the Guangzhou fundraising regulations specify that the organization will have to submit a fundraising proposal and if approved, will have a three month period in which to fundraise for a project. If the organization needs a longer period of time, an extension can be applied for.
June 2012: Two Steps Forward, One Step Back?
This month saw more policy changes emanating from the provincial governments in Beijing and Guangdong as the central and local governments adopt various partial measures in the absence of more up-to-date, comprehensive, national laws and regulations. The latter would include the Charity Law, and the revised regulations governing the management and registration of social organizations and foundations, which have been held up for years. In June, the Beijing Civil Affairs Department announced its “Measures for Managing Seminars, Forums and Activities Organized by Social Organizations.” According to the Measures, organizations must not pose as “social organizations” to organize seminars and forums, or charge fees. Legal social organizations should also report to their professional supervising units the content, goals, size and scope, place, time, source of funding, etc. of seminars and forums they intend to organize. At the end of May, the Guangdong government issued “Provisional Measures for Government Procurement of Services from Social Organizations” to encourage social organizations to bid for government projects to provide social services.
Whether these local policy changes will really benefit the more grassroots, independent social organizations such as NGOs, however, is still an open question. There are small signs of progress. For example, Guangzhou reported that 24 social organizations have already been able to take advantage of the new registration policy that went into effect on May 1, and register directly with the city’s Civil Affairs Bureau. Guangzhou also reported that four social organizations have taken advantage of the city’s new fundraising regulations that also went into effect on May 1, and have applied and received permission to engage in public fundraising for their projects.
But many NGOs are still waiting on the sidelines, raising a number of questions and concerns about the new policies. In the report on Guangzhou’s new fundraising regulations, it was noted that many grassroots NGOs may not be able to meet the fundraising requirements, let alone the registration requirements. Similarly, the reports on government procurement of services from social organizations in Guangdong cautioned against being too optimistic. They asked whether grassroots NGOs will be able to compete on a level playing field with GONGOs, when government departments are the ones deciding the bids and evaluating the projects. Moreover, for grassroots NGOs to be able to compete, they will need help from supporting organizations that can help these NGOs build capacity in order to meet the government requirements. One social activist suggested setting up a unified procurement system in which government departments are not directly involved in the bids, and that the government entrust a few foundations to manage bidding to smaller NGOs, and open bidding to both registered and unregistered NGOs.
There is also a concern that the emphasis of these policies will be more on “social management” and less on serving and supporting social organizations. One article in the People’s Daily, the Communist Party’s flagship paper, drove this point home when it argued that making it easier for social organizations to register does not mean the government should relax its supervision over these organizations. One example of this position might be found in the Beijing Civil Affairs Department’s “Measures for Managing Seminars, Forums and Activities Organized by Social Organizations” mentioned earlier.
Two other developments in the labor sector in Guangdong bear watching. One is the closing of Zhang Zhiru’s labor NGO, Dagongzhe. It’s still unclear at this point why the NGO was closed and whether it will be allowed to re-open. It is also unclear whether this is part of a general crackdown on labor NGOs, or as appears more likely, only an isolated instance.
The other news coming out in mid-May is the creation of a Federation of Social Service Organizations for Guangdong Workers under the Guangdong All-China Federation of Trade Unions (ACFTU). The idea seems to be to use Party-controlled “mass organizations” such as the ACFTU to create a legitimate platform for labor NGOs to provide services to workers. (This has been tried in Beijing but with little success.) In turn, the ACFTU will have a hand in supporting and supervising these NGOs. It may be an intermediate step for labor NGOs to gain legal registration, but can also be seen as a way for the state to coopt labor NGOs.
In other related developments this month that may affect the civil society sector, the State Council Information Office issued its second human rights plan -- Human Rights Action Plan (2012-2015) -- that emphasizes the following rights:
- Right to Know, which includes promoting disclosure of unclassified government information.
- Civil Rights – more safeguards for detention and torture, including forbidding the use of extortion and other illegal means to gain confessions and other information.
- Environmental rights – strengthening heavy metal and water pollution prevention and controls, and monitoring air quality, including PM2.5 particulate matter.
- Rights to expression – strengthening the petitioning and complaints system, and the rights of journalists and media organizations.
- Rights to fair trial – strengthening procedures and review for death penalty cases, and for gathering evidence.
- Right to social security – focusing on housing security, raising the minimum wage, expanding health coverage to urban residents.
July 2012: More Local Initiatives
July saw more news coming from Guangdong, Nanjing and Beijing, all having to do with different local approaches aimed at lowering the barriers to registration for NGOs (or “social organizations” using the Chinese terminology.) In Guangdong, questions were raised about the implementation of a new regulation aimed at allowing social organizations to register directly given recent developments in the labor sector.
One new development is the crackdown on several labor NGOs registered as businesses, such as Zhang Zhiru’s labor NGO, Chunfeng Labor Dispute Services Agency. In some cases, this crackdown has taken the form of the landlord telling the NGO the lease is up. In more blatant cases, such as the Shidai Women’s Labor Agency, local government agencies came to inspect the NGO and informed them they would have to close.
The other development mentioned is the creation of a Federation of Social Service Organizations for Guangdong Workers under the Guangdong All-China Federation of Trade Unions (ACFTU). The idea here seems to be to use Party-controlled “mass organizations” such as the ACFTU to create a legitimate platform for labor NGOs to provide services to workers. This arrangement is described as an intermediate step for labor NGOs to gain some form of legal recognition (in Chinese, the term used is bei’an or document filing system) that may eventually help them legally register.
Labor NGOs in China have generally been seen as sensitive, which has caused observers to question whether they would be treated the same way as less sensitive NGOs and be allowed to register directly under the new Guangdong regulations. These new developments suggest that local authorities may be trying to push labor NGOs into a more regulated, supervised space.
In Nanjing, the city’s Civil Affairs Department announced it would lower the registration requirements for social organizations, such as lowering the registered capital requirement from 30,000 yuan to 5,000 yuan. In addition, the Nanjing City Civil Affairs Department will devolve the authority to register and manage three categories of social organizations (charitable, social welfare and social service) to the district/county level.
Beijing will explore ways to lower the registration threshold for social organizations by carrying out a document filing system (bei’an) which will allow grassroots organizations to file with designated “hub” (shuniu) social organizations. Since 2009, 27 “hub” organizations were approved for various sectors such as labor, youth, women, and law. For example, the All China Federation of Trade Unions would be the hub organization for labor, the All China Youth Federation would be the hub for youth, and so on. The idea is to have these “hub” organizations essentially serve as the “professional supervising units” for grassroots organizations, thereby making it easier for the latter to register at a later date. In reality, this experiment has been difficult to implement because “hub” organizations do not necessarily want to take on this additional responsibility, and because of coordination difficulties between these “hubs” and Civil Affairs offices.
August 2012: More Incremental Measures
Various incremental measures appeared in August to clarify and regulate different aspects of NGO and foundation work. As with previous initiatives in 2012, most of these measures can be seen as stopgap measures carried out in the absence of more fundamental reforms that have been put on hold with delays in the Charity Law and the revision of the various measures for the registration and management of social organizations.
In mid-July, the Guangdong provincial government issued the “Provisional Measures on Government Procurement of Social Organization Services,” clarifying the scope, procedures, and funding arrangements for government procurement of social organization services. The main sectors covered by these Provisional Measures are education, sanitation, culture, community affairs, care for the elderly and disabled, industry accreditation and auditing, scientific research, law, and policy research. An important issue will be finding an independent third party institution that can evaluate the social organization’s performance without interference from the government.
At the end of July, the Ministry of Civil Affairs issued “Selected Regulations Standardizing the Behavior of Foundations (Trial)” (hereafter “Selected Regulations”) to standardize the behavior of foundations in the following areas: receiving and using donations; transactions, cooperation and increasing the value of foundation assets; and public disclosure of information.
The Selected Regulations contain revisions based on public comments solicited from an earlier draft. One clause that attracted comments was the one that stated that “foundations should not fund for-profit organizations.” Since many of the more grassroots NGOs are registered as businesses, some observers felt that clause would prohibit foundations from funding these “business-registered” NGOs. In response to this concern, that clause was changed to read “foundations must not fund activities with a for-profit goal.”
In early August, the State Council issued “Views on the Promotion of the Work and Development of the Red Cross Society.” This document is clearly a response to the scandals that took place in the Red Cross last year and can be seen as an effort to strengthen accountability and transparency in the Red Cross. It calls for centralizing the Red Cross so that local Red Cross offices are more closely tied to the higher level Red Cross office, rather than to the local governments, in terms of supervision and guidance. It also talks about the importance of strengthening transparency, and details plans for the Red Cross to build a new online platform to track donations.
September 2012: Grassroots NGOs Have a Long Way to Go
The news coming out this last month illustrates just how much the playing field is stacked against grassroots NGOs, even as reforms are carried out at the local level that in theory will make life easier for them by lowering barriers to registration and expanding government contracting to NGOs.
The Special Economic Zone of Shenzhen provides a perfect test case. Shenzhen has some of the most liberal regulations in the country regarding NGO registration, and according to one newspaper account, more than 700 of the more than 5,000 registered NGOs in Shenzhen have registered under these more relaxed rules.
Yet the ongoing suppression of some labor groups in Shenzhen has people wondering just how welcoming Shenzhen is to NGOs. The suppression is not a simple across-the-board suppression aimed at all labor NGOs: some labor groups in Shenzhen and the province of Guangdong have been affected, while others have managed to not only avoid the suppression but register as well. The success of some labor NGOs in gaining legal status suggests that professionalization and government relations are two strategies that might help these groups avoid getting closed. Still, the actions taken against some of the labor NGOs serves to highlight the difficulties faced by grassroots NGOs in China.
The discriminatory treatment accorded grassroots NGOs is also borne out by other news accounts. One is about two well-known grassroots environmental NGOs – Friends of Nature and the Chongqing Green Volunteer League – which are carrying out a chromium pollution lawsuit in Yunnan. In a public letter, they call attention to a problem in the Civil Procedure Law which contains an overly narrow definition of plaintiffs authorized to initiate a public interest lawsuit. That definition excludes a category of legally-registered NGO to which many grassroots NGOs belong. The public letter calls on the Civil Procedure Law to be revised to expand the range of plaintiffs to include a wider range of NGOs.
Another story tells how Foshan, a city in Guangdong province, is expanding government contracting to NGOs, but so far only 57 “social organizations” (shetuan) have qualified for government contracts. These 57 social organizations are almost all trade associations and GONGOs. No public interest, grassroots NGOs qualified, in part because of lack of information.
One final story that illustrates the uphill struggle of grassroots NGOs is the travails of the Narada Foundation, one of China’s best known, private foundations. (Narada might not even be considered grassroots because of its size and capacity but, like other grassroots NGOs, it originated from outside the government system.) Narada had started a New Citizen School initiative to invest in schools for migrant children in Beijing, but one of their schools was ordered to close down by the Chaoyang District education authorities without explanation. Narada is currently considering legal action to recover compensation for its investment in renovating the school.
October 2012: More of the Same
At the national level, the Ministry of Civil Affairs continues to draft more detailed supplementary regulations. This month, the Ministry issued a draft of the “Measure for Recording Volunteer Services” for public comment. The draft requires volunteer organizations, public benefit-type organizations, and social service organizations to have a system in place to supervise their volunteers.
At the local level, the southern city of Shenzhen issued a draft of some long-awaited charity regulations for public comment. These regulations are seen as pathbreaking because they include important clauses addressing three of the major obstacles facing social organizations: registration, fundraising and taxation. In addition, they would allow foreign NGOs and individuals to register charitable organizations, something that would be a first in China.
November 2012: Supporting and Micromanaging China’s NGOs – Having It Both Ways?
In the run-up to the 18th Party Congress which opened November 8 and ended November 15 with the announcement of China’s new leadership core, the news falls into two categories of policy trends.
The first of these trends involves policies that are more supportive of social organizations, the official term in China for nonprofits or NGOs. These policies come in different forms. One is the continuation of reforms at the local level to make registration easier for social organizations. This month, much of the news has been about reforms in the wealthy eastern province of Zhejiang, such as the cities of Ningbo and Wenzhou. Another policy involves local governments, in places like Guangdong and Sichuan, setting up special funds to support and incubate social organizations and contract services to social organizations. More localities are financing these special funds using public welfare lottery money. Some environmental NGOs, however, have found that the funds used for purchasing services from social organizations are not sufficient to carry out their projects.
The second trend involves policies seeking to regulate and manage the social organization sector. Both the Ministry of Civil Affairs and local Civil Affairs bureaus are providing ratings to registered social organizations, although it is not clear what goes into creating these ratings. With a 3A-level rating or above from the Ministry, a social organization may receive awards, and is given priority for government contracting. With a 4A-level rating or above, an organization can undergo a simplified process for its yearly inspection. An organization’s rating is valid for a three-year period and is based on a 1000 point rating system.
In addition, the Party has been making efforts to become involved in managing social organizations. The Social Affairs Committee is a newly formed agency under the local Party Committee responsible for social affairs, which includes the development of social organizations. Efforts to establish Party branches and groups within social organizations are ongoing. This trend would mean that both the government and the Party would be involved in supervising social organizations.
It is not clear how the government and Party would coordinate their specific roles and responsibilities, but the involvement of both Party and government bureaucracies in managing social organizations is disturbing. It runs counter to the first trend of supporting social organizations and making it easier for them to operate. Perhaps the Party and government see their efforts to manage social organizations as a good faith, paternalistic gesture to provide guidance and support. But they could also be interpreted as micromanagement, and an attempt to exercise stricter supervision over social organizations. As one article in the People’s Daily, the Communist Party’s mouthpiece, makes clear, “loosening restrictions” over social organizations does not mean authorities should “become lax or complacent.”
Micromanagement not withstanding, some observers have been optimistic about the future for social organizations after the 18th Party Congress. Professor Wang Ming, director of Tsinghua University’s NGO Research Center and one of the leading authorities on China’s NGOs, is bullish on the future for social organizations, noting that the 18th Party Congress continued the same strong support for social organizations expressed at the 17th Party Congress in 2007.
December 2012 – A New Dawn After the 18th Party Congress?
After the 18th Party Congress, Xi Jinping and Li Keqiang, who have been anointed to become the new president and premier respectively (they will assume these positions after the next National People’s Congress in March of 2013), made a number of public appearances that gave observers some optimism that the new leadership will be supportive of reforms strengthening China’s civil society, but this, of course, remains uncertain.
Xi made a trip to the freewheeling southern province of Guangdong to promote the reforms being carried out there. He also spoke on the 30th anniversary of the 1982 revision to the Constitution, calling for officials to do more to protect citizen rights, including human rights, and promote public confidence in the law. "We must firmly establish, throughout society, the authority of the Constitution and the law and allow the overwhelming masses to fully believe in the law," he said. In a separate meeting with HIV/AIDS activists, Li Keqiang called for the government to provide more support, specifically in terms of registration and funding, to grassroots NGOs engaged in combating HIV/AIDS.
Two other developments caught the media’s eye that deserve attention. One is the government’s effort to build a foundation for government contracting to NGOs, and the other is an effort at the local level to create a “hub” system to better support and manage NGOs. The first effort is important because it heralds a new era of state-NGO collaboration, albeit on the state’s terms, and offers cash-strapped NGOs a new source of funding. The second is significant because it represents an effort by the local party-state to bring NGOs under their big tent.
Government contracting to NGOs will receive a big boost with the historic decision by the central government to set up a RMB 200 million (USD 32 million) fund in 2013 to purchase social services from social organizations. In line with this announcement, the Ministry of Civil Affairs has issued a “2013 Project Implementation Plan for the Government Financial Support of Social Organizations' Participation in Social Services,” and the Ministry of Civil Affairs and the Ministry of Finance have jointly issued a set of guidelines about how this fund will be used.
In another development, the Guangdong provincial government, following in the footsteps of an earlier experiment in Beijing, is also putting in place a “hub” system that seeks to use “people’s organizations,” which enjoy close ties to the party-state, as a vehicle for supporting and managing NGOs.
There are three legal forms of CSOs in China:
- Social Organizations (SOs) (shehui zuzhi, 社会组织)
- Civil Non-enterprise Institutions (CNIs) (minban fei qiye danwei, 民办非企业)
- Foundations (jijinhui, 基金会)
In addition to these legal forms, there are also CSOs registered as for-profit businesses, and unregistered CSOs. Some unregistered CSOs gain legal status by attaching themselves to another legal entity, such as a Social Organization (shehui tuanti) or a Public Institution (shiye danwei) (including, for example, a university or research institute). Neither CSOs registered as businesses nor unregistered CSOs are considered to be CSOs in a legal sense, but they are voluntary, non-governmental, non-profit, self-governing organizations in an operational sense. They are mission-driven, nonprofit organizations founded by and governed by private individuals. Many are funded by foreign governments and embassies, international organizations and foundations, and are required to justify the non-profit nature of their activities in their reports to funders.
Together, these three legal forms of CSOs, along with the informal CSOs, are the closest equivalent to what we understand to be non-governmental, non-profit organizations. A substantial portion of the legal CSOs – in particular, Social Organizations and Foundations – were either created by the government or have close ties with a particular government agency, and are often referred to as government-organized NGOs (GONGOs). In contrast, the informal CSOs generally are more independent.
The key registration body for most organizational forms in China is the Ministry of Civil Affairs. In certain cases CSOs may also register and operate as for-profit businesses, and those do so through the State Administration for Industry and Commerce.
Public Benefit Status
Chinese law distinguishes between nonprofits that have a public benefit purpose and those that serve other purposes. The Public Welfare Donations Law confers public benefit status on two categories of organizations: “public benefit social organizations” and “public benefit nonprofit institutions.” CSOs with public benefit status are eligible for tax exemption, but they are also subject to stricter government supervision [Public Benefit Donations Law, Chapters 3-5].
According to Article 10 of the Public Welfare Donations Law, “public benefit social organizations” are legally established foundations, charitable organizations, and other social organizations founded to promote public benefit undertakings. Article 3 lists which activities qualify as “public benefit undertakings" :
- Disaster relief, poverty alleviation, assistance to the handicapped, and assistance to social organizations in needy circumstances;
- Education, scientific, cultural, public health, and athletic undertakings;
- Environmental protection and construction of public facilities; and
- Other public benefit undertakings promoting social development and progress.
“Public benefit nonprofit institutions” are legally established educational institutions, scientific research institutions, health institutions, cultural institutions, public sports institutions, social welfare institutions and others that carry out public benefit undertakings and are not-for-profit.
It appears that all foundations, some social organizations, and most public institutions have public benefit status. CNIs can also obtain public benefit status and accept donations under the Public Welfare Donations Law.
However, informal non-profits that are registered as businesses or unregistered are not eligible for tax exemption even though operationally, they are nonprofit and have a public benefit purpose. Some of China’s best-known independent, public benefit CSOs fall into this category.
Barriers to Entry
There are extensive barriers to entry based in policy, practice, and regulation. Registration procedures are complex and cumbersome, with extensive documentation and approval requirements. Organizations are required to operate under a system of “dual management” in which they must generally first obtain the sponsorship of a “professional leading agency” such as a government ministry or provincial government agency, then seek registration and approval from the Ministry of Civil Affairs in Beijing or a local civil affairs bureau, and remain under the dual control of both agencies throughout their organizational life. In practice, it is not easy to obtain such sponsorship, particularly if a social organization lacks good connections in the government or is operating in sensitive sectors such as advocacy, legal aid, labor, religion and ethnic minority affairs.
Broad prohibition clauses bar the registration of groups that are perceived to oppose the state and/or Party. For example, the Regulations on the Registration and Management of Social Organizations (1999) prohibit registration of organizations that fail any part of this test: “Social organisations must observe the constitution, state laws, regulations and state policy; must not oppose the basic principles of the constitution, harm the unity, security or ethnic harmony of the state, or interests of the state and society, or the lawful interests of other organisations or citizens, or offend social morality.” Other broad provisions give the state wide discretion over which organizations are allowed to register.
The “dual management” requirements and broad prohibition clauses apply to all types of organizations, including social organizations, foundations, and other groups. But the barriers to entry do not end there. For example, the Regulations on the Registration and Management of Social Organizations (1999), the governing document for the largest subsector of Chinese nonprofits, also stipulate that applicant organizations must comply with a wide range of other requirements and undergo a lengthy application and approval process. Such applicants must have at least fifty individual members or thirty institutional members; a fixed location; staff with qualifications appropriate to the professional activities of the organisation; minimum assets of 100,000 RMB (currently US$9,500) for national organizations and 30,000 RMB ($2,800) for local organizations; and must supply the registration and management agency with a wide array of organizational documents. Government agencies may rely on a wide array of reasons to deny registration. Furthermore, the Regulations on the Registration and Management of Social Organizations (1999) and the Interim Regulations on the Registration and Administration of Civil Non-Enterprise Institutions (1998) both stipulate that SOs and CNIs cannot establish branch organizations or offices in other regions. SOs and CNIs get around this provision by registering their branch office as a separate organization.
After registration, organizations may seek approval in a separate process for an official seal and to open a bank account. Separate permissions must be sought from the relevant government management agencies to establish a branch or subsidiary of the group; to modify their registration or to amend their charter; to change their legal representative, and for other purposes. The government is provided with broad discretionary authority to close social organizations.
In the face of the “dual management” system, the difficulties in negotiating registration and approval, onerous reporting requirements and the opportunity for frequent government intrusion into organizational matters, many Chinese social organizations of various kinds either register as a for-profit business, or operate without formal registration. According to the Interim Measures for Banning Illegal Non-Governmental Organizations, these informal nonprofits are formally illegal, making them even more subject to state discretion and control.
 Regulations on the Registration and Management of Social Organizations (1999), Art. 4
 Regulations on the Registration and Management of Social Organizations (1999)
Barriers to Operational Activity
Barriers to operational activities can be raised or lowered by the authorities at their discretion, depending in large part on how their activities are viewed by the party-state. Generally, nonprofits engaged in social services and philanthropy tend to be viewed more favorably than nonprofits engaged in advocacy and legal aid. For some forms of organizations, such as social organizations or civil non-enterprise organizations, the government has authority under relevant regulations to bar the establishment of more than one such organization in its field in any particular locality as a way to prevent what is viewed as duplication, overlap, and competition and to maintain ties between such groups and their governmental sponsors. 
The government may also intervene in the appointment of directors, trustees or senior staff; narrow the boundaries of the work that organizations may engage in by reference to the government-approved original organizational application or charter; govern the banking arrangements of various kinds of charitable groups in detailed ways; undertake investigations of operational activities and terminate organizational activities through application of tax laws; and undertake other restrictions on operational activities. Even for registered organizations that have no issues with the state, reporting requirements can be quite burdensome, particularly for small organizations. The regulatory framework allows for significant government intervention and interference. Strong security forces, such as the Ministry of Public Security and other groups, intensively monitor organizations of particular sensitivity for the Party and state.
In 2009 and 2010, a number of methods have been used to restrict and control the operational activities of certain nonprofit groups. For example, the Open Constitution Initiative (Gongmeng), a Beijing-based public interest law research and advocacy group, was placed under tax investigation arising from a donation from an American organization, several of its core personnel detained, and eventually closed as a result of the alleged violations of tax regulations.
 See, e.g., the Regulations on the Registration and Management of Social Organizations (1999), Art. 13(2).
Barriers to Speech / Advocacy
A gap between constitutional freedoms for speech and assembly and the more restrictive provisions of special regulations and legal frameworks provides the state with significant discretion to limit speech and advocacy for specific organizations and types of organizations. The government can also prohibit advocacy, and actions such as lawsuits, in cases that it deems harmful to national security.
Such barriers are implemented through administrative decrees (such as the regulations governing social organizations and other kinds of groups), as well as criminal and administrative regulation and barriers to participation in policy debate and formulation that may favor government-affiliated groups or may restrict policy advocacy by defining it as outside the organization’s ambit of approval or its charter. Direct barriers to organizational activity, such as those discussed above, may also restrict speech and advocacy.
Barriers to International Contact
There appear to be relatively few barriers to international contact in the regulatory framework for particular kinds of organizations, such as the regulations governing social organizations (shehui tuanti), foundations (jijinhui), civil non-enterprise institutions (minban fei qiye danwei), and quasi-governmental public institutions (shiye danwei).
However, particularly at the provincial and sub-provincial levels, organizations of all kinds are often required to report international contacts to authorities and, in some cases, to seek approval for certain kinds of visits, international cooperation, foreign donations, and other contact with foreign organizations or donors. They are also discouraged from working with or receiving funding from overseas organizations which are engaged in “democracy promotion”. These include the National Endowment for Democracy (NED), the Open Society Institute (OSI), and the International Republican Institute (IRI).
Multiple written or unwritten rules can affect international contacts, and they may emerge relatively suddenly.
Barriers to Resources
In general terms Chinese organizations seeking external resources (such as foundation grants, direct gifts, and other resources) must obtain approval from their appropriate regulatory agency (such as a bureau of civil affairs at the provincial level) for such transactions. Organizations may also need approval to establish bank accounts in some cases. The laws and regulations governing the key forms of nonprofit and social organizations do not address issues of foreign funding in detail but other law and regulation makes such resource mobilization generally subject to state approval.
In early 2010, for example, the PRC State Administration of Foreign Exchange issued a formal notice, Notice 63 on Issues Concerning the Administration of Foreign Exchange Donated to or by Domestic Institutions that requires many domestic nonprofit organizations to comply with new and more complex rules for receiving and using foreign donations. These include, for certain kinds of organizations, an application attesting to the authority of the domestic organization and the foreign donor; the domestic group’s business license; a notarized donation agreement between the domestic group and the foreign donor organization with the purpose of the donation prescribed; and a registration certificate for the foreign nonprofit group. The Notice spurred significant concern in both domestic NGO and foreign nonprofit circles and its implications are still being worked out. Many nonprofits have been able to continue accessing foreign funds, but some organizations have experienced difficulties especially in cases where funding is coming from foreign organizations, such as the National Endowment for Democracy, the Open Society Institute, and the International Republican Institute, that are perceived as sensitive because of their “democracy promotion” work. 
 English text of Notice 63, Chinese text of Notice 63.
There is as yet no detailed domestic fundraising regulation, but generally speaking public fundraising, which is understood to mean fundraising through the media, in public spaces and online, is restricted to a small number of organizations. These include government agencies, such as the Ministry of Civil Affairs, officially designated organizations such as the Chinese Red Cross and China Charity Federation, and one type of foundation. The 2004 Regulations on the Management of Foundations creates two categories of foundations: public fundraising foundations and non-public fundraising foundations (hereafter referred to as “public” and “private” foundations respectively). Only public foundations have the authority to engage in public fundraising. Private foundations are funded by a major gift from a company or family, and can accept donations through private channels, but cannot engage in public fundraising. Other nonprofits, such as SOs or CNIs, are also not allowed to engage in public fundraising.
Provisions in the draft Charity Law (not yet enacted as of February 2012) would provide some general regulation of domestic fundraising. There is some concern in China about several important fundraising issues, including the regulatory and tax treatment of gifts of domestic stock for nonprofit and philanthropic purposes, and the business activities of nonprofits or their for-profit subsidiaries. A series of scandals in 2011 in some prominent public fundraising foundations, such as the Chinese Red Cross and the Soong Ching Ling Foundation, have made public problems with the lack of transparency and accountability in the philanthropic sector, and the need for improved regulations governing this sector. These issues have not, for the most part, been fully worked out in the Chinese regulatory framework.
|UN Universal Periodic Review Reports||Universal Periodic Review: China|
|Reports of UN Special Rapporteurs||China|
|USIG (United States International Grantmaking) Country Notes||USIG: China|
|U.S. State Department||2011 Country Reports on Human Rights Practices: China
Advancing Freedom and Democracy Reports, 2009: China
|Failed States Index Reports||Foreign Policy: Failed States Index 2012|
|IMF Country Reports||China and the IMF|
|International Commission of Jurists||Not available|
|International Center for Not-for-Profit Law Online Library||China|
News of importance to the nonprofit sector will be updated on a continual basis in China Development Brief’s column, A View from the Top. See also, China Development Brief Directory of 250 Chinese NGOs and accompanying report.
While we aim to maintain information that is as current as possible, we realize that situations can rapidly change. If you are aware of any additional information or inaccuracies on this page, please keep us informed; write to ICNL at email@example.com.
The changing face of service society (May 2013)
The face of China's civil society has undergone a dramatic makeover in recent years, none more so than in the way its organizations are funded. Less than 20 years ago, China's voluntary sector was wholly reliant on overseas donors. Seed funding from US organizations such as the Ford Foundation kick-started the development of China's voluntary sector after the United Nations' Fourth World Conference on Women, held in Beijing in 1995. Foreign funding enabled the establishment of more-or-less autonomous citizen groups in China designed to alleviate poverty, strengthen rights of women and disabled people, and protect the environment. While "government-organized non-governmental organizations" have existed in China since the early 1980s, it was money from overseas that drove the growth of grassroots organizations throughout the 1990s.
'Spring' in the air for NGOs? (April 2013)
China has about 470,000 registered civil society organizations - associations of nongovernmental groups that provide services to the public - but the NGO research institute at Tsinghua University estimates that a further 3 million remain unregistered. Last month's National People's Congress, the most important annual event in the country's political calendar, brought some welcome news. Four types of NGO - industrial associations, charities, community services and organizations dedicated to the promotion of technology - will soon be allowed to register directly and without the need to find a government backer. NGOs have greeted the news with cautious optimism, but they admit to concerns about the implementation of the new policy and the limited scope of direct registration.
Government's NGO funding peaks in 2012 (February 2013)
In 2012, the Chinese central government for the first time allocated 200 million yuan (32.08 million U.S. dollars) to finance non-governmental organizations (NGOs). With this funding 377 social work projects and more than 120 training programs were carried out, with 17,700 people trained and 1.85 million directly benefitting, according to the country's NGOs administration under the Ministry of Civil Affairs.
NGOs praised for role in fighting HIV/AIDS (November 2012)
The Chinese government has pledged to spend more in combating HIV/AIDS, while promising to give greater support to non-government organizations (NGOs) in this field. Vice Premier Li Keqiang on Monday presided over a plenary meeting of the State Council commission on the prevention and treatment of HIV/AIDS, according to an official press release.
State to tighten oversight of international NGOs (September 2012)
By amending existing law, China will set clear rules for international NGOs to register on the mainland and will strengthen supervision of their activities. Li Liguo, Minister of Civil Affairs, made the announcement at a news conference in Beijing. "The Chinese government recognizes the contributions of international NGOs in China's economic and social development and praises their contributions in fields like culture, education, health and poverty alleviation," Li said.
Activist and artist Ai Weiwei loses appeal on tax evasion charges (September 2012)
Ai Weiwei has been battling tax evasion charges brought by the Beijing tax bureau against his artistic company, Fake Cultural Development Ltd., for over a year. The outspoken artist, blogger, filmmaker, and architect was on his way to Hong Kong in April 2011 when he was taken into custody at Beijing's international airport and detained for 81 days amid a government crackdown on political activists. Ai's studio in Beijing was raided, and his wife and several employees were taken into custody for questioning. Seven weeks after Ai was taken into custody, state news agency Xinhua reported that Beijing police said his company evaded a "huge amount of taxes" and "intentionally destroyed accounting documents." He was released on one year's probation the following June, with heavy restrictions imposed on his movements. Ai was forbidden to speak to the media or post on his Twitter account about his detainment. His phone was tapped, his e-mails were checked, and he had to report his appointments with other people to the police. The government campaign against Ai Weiwei has been attributed to fears of a potential Arab-Spring-style uprising, following online calls for a "Jasmine Revolution" in 2011.
China's door "wide open" to foreign NGOs (September 2012)
China welcomes law-abiding International non-governmental organizations (INGOs), but registration of INGOs needs strengthening, said Minister of Civil Affairs Li Liguo at at a press conference organized by the State Council Information Office.
Chinese turn to microblogs for donations instead of government charities (August 2012)
Chinese citizens increasingly depend not on government or officially sanctioned non-profit organizations, but on Twitter-like microblogs called Weibo, for donations.
NGOs get boost from Shenzhen register reforms (August 2012)
Wang Jinyun had waited nine years for the piece of paper that officially confirmed his organization's NGO status. That precious piece of paper also confirmed that Shenzhen’s NGO registration reforms are working. Wang, founder of Shenzhen-based Yangguangxia (Under the Sun), said his application, the fifth since 2003, was approved due to the reforms.
Government wants more transparency, which means more control over NGOs (August 2012)
New rules proposed by the Ministry of Civil Affairs would impose new restrictions on NGOs in the name of transparency. Financial statements must be more readily available and the use of funds must be restricted. "Transparency is good, but it should be applied to all societal fields," says one source familiar with the law.
New regulations on the management of charitable foundations issued (July 2012)
On July 30, the Ministry of Civil Affairs published new regulations to enhance accountability and transparency and increase public confidence in charities. However, several restrictive provisions related to administrative expenses and operating costs were also introduced. The regulations were released after a number of controversies hit the sector, which created fury among Web users who demanded more transparency of China's charities.
Changing climate for religious NGOs? (July 2012)
Religious non-governmental organizations (RNGOs) in China may face many challenges. They mainly support people such as migrant workers and their families, orphans, and victims of natural disasters. The government encourages this, but also places many restrictions on RNGOs acquiring legal registration. It also bans RNGOs from overt religious activity. This has led many groups engaged in charitable activity - like those associated with illegal Protestant house churches - either to not seek registration or to register as commercial organizations. Despite these challenges, RNGO leaders remain cautiously optimistic about the future.
Clinton comments on human rights blocked in China (July 2012)
A Chinese microblogging site has blocked remarks on human rights made by U.S. Secretary of State Hillary Rodham Clinton in Mongolia, according to a Hong Kong group that monitors Chinese media. The China Media Project, based at the University of Hong Kong, spotted that a post on the Sina Weibo site quoting Clinton had been deleted Wednesday morning. The Monday speech at the International Women’s Leadership Forum was widely regarded as an implied jab at Beijing, effusively praising the power of democracy at a time when Chinese pundits have cautioned that too much democracy could destabilize the region.
Eric Schmidt: The Great Firewall of China will fall (July 2012)
Technology and information penetration in China will eventually force the Great Firewall of China to crumble and even lead to the political opening of the Chinese system, according to Google Chairman Eric Schmidt.
Charity Law submitted to State Council (June 2012)
The Ministry of Civil Affairs has submitted a draft of the Charity Law to China’s State Council (cabinet), a sign that the country may be progressing towards rules covering philanthropic organizations. If passed, the new law would finally address tax deductions for donations, a system for supervising charity work and how donations can be used. This is intended to bring order to an area plagued by scandal in recent years.
Environmental NGOs grow across China but struggle for support (June 2012)
Environmentalism has made giant strides in China, led in part by the efforts of NGOs that have taken it upon themselves to bring about small changes capable of making big differences. Their campaign to improve the environment across the country began years ago, before this current age when checking the air's PM2.5 levels was as easy as a swipe on a smartphone. There are more than 3,500 environmental NGOs in China, not counting unregistered organizations active at universities and in rural areas. However, such grassroots activism remains a relatively new phenomenon, according to Deng Guosheng, director of the NGO Research Center at Tsinghua University.
Corporate-NGO Partnerships in China: Fostering Employee Volunteer Programs (June 2012)
Corporate-NGO partnerships are increasing in China, but most follow a fairly traditional, PR-driven formula. Some companies are just looking to donate to a ready-made philanthropy program or basic ways for their staff to volunteer in community activities, which tend to be unrelated to their core business. Furthermore, these programs are typically limited in the ways they engage with nonprofits to foster a complimentary exchange of resources and alignment of organizational missions.
China keen to scale down EU human rights talks (June 2012)
China wants to hold human rights talks with the EU just once a year and to curtail discussion of individual cases. Wang Xining, the Chinese EU embassy's spokesman, said the meetings should take place "maybe once a year and not twice." The behind-closed-doors talks of mid-level diplomats have been going on for 16 years. In 2010 and 2011, China declined to hold a second meeting. The last one took place on 29 May in Brussels. But the second 2012 talks have not been tabled yet. Wang added the EU should ask fewer questions about individual victims.
Law to give new start to embattled charities (June 2012)
A new law draft, aiming to enhance the transparency of the charity sector, which was rocked by scandal last summer, has been submitted to the State Council for further review, according to the Ministry of Civil Affairs (MOCA). "The new law will standardize the donation information which will be open to the public, including the donor's identity, the value of donated objects and the date the donations were made," said Dou Yupei, vice minister of civil affairs.
China tells Tibetan NGOs to register or else face closure (May 2012)
Following a wave of self-immolations and mass protests in Tibetan areas, China is implementing policies aimed at striking the social and cultural backbone of the Tibetan people. In the latest development, Chinese authorities in Kardze, eastern Tibet, issued a notification requiring all non-governmental organizations in the region to be registered under set criteria, failing which the groups will be declared illegal.
Will pressure make Chinese aid more transparent? (March 2012)
An article discusses China as a secretive donor country in economically poor but resource-rich countries, funding infrastructure construction in return for business deals and access to natural wealth and land. However, China is increasing aid transparency at its own pace. Notably, on 1 December 2011, China publicly declared transparency a principle it will uphold when it signed an agreement at the Fourth High Level Forum on Aid Effectiveness held in Busan, South Korea.
Revisions of law to ensure human rights related to detention, arrest and surveillance (March 2012)
Controversial clauses that permit detention, arrest or surveillance of suspects at specific places, without informing their families, have been partially revised in response to an outcry to curb possible abuses of public security measures. The new proposal requires public security to inform the suspect's family within 24 hours after arrest and surveillance. However, the proposal still permits the police not to inform the family "if the case is related to state security or terrorism, and if telling families would impede the investigation.”
Charities open to religious groups (March 2012)
Chinese authorities have given the green light for religious groups to engage in more charitable work, Preferential policies, including government subsidies and tax reductions, will be set in place when religious groups seek registration to establish foundations, nursing homes and hospitals. The new regulation stipulates that faith-based charities should strictly function as non-profit organizations and guarantee financial transparency with regular disclosure of donors and expenditures.
Political advisers argue that legislation on the charity law is "vital" for the NGO sector to grow (March 2012)
China should speed up legislation on the charity sector to ensure that more grassroots organizations can gain legal status and charity fraud is outlawed, top lawmakers and political advisers have proposed. The current regulations on social organizations in China require that a non-governmental organization must find an administrative body to oversee its activities as a precondition to registering with the civil affairs authorities as a nonprofit organization.
China develops law on philanthropy (October 2011)
Social groups may get right for litigation (October 2011)
China human rights group blocked from EU-China dialogue (September 2011)
China jails veteran democracy activist (September 2011)
New breakthrough for grassroots charity groups (August 2011)
Chinese civilian NGOs seek charity legislation (August 2011)
Carefully cultivating NGOs (July 2011)
China to ease NGO registration policy (July 2011)
China seeks to expand modern philanthropy (May 2011)
Biden, Clinton lecture China on human rights (May 2011)
End the silence on Ai Weiwei (April 2011)
China's human rights crackdown - interactive guide (April 2011)
EU and US urge China to free Ai Weiwei (April 2011)
Crack down on Egypt-inspired protests in China (February 2011)
Experts assess the progress of civil society in China (February 2011)
Civil Society News from China-Wire
Nonprofits in China, Harvard University’s Hauser Center for Nonprofit Organizations
NGOs in China
China Philanthropy Blog
China Foundation Center
The foregoing information was prepared by Shawn Shieh, Director and Editor, China Development Brief (English).