NGO Law Monitor: China RESEARCH CENTER - The International ...

China - NGO Law Monitor - Research Center - ICNL
http://www.icnl.org/research/monitor/china.html[11/9/2012 4:19:31 PM]
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 (read news article). 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 taxexempt
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.
February/March 2012
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