During the recent coronavirus epidemic, Hubei province, the center of the outbreak, received charitable donations of more than 9.78 billion yuan (USD 1.39 billion) and more than 41 million items, including 422,600 sets of medical protective clothing and 887,500 N95 masks in a 10-day period. In early February 2020, criticism emerged that was directed at the Red Cross Society of Hubei and the Hubei branch of the China Charity Federation, which are both Government-Organized NGOS (GONGOs), for mismanaging public donations and not being transparent about how the donations were being used. Soon after, the Ministry of Civil Affairs issued guidelines for fundraising for disease prevention and control and reminded charitable organizations to adhere to the Charity Law and other relevant regulations.
Besides coronavirus-related developments, there is no additional news about the Regulation for the Registration and Management of Social Groups, a draft of which has been submitted to the State Council for review.
The Chinese party-state has also made efforts to remake civil society and direct resources to NGOs working on the party-state’s priority areas (see Introduction below). No new legislation came out of the 13th National People’s Congress meeting in March 2019, but Premier Li Keqiang’s work report at the meeting revealed several new priority areas. One is the focus on developing and collaborating with communities and community-based organizations. The report promises support for community social organizations in the form of policies, “subsidies, government procurement [funds], rewards, and start-up investments.” The focus on communities is in line with the party-state’s effort to weaken advocacy NGOs working on national issues.
A second priority area is the first use of the term “humanitarian assistance” to include not just domestic disaster relief but overseas assistance in line with China’s “going abroad” efforts reflected in the Belt and Road Initiative and establishment of the new International Development Cooperation Agency in March 2018. China’s “going abroad” push means that China’s NGOs reflecting the party-state’s priorities will be playing a more visible role and engaging with NGOs in countries outside of China.
Meanwhile, the harassment and detention of NGO staff and activists in south China has also shown no signs of abating. In December 2019, more than a dozen lawyers and activists who had convened in the southeastern city of Xiamen to discuss China’s democratic transition were reported missing or detained. One of the missing, Xu Zhiyong, a well-known legal scholar and activist and the founder of the New Citizens Movement, was later found in February 2020 to have been detained by Guangzhou police.
For a fuller discussion of the Charity Law and its implementing regulations, see ICNL’s Philanthropy Law Report and accompanying resources which include FAQs about the Charity Law. For a more detailed discussion of the ONGO Law, see ICNL’s Philanthropy Law Report and accompanying resources which include FAQs about the ONGO Law.
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 and their partnerships with the government and business sectors. CSOs of various kinds are moving gradually from the margins of society into the mainstream.
For years, management of the emerging civil society sector by Communist Party and state agencies remained restrictive but also 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 in this space 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 groups engaged in advocacy, legal aid, labor rights and religion are often more closely monitored by Party and state authorities. Over the years, a number of organizations have been harassed and even closed down, and many civil society activists (including lawyers, journalists, academics, bloggers) have been detained, tried and imprisoned for their peaceful activities.
The legal framework reflecting 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 regulations govern the full range of legally-registered non-profits which the Chinese refer to generically as “social organizations” (shehui zuzhi, 社会组织). In an effort to improve its regulatory capacity and coordination with CSOs, the government has since the late 2000s begun 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 “social management innovation” [shehui guanli chuangxin] a focal point of its 12th Five Year Plan (2011 – 2015). “Social management innovation” here refers to improving the party-state’s ability to manage and coordinate with a range of CSOs and other non-state actors to address common goals. From 2009 to 2013, there was a flurry of activity among local governments across China to “innovate” by lowering barriers to CSO registration, contracting social services to CSOs, building programs and platforms to coordinate, support and incubate CSOs, and creating more detailed regulations and standards to guide the development of the CSO sector.
The administration of Xi Jinping, who became president of China in March of 2013, reaffirmed these reforms in the important November 2013 Third Plenum Decision of the 18th Central Committee. Instead of “social management innovation”, the Decision used the term “social governance,” which was seen as a favorable sign because it emphasized the state’s partnership with CSOs in governing, rather than its management of CSOs.
Months before the Decision came out, however, the new administration had already embarked on a sustained clampdown on certain elements of China’s civil society. This move sent a signal that any reforms were intended to apply to certain categories of CSOs, such as charitable organizations, social service organizations, and economic and trade associations, but not necessarily to civil society actors engaged in advocacy, ethnic minority affairs, religion and other more sensitive areas.
Taken together with other policy statements and actions, these seemingly contradictory initiatives can be seen as part and parcel of a broader effort to strengthen the party-state’s legitimacy with the masses. Thus, the Xi administration is also launching an unprecedented anti-corruption campaign that has ensnared many high-level leaders, a campaign to encourage ideological orthodoxy in state agencies, universities, the media and the blogosphere, and a rule-of-law campaign emphasizing greater adherence to rules both inside and outside of the Party. These campaigns are overlaid with a veneer of nationalism that stresses the importance of national sovereignty and security and reflects both China’s growing power in the world and its growing insecurity as it faces more “mass incidents” inside its borders and renewed territorial challenges on its periphery in places like Xinjiang, Tibet, the South China Seas and Hong Kong.
Chinese CSOs, in short, have been caught up in the larger struggle by the Xi administration to craft a stronger party and a stronger China. These developments constitute a major top-down effort by the party-state to mold a “civil society with Chinese characteristics” in its own image in opposition to what the government perceives as Western-style individual freedoms and rights. These efforts to remake China’s civil society are reflected in the roll-out of the Charity Law, the Overseas NGO Law, and a unified Regulation for the Registration and Management of Social Organizations. This regulatory “Great Leap Forward” constitutes the biggest legislative development in the history of the not-for-profit sector in the PRC. These legislative developments have been complemented by the efforts of government from the central to the community levels to direct substantial resources to funding and building the capacity of CSOs working in the priority areas of poverty alleviation, education, disaster relief, child and elder care, and community services.
 Yu Keping, “Civil Society in China: Concepts, Classification and Institutional Environment” in Deng Zhenglai, ed., State and Civil Society: The Chinese Perspective (Singapore: World Scientific, 2011)
|Organizational Forms||Social Associations (SAs, shehui tuanti), which are the equivalent of membership associations; Social Service Organizations (SSOs, shehui fuwu jigou, formerly known as Civil Non-Enterprise Institutions or minban fei qiye danwei); and Foundations (jijinhui). In addition, there are many different types of informal CSOs: those registered as businesses; those attached to a legal organization; small community-based organizations; rural cooperatives; religious organizations; and networks.|
|Registration Body||Ministry of Civil Affairs and local Civil Affairs Bureaus|
|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||The Overseas NGO Law, which goes into effect on January 1, 2017, will raise the barriers for international NGOs seeking to work in China. Chinese organizations are sometimes required to report international contacts to authorities and sometimes to seek approval for visits, international cooperation, foreign donations, etc. Chinese organizations, particularly NGOs, that collaborate or receive funding from foreign organizations are monitored closely and sometimes harassed.|
|Barriers to Resources||With the passage of the Charity Law and Overseas NGO Law, a clear distinction can be made between domestic and foreign resources. The Overseas NGO Law will raise the barriers for Chinese organizations (particularly grassroots ones) seeking foreign funding and collaboration. On the other hand, the Charity Law and the revised registration and management regulations for Foundations and other social organizations will make it easier for Chinese nonprofits to access social resources because they lower the barriers to fundraising and provide greater tax incentives for donations to public benefit and charitable organizations and activities.|
A 2009 regulation requires CSOs to go through more paperwork to transfer donations from overseas organizations into their bank accounts.
|Barriers to Assembly||Assembly Law and Implementing Measures contain vague and restrictive provisions; 5 days advance notification requirement; spontaneous assemblies not permitted; onerous obligations and liabilities on organizers; excessive time, place, and manner restrictions.|
|Type of Government||One-Party State|
|Life Expectancy at Birth||Male: 74 years (2018)|
Female: 78 years (2018)
|Literacy Rate||Male: 98.2% (2015 est.)|
Female: 94.5% (2015 est.)
|Religious Groups||Buddhist 18.2%, Christian 5.1%, Muslim 1.8%, folk religion 21.9%, Hindu < .1%, Jewish < .1%, other 0.7% (includes Daoist (Taoist)), unaffiliated 52.2% note: officially atheist (2010 est.)|
|Ethnic Groups||Han Chinese 91.6%, Zhuang 1.3%, other (includes Hui, Manchu, Uighur, Miao, Yi, Tujia, Tibetan, Mongol, Dong, Buyei, Yao, Bai, Korean, Hani, Li, Kazakh, Dai and other nationalities) 7.1% note: the Chinese government officially recognizes 56 ethnic groups (2010 est.)|
|GDP per capita||$16,700 (2017 figure in PPP)|
Source: The World Factbook. Washington, DC: Central Intelligence Agency, 2009.
|Ranking Body||Rank||Ranking Scale|
(best – worst possible)
|UN Human Development Index||86 (2018)||1 – 182|
|World Bank Rule of Law Index||8 (2018)||100 – 0|
|World Bank Voice & Accountability Index||45 (2018)||100 – 0|
|Transparency International||87 (2018)||1 – 168|
|Freedom House: Freedom in the World||Status: Not Free|
Political Rights: 7
Civil Liberties: 6 (2018)
|Free/Partly Free/Not Free|
1 – 7
1 – 7
|Foreign Policy: Fragile States Index||89 (2018)||178 – 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
Many of the key national laws and regulations affecting the sector are as follows, although this list is not exhaustive. 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)
- National Security Law (adopted in July 2015)
- Counterterrorism Law (反恐怖主义法, sometimes translated as the Anti-Terrorism or Counterespionage Law) (approved December 2015 and went into effect on January 1, 2016)
- Charity Law (慈善法) (promulgated March 16, 2016 , goes into effect on September 1, 2016)
- Law on the Management of Overseas NGOs’ Activities in Mainland China (境外非政府组织境内活动管理法) (promulgated April 28, 2016, goes into effect on January 1, 2017): Official English Translation; Official Chinese Version
- Trial Regulations on Admonishment Meetings for Social Organizations by Registration Management Organs and Administrative Law Enforcement (March 16, 2016) (社会组织登记管理机关行政执法约谈工作规定（试行）)
- Trial Notice on Registration Management Organs’ Acceptance of Complaints and Reports about Social Organizations (August 15, 2016) (社会组织登记管理机关受理投诉举报办法（试行）)
- Central Committee and State Council Opinion on the Reform of the Social Organization Management System and Promotion of the Healthy and Orderly Development of Social Organizations (August 2016) (关于改革社会组织管理制度促进社会组织健康有序发展的意见)
- Measures for the Designation of Charitable Organizations (September 1, 2016) (慈善组织认定办法`)
- Measures on the Administration of Public Fundraising by Charitable Organizations (September 1, 2016) (慈善组织公开募捐管理办法)
- Notice on Social Organizations Initiating Party Construction Work During Registration (September 18, 2016) (民政部关于社会组织成立登记时同步开展党建工作有关问题的通知)
- Regulation on the Annual Expenditures and Management Expenses of Charitable Organizations Carrying Out Charitable Activities （慈善组织开展慈善活动年度支出和管理费用的规定） (October 2016): preface of the regulation; text of the regulation.
- Measure for the Management of Charitable Trusts (慈善信托管理办法) (July 2017)
- Regulation on Social Organisation Credit Information Management (社会组织信用信息管理办法). (January 24, 2018)
- Measure for Charitable Organizations’ Information Disclosure (慈善组织信息公开办法) (August 6, 2018)
- Provisional Measures for Investment Activities of Charitable Organizations for Capital Preservation and Appreciation (慈善组织保值增值投资活动管理暂行办法) (October 25, 2018)
In addition to the laws above that directly regulate the sector, there are a number of other laws and regulations in other sectors that are relevant because they were drafted with input from civil society groups and have important implications for civil society groups. Below are two recent examples:
The Anti-Domestic Violence Law (反家庭暴力法, also translated as the Domestic Violence Law) was approved by the NPC Standing Committee in July 2015—the same session in which the National Security Law was approved—and went into effect on March 1, 2016. The law is one of the few pieces of legislation in which we can see the contribution of civil society groups, which have pushed for this law for the last decade. It has been in development for years and its passage makes an issue that was long viewed as a private matter a responsibility of the state.
An Environmental Law was approved by the 12th NPC on April 24, 2014 and took effect in 2015. It lowered the barrier for NGOs to file public interest lawsuits. A previous draft had only allowed a few NGOs to file public interest lawsuits, but the final draft contained more liberal language that allowed any NGO registered with Civil Affairs at the city level or above to file a public interest lawsuit. That interpretation was later affirmed by the Supreme People’s Court. Soon after the Environmental Law went into effect, two well-known grassroots environmental NGOs filed a public interest lawsuit in Nanping city, suing four individuals for harmful mining activities in the area. That lawsuit was accepted by the Nanping Intermediate Court on January 1, 2015.
Pending NGO Legislative / Regulatory Initiatives
June 2018 – Draft Measure on Management of Government Procurement of Services
This regulation was issued by the Ministry of Finance for public comment. The new draft version of the regulation sets stricter standards for assessing the results achieved in service programs procured by the government by adding more quantitative indicators. Some of the highlights include:
1. Clarification of which government agencies are allowed to purchase services, listing nine different categories of organizations which significantly broadens the purchasing base.
2. Clarification of what qualifications social organizations need to have in order to undertake government procurement programs. Qualified organizations should have paid all taxes and social insurance for three years, and have a good record of publicizing their information.
3. Detailed rules for the management and use of funds used for government procurement of services. In particular, the purchasing entities are not allowed to act as guarantors towards financial institutions on behalf of the organizations undertaking the programs which apply for loans from financial institutions. There had previously been cases in Guangdong of social work organizations that had been awarded government procurement contracts but had not yet received the funds trying to get loans from financial institutions in order to run their programs.
August 2018 – Draft Regulation for Registration and Management of Social Organizations
In June and September 2016, draft regulations governing the registration and management of the three different types of social organizations – Social Associations (SAs), Social Service Organizations (SSOs) and Foundations – were issued for public comment. These draft regulations were revisions of three earlier regulations that formed the heart of the regulatory system governing China’s social organizations: the “Regulations for the Registration and Management of Social Groups”, which were issued on October 25, 1998; the “Provisional Regulations on the Registration and Management of Civil Non-enterprise Units”, which were issued on October 25, 1998; and the “Foundation Management Regulations”, which were issued on March 8, 2004. They specify which government bodies are responsible for their registration and management, the registration requirements and procedures, the internal governance of the organization, their legal responsibilities, and so on.
It has been well over 10 years since any of these regulations have been revised, and many experts have been expecting them to be revised, particularly after the passage of the Charity Law. Yet the draft regulations issued in 2016 for public comment were pending for more than two years and never appeared in their final form. The mystery came to an end in August of 2018 when the Ministry of Civil Affairs issued a single draft regulation that combined all three of the earlier regulations into one for public comment.
This draft regulation has attracted quite a bit of attention among academics, practitioners and commentators because of its importance. While the regulation preserved parts of the 2016 revisions, such as allowing four categories of social organizations to register directly without a PSU, other parts of the regulation were criticized for defining “charity” and “public welfare” too narrowly, for prohibiting social organizations from engaging in “for-profit, business activities”, and for not lowering some of the registration requirements to make it easier for smaller, community foundations to register. Some experts have noted that the Ministry of Civil Affairs only gave less than 30 days for the public to send in comments. They therefore called for the public comment period to be lengthened given the importance of this regulation.
Finally, the draft regulation includes articles on the need for social organizations to establish Communist Party organizations and carry out Party activities. Social organizations are required to prepare the conditions and provide a workplan for setting up such Party Organizations. None of this language requiring Party organizations was in the Charity Law or in the previous social organization regulations.
For a fuller discussion of the Charity Law and its implementing regulations, see ICNL’s Philanthropy Law Report and accompanying resources which include FAQs about the Charity Law. For a more detailed discussion of the ONGO Law, see ICNL’s Philanthropy Law Report and accompanying resources which include FAQs about the ONGO Law.
There are three main legal forms of Social Organizations (the official Chinese term for not-for-profit organizations) in China:
- Social Associations (SAs) (shehui tuanti, 社会团体) – these are generally membership associations
- Social Service Organizations (SSOs) (shehui fuwu jigou, 社会服务机构) (formerly Civil Non-enterprise Institutions (CNIs) (minban fei qiye danwei, 民办非企业)
- Foundations (jijinhui, 基金会)
In addition to these three legal forms, two legal arrangements for carrying out charitable activities have been created by the Charity Law , which went into effect on September 1, 2016. One is a charitable organization (慈善组织，cishan zuzhi) status which is open to “lawfully established nonprofit organizations” whose main purpose is “carrying out charitable activities” and who do not have a “profit making purpose” (Article 8-9). The three types of social organizations can obtain charitable organization status in one of two ways. One is to apply for the status when registering as a social organization. Second, if they have already registered as a social organization, then they can apply for charitable status recognition following procedures in the Measures for the Designation of Charitable Organizations issued in September 2016. As of 2018, 5289 organizations had received charitable organization status.
The second legal arrangement is the charitable trust (慈善信托, cishan xintuo).The charitable or public benefit trust was first recognized in the 2001 Trust Law, but that Law did not make clear who the supervisory authorities were and there were no clear tax provisions governing charitable trusts. As a result, very few charitable trusts were established after the Trust Law was passed. The intent of including charitable trusts in the Charity Law appears to be to clarify the management of those trusts and their tax provisions in order to encourage their establishment and use. Article 45 of the Charity Law states that charitable trusts must “file documents for the record” (bei’an) with the Civil Affairs authorities in order to be eligible for tax benefits. According to the National Charity Information Platform, in 2019 53 charitable trusts have been registered so far, with assets of over 250 million yuan.
In addition to these legal forms, there are many informal NPOs registered as for-profit businesses, as well as unregistered NPOs. Some unregistered NPOs gain legal status by attaching themselves to another legal entity, such as a social organization or a “public institution” (see below), including universities and research institutes. NPOs registered as businesses and unregistered NPOs are technically not NPOs in a legal sense, but they are voluntary, nongovernmental, not-for-profit, self-governing organizations in an operational sense. They are mission-driven, not-for-profit 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 not-for-profit nature of their activities in their reports to funders. There are no accurate numbers for this category of NPOs, with estimates ranging from a few hundred thousand to a few million. The reason for this wide range is because of differences in how one defines an NPO. Some scholars, for example, come up with such large numbers because they cast a wide net and count Party-controlled mass organizations such as the Communist Youth League and Women’s Federation and their local branches, as well as rural cooperatives.
Together, the legal NPOs and the informal NPOs are the closest equivalent to nongovernmental, not-for-profit organizations. A substantial portion of the legal NPOs – in particular, SAs 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 NPOs, as a rule, tend to be more grassroots and independent from the state.
A fifth type of organization, the public institution or public service unit (事业单位，shiye danwei), is a quasi-governmental agency, generally formed by the government and staffed with government employees. They are a residue of the centrally-planned system set up during the 1950s. Public universities, research institutes, and hospitals fall in this category. They are discussed in this Note because they frequently receive grants from foreign donors and are subject to some of the same tax rules as NPOs. There is a plan to carry out a reform of public institutions by privatizing a portion of them and turning them into social organizations.
The key registration body for legal NPOs 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. The only exception to this rule is overseas NPOs, for which the Ministry of Public Security will be the registration body.
A number of scholars thus estimate that informal NPOs outnumber legal NPOs. As of 2018, there were approximately 810,000 legally-registered NPOs, but estimates of the number of informal NPOs run from 1-3 million depending on which types of organizations are counted as NPOs. For discussions of these estimates, see Andrew Watson, “Civil Society in a Transitional State: The Rise of Associations in China,” in Jonathan Unger, ed., Associations and the Chinese State (Armonk, NY: M.E. Sharpe, 2008) and Guosheng Deng, “The Hidden Rules Governing China’s Unregistered NGOs: Management and Consequences,” The China Review, 10:1 (Spring, 2010). See the ICNL infographic, the Universe of Chinese NGOs, and graphs showing the growth of Foundations and Social Organizations.
Public Benefit Status
Chinese law distinguishes between NPOs that have a charitable or public benefit purpose and those that serve other purposes. The 2016 Charity Law provides a special designation for charitable organizations and defines the scope of charity or public benefit in China.
Charitable organizations can be existing NPOs such as SAs, SSOs, or Foundations that obtain charitable status. (Implementing regulations currently being drafted may automatically consider Foundations to be charitable organizations, but SAs and SSOs will need to apply separately for charitable status.) Registration as a charitable organization requires applying to the national or local Civil Affairs department. Article 9 of the Charity Law sets out the following requirements that must be met by the applicant:
(1) Aim to carry out charitable activities;
(2) Not have the goal of making a profit;
(3) Have a name and address;
(4) Have an organizational charter;
(5) Have necessary financial assets;
(6) Have an organizational structure and person in charge in accordance with the requirements;
(7) Meet other conditions stipulated by laws and administrative regulations.
Articles 3-5 of the Charity Law define the scope of charity/public benefit. Specifically:
Article 3.‘Charitable activities’ in this law refers to the following public interest activities voluntarily carried out by natural persons, legal persons and other organizations through the donation of property, the provision of services or other means: (1) Helping the poor and the needy; (2) Assisting the elderly, orphans, the ill, the disabled, and providing special care; (3) Alleviating losses incurred by natural disasters, accidents, public health incidents and other emergencies;(4) Promoting the development of education, science, culture, health, sports and other causes; (5) Preventing and alleviating pollution and other public hazards, protecting and improving the eco-environment;(6) Other public interest activities in accordance with this law.
Barriers to Entry
There are extensive barriers to entry based in policy, practice, and regulation. The Charity Law, and the revised drafts of registration and management regulations for social organizations, will lower some of those barriers, for registration and fundraising, but may raise other barriers. The discussion below is based largely on the old regulations and will be subject to revision as the implementing regulations for the Charity Law and the revised registration and management regulations for social organizations are rolled out over the next few years. For more resources for understanding the Charity Law, see ICNL’s Philanthropy Law Report and accompanying resources which include FAQs about the Charity Law.
Registration procedures remain complex and cumbersome, with extensive documentation and approval requirements. Many NPOs are required to operate under a system of “dual management” in which they must generally first obtain the sponsorship of a “professional supervising unit” 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 following articles of the Charity Law state:
Article 4. Charitable activities shall abide by the principles of being lawful, voluntary, honest, and non-profit, and must not violate social morality, or endanger national security or harm societal public interests or the lawful rights and interests of other persons.
Article 5.The government encourages and supports natural persons, legal persons and other organizations in legally carrying out charitable activities that represent the core values of socialism and promote the traditional morals of the Chinese nation.
Other broad provisions give the state wide discretion over which organizations are allowed to register. But the barriers to entry do not end there. For example, the Regulations on the Registration and Management of Social Associations (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 Associations (1999) and the Interim Regulations on the Registration and Administration of Civil Non-Enterprise Institutions (CNIs) (1998) both stipulate that SOs and CNIs cannot establish branch organizations or offices in other regions. The revisions of these regulations that are currently being drafted will relax some of these requirements, but not do away with them completely.
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 also has broad discretionary authority to close social organizations according to the Interim Measures for Banning Illegal Non-Governmental Organizations (2000).
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.
Over the last few years, local governments have been experimenting with reforms to lower barriers to entry by reforming the dual management system for certain categories of social organizations. In most cases, this reform involves doing away with the requirement for social organizations to obtain the sponsorship of a professional supervising unit.
Many of these reforms have been adopted by the central government as can be seen in the 2016 Charity Law, and in the registration and management regulation for SAs, SSOs, and Foundations that is currently being drafted. In these draft regulations, the “dual management system” will be removed for four categories of NPOs: trade associations and chambers of commerce, science and technology associations, public benefit and charitable organizations, and urban and rural community organizations. These four categories of NPOs will be able to register directly with the Ministry of Civil Affairs without getting sponsorship of a “professional supervising unit.”
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 charity tend to be viewed more favorably than nonprofits engaged in advocacy and rights-based activism, although there is no clear distinction between the two types of organizations in practice. For some forms of nonprofits, such as SAs and SSOs, 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 a number of other ways. It may raise questions about 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; micromanage the banking arrangements of various kinds of charitable groups; undertake investigations of operational activities and terminate organizational activities through application of tax laws; and harass the organization by exerting pressure through the organization’s landlord or utility company. 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 the Ministry of State Security, intensively monitor organizations of particular sensitivity to the Party and state.
Over the years, a number of methods have been used to restrict and control the operational activities of certain nonprofit groups with some being harassed and others being closed down temporarily. For example, in 2007, the civil society publication, Minjian was closed down, and another, China Development Brief, stopped publishing for a few months. In 2010, 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. Under President Xi Jinping’s administration (2013 – present), civil society has experienced a sharp upturn in repression by the police and security forces in which many independent CSOs and law firms have been harassed and forced to close, and their staff and leaders interrogated and detained.
 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, assembly 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, assembly and advocacy.
Under President Xi Jinping, many human rights lawyers and activists engaged in advocacy have been detained, and criminally charged, while bloggers and public intellectuals engaged in advocacy have been discouraged from making public statements. In addition, tighter ideological controls have been placed over universities, media and social media. In one of the biggest crackdowns on labor in recent years, scores of workers who protested their firing from the Jasic Technology Company in Shenzhen, and university graduates from Marxist societies in some of China’s top universities who came out in support of the workers, were detained over the last half of 2018. In 2019, a number of other activists with no connection to the Jasic case have been detained and some criminally charged. These developments have had a chilling effect on civil society, and discouraged CSOs and individual citizens from engaging in rights-based advocacy and activism.
Barriers to International Contact
Prior to 2016, there were relatively few barriers to international contact in the regulatory framework. Most overseas NGOs worked in a regulatory gray area. Due to the difficulties of registering a representative office, the large majority either chose to register as a business entity, or remained unregistered and worked under the radar through Chinese partners.
This state of affairs changed fundamentally with the passage of the 2016 Law of the People’s Republic of China on Administration of Activities of Overseas Nongovernmental Organizations in the Mainland of China (hereafter ONGO Law). The Law, which went into effect on January 1, 2017, erects high barriers between overseas NGOs (defined as “nonprofit, non-governmental social organizations…. that have been lawfully established outside of mainland China” which includes Taiwan, Hong Kong and Macau) and their Chinese partners. There are two important aspects about the Law:
One is that it places the registration and supervision of ONGOs and their activities in China under the Ministry of Public Security, instead of the Ministry of Civil Affairs which used to regulate ONGOs. Second, it is a very comprehensive law that gives all ONGOs only two legal channels for operating in China:
- Register a representative office in China; or
- ONGOs that do not want to registered a representative office will need to “file documentation for the record” (bei’an) to carry out any “temporary activities” in mainland China lasting no longer than one year. The overseas NGO and its Chinese partner will need to file the required materials about their collaboration and any necessary approvals with the Public Security office. They will also be required to file reports on their activities to Public Security.
Article 9 of the Law states: “ONGOs that do neither of these are not allowed to carry out activities either openly or covertly, or to authorize, fund or covertly authorize any Chinese work unit or individual to carry out activities.”
This statement essentially prohibits any Chinese work unit or individual from cooperating with an INGO that has not gone through one of the above two legal channels. The law clearly is not enabling. Perhaps the best thing to be said about it is that it does legitimize the status of ONGOs in China, and establishes a formal channel between ONGOs and the government. For more resources for understanding the ONGO Law, see ICNL’s Philanthropy Law Report and accompanying resources which include FAQs about the ONGO Law.
In addition to these legal barriers, there have always been a number of extra-legal barriers to international contact. Chinese organizations of all kinds have often been required in the past 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. Moreover, Chinese organizations, particularly NGOs, that collaborate or receive funding from foreign organizations are monitored closely and sometimes harassed. The State Security Ministry established an office several years ago to monitor both domestic and international NGO affairs. Foreign NGOs are regularly accused by Chinese media of supporting activities that undermine social stability and national security.
The risk of associating with foreign persons or organizations has risen because of growing tensions between China and the United States and other Western countries, and allegations of Western support for the protests in Hong Kong that began in the summer of 2019. In April 2019, the party-state’s mouthpiece, the People’s Daily, published an article detailing the case of two foreign NGOs that posed threats to China’s “political security.” In July 2019 another article appeared in a party-run paper in Shanghai accusing several U.S. NGOs of being behind the massive protests taking place in Hong Kong against a controversial extradition law. After President Trump signed the Hong Kong Human Rights and Democracy Act into law in November 2019, the Chinese government announced in early December that it would impose sanctions on five U.S. NGOs with offices in Hong Kong: Freedom House, Human Rights Watch, National Endowment for Democracy, International Republican Institute and National Democratic Institute. Soon afterward, the Chinese Foreign Ministry announced the first investigation and penalty directed at a U.S.-based NGO, Asia Catalyst, for violating the Overseas NGO Law.
While barriers to international contact inside China have risen, China’s growing global footprint and “going abroad” push will mean more opportunities for engagement and collaboration with Chinese NGOs and other entities outside of China. China’s Belt and Road Initiative now covers more than 100 countries in Asia, Africa, Latin America and Europe and in March 2018, a new International Development Cooperation Agency was established for the purpose of providing “humanitarian assistance” overseas. In 2017, the Chinese government established a USD one billion South-South Cooperation Fund to support disaster relief and other humanitarian efforts in developing countries. In 2018, a new International Cooperation Development Agency (ICDA) was set up to coordinate foreign aid. In 2019, the ICDA signed a series of agreements with international organizations to deliver aid through the South-South Cooperation Fund.
There are already a number of Chinese NGOs that have offices and operations overseas, and platforms have been created to support these efforts. In 2017, a Silk Road NGO Cooperation Network Forum was established to promote collaboration between international and Chinese NGOs, presumably directed towards the Chinese government’s priority areas. In the past two years, 310 members from 69 countries have already joined the Cooperation Network, of which 173 are international NGOs, and 137 are Chinese. Over the next two years, the Cooperation Network has committed to the “Silk Road Family” initiative, promoting the establishment of 500 NGO partners