While there have been other recent developments that are relevant to this blog, they all pale in comparison with the one part of the Chinese government’s government restructuring plan that affects civil society. As part of this far-reaching plan, the highest level of the party-state has announced that the Ministry of Civil Affairs (MCA) is to work with the State Council to implement new regulations for the registration of not-for-profit organizations (NPOs).
The general outline of the implementation of the policy is as follows:
1. Two different types of organizations – trade associations and chambers of commerce – are to be permitted to register directly and engage in market competition.
2. Other types of organizations will also be permitted to register directly: those engaged in training activities, commerce and technical activities, charitable activities and public benefit activities, and those involved in the provision of urban and rural services; they do not require any other inspection or authorizations.
3. ‘Political, legal, and religious’ organizations do not come within the new regime. The former two are said to be ‘problematic’, while religious organizations have their own registration regime entirely.
4. The entire system of registration and management is to be clarified and modernized.
There are several reasons for this, according to the plan – the principle established at the 18th Party Congress in the autumn was that there should be the widest participation of all persons and NPOs in managing national, social, economic and cultural affairs. Accordingly, government should be separated from the business of social organizations. The plan says that many social organizations ‘already conduct business without being registered, and their administrative structures are not suited to the needs of developing the scope of social organizations’. Click here for a write-up of the plan in English.
Impact of the new policy on development of new regulations
The ministry has clarified that the regulations will need to be re-drafted to ‘reflect this new high-level policy’. According to an unofficial statement, it is hoped that the State Council will adopt new regulations ‘before the end of the year’.
Charity law developments
While this has not been discussed publicly, it can also be assumed that the new policy will require that the proposed charity law either be revised (in order to reflect the new policy) or alternatively that it will be speeded up for consideration by the NPC. It is clear that without the filter of a sponsor unit to decide whether an organization is a ‘charity’, the law will require MCA to do so. The new policy clearly states that there is a distinction between public welfare organizations on the one hand, and charities on the other. The law will need to cope with this distinction and clarify the rules with respect to the latter, which must be applied by MCA. One of the serious procedural issues to be decided is how a charity is certified as such.
There was some discussion during the NPC meeting of the imposition of a ‘charity tax’, an issue that was raised by Zhou Sen, an honorary vice president of the China Charity Federation and a representative at the NPC. He claimed that this would be a necessary measure, but his posting on the Chinese version of Twitter was met with a firestorm of criticism. The proposal was disavowed by both the China Charity Federation (CCF) and the ministry, and the CCF publicly stated that Mr Zhou did not speak for it. Click here to read more.
Recent public statements suggest that there is much that still needs to be done to create more public trust in charity, and especially in the large GONGOs that suffered from so many scandals beginning in 2011. For example, the executive vice president of the Red Cross Society of China, Zhao Baige, admitted in an interview early this month that ‘public trust cannot be recovered in a short-run’. This suggests that the charity law will receive close attention. Whether it will be the panacea that some predict remains to be seen.
Karla W Simon (西 门 雅) is Research Professor of Law at the Catholic University of America’s Columbus School of Law