NGOs in China

After a year, legislation on overseas NGOs in China has once again aroused great interest. The last time was in April last year, when the law on overseas NGOs was published to solicit comments from society, causing a heated debate. Members of the public from all sectors of society used a variety of channels and means to submit numerous suggestions to the legislature. After a period of concerted revision by the legislature, the law was finally passed at the 20th meeting of the 12th National People’s Congress and will go into effect on New Year’s Day 2017. The proclamation of the law once again drew the concerned attention of many people and raised a number of doubts. In light of this, it seems necessary to clarify these questions in the hope of contributing to the correct interpretation and implementation of the law.

  1. Background and Goals of the Legislation

Overseas NGOs gradually entered China in the course of Reform and Opening Up, and have conducted activities in a broad range of areas. For a long time, China had no legislation that specifically regulated and guided overseas NGOs. Of the three sets of regulations relevant to social organizations (the “Regulations on the Management of Foundations,” the “Regulations on the Registration and Management of Social Associations” and the “Temporary Regulations on the Registration and Management of Private Non-Enterprise Units”), only the “Regulations on the Management of Foundations” contains provisions on overseas foundations establishing representative offices in China. This deficiency in the legal system has led to a number of problems. First of all, overseas NGOs have faced the question of their “legality.” The lack of a legal basis or a Professional Supervisory Unit hangs like a “Damocles’ sword” over the activities of many overseas NGOs who have not registered or filed documentation, encouraging the short-term nature of these activities and harming efforts to establish long-term cooperative relationships with partner organizations, as well as the healthy development of overseas NGOs. Secondly, the rights and interests of overseas NGOs are not guaranteed. Because the legal status of overseas NGOs is unclear, they are unable to make use of laws relevant to their financial assets, contractual agreements with partner organizations or labor relations between members of their staff, making it difficult to clarify the rights, obligations and responsibilities of the parties involved. Three, the conduct of overseas NGOs is insufficiently standardized. Next to the overseas NGOs acting responsibly, there are occasionally bad actors. The media has previously exposed NGOs engaging in price manipulation and fraudulent activities, and fears that these organizations might harm national security and society’s public interest are not completely unfounded.

Therefore, drafting legislation was necessary to clarify norms and define limits. It goes without saying that the goal of the “Law on the Management of the Activities of Overseas NGOs within Mainland China” is to regulate and guide overseas NGOs in carrying out activities in Mainland China, to guarantee their legal rights and to promote exchange and cooperation.

  1. Defining Overseas NGOs

Overseas NGOs as mentioned in the law refers to foundations, social groups, think tanks and other non-profit, non-governmental social organizations legally established outside of Mainland China. Compared to the second draft of the law, the scope of the final legislation has been significantly reduced. Remember, for instance, that the second draft defined overseas NGOs as “non-profit, non-governmental social organizations established outside of Mainland China.” The final law not only adds supplemental provisions to exclude overseas schools, hospitals, science and engineering technology research institutions or academic organizations, but also makes it clear that the legislation is mainly aimed at regulating overseas NGOs comparable to China’s social organizations. These social organizations mainly take the form of foundations, social groups and private non-enterprise units (soon to be renamed “social service organizations” in accordance with the new charity law).

Since the beginning of the Reform and Opening Period, nearly 10,000 overseas NGOs have carried out activities in Mainland China in areas ranging from traditional charitable activities, like alleviating poverty, helping the needy, supporting the elderly, providing aid for the ill and relief for disaster victims, to modern public welfare endeavors in education, fair trade, village administration, social enterprise and other areas. The new legislation is an affirmation of these activities, clearly defining the operational scope of overseas NGOs as including the areas of economics, education, science and technology, culture, public health, physical education and environmental protection, as well as helping the needy, providing disaster relief and activities in other areas beneficial to developing the public welfare sector.

What should be clear is that the concept of overseas NGOs extends beyond that of charitable organizations and includes not only organizations engaging in poverty alleviation, disaster relief and other charitable causes, but also mutual-benefit organizations.

  1. Basic Principles of Overseas NGOs Conducting Activities in Mainland China

  2. First principle: the principle of legal guarantee. Overseas NGOs carrying out activities according to the law will receive legal protection.
  3. Second principle: the principle of abiding by the law and respecting public order. Overseas NGOs must respect the law and must not harm national or ethnic unity, China’s national interest, societal public interests or the lawful rights and interests of other entities.
  4. Third principle: the principle of maintaining the distinctive characteristics of NGOs. NGOs have three distinctive features: they are non-profit, non-political and non-religious. Therefore, the law dictates that overseas NGOs must not engage in or fund for-profit or political activities, nor illegally engage in or fund religious activities.
  1. The Management System for Overseas NGOs

The legislation clearly makes overseas NGOs subject to the “dual management system”.

Overseas NGOs carrying out activities in Mainland China will be subject to the supervision and oversight of both the registration and management authorities, as well as the professional supervisory departments. The law clearly stipulates that the public security departments of the State Council and the public security authorities of the provincial level governments are the registration and management authorities of overseas NGOs carrying out activities in China. They are responsible for registering and carrying out annual inspections of the representative offices of overseas NGOs, filing the temporary activities of overseas NGOs, and investigating and punishing illegal activities of overseas NGOs and their representative offices; the relevant departments and units of the State Council and the relevant departments and units of the provincial level governments are the Professional Supervisory Units (业务主管单位) of overseas NGOs carrying out activities in mainland China and will give advice to overseas NGOs on establishing representative offices, changing registration and on the annual work report. They will also guide and supervise overseas NGOs and their representative offices in conducting activities in accordance with the law and assist public security authorities and other departments in investigating and punishing the illegal conduct of overseas NGOs and their representative offices.

In order to prevent “registration difficulties” caused by the difficulty of identifying Professional Supervisory Units, this law clearly dictates that the public security departments of the State Council and the public security authorities of the provincial level governments will publish a list of Professional Supervisory Units together with other relevant departments. This provision draws on lessons learned from the “Regulations on the Management of Foundations”, in the hope that publishing a list of Professional Supervisory Units will alleviate problems with the dual management system that had made it difficult for overseas foundations to identify Professional Supervisory Units and establish representative offices. Obviously, further clarifying that it is the responsibility of the government departments and relevant units mentioned in the list to act as Professional Supervisory Units for overseas NGOs would do even more to solve the problem of “registration difficulties.”

  1. The System of Registration and Filing

[The legislation] clarifies that there are two legal channels available for..read the entire document here

About Godfree

Visiting China and studying it since 1967. Interested in its culture, politics, education and economy.
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