China: The Overseas NGO Management Law returns, with a new strategy

 

Mark Sidel

2

China’s National People’s Congress, through its Standing Committee, will take up the much-attacked and long-delayed bill to regulate foreign NGOs, foundations and foreign non-profits and bring them under the control of Chinese internal security agencies at its next meeting, which begins on 25 April.  Internal Chinese deliberations on the Overseas NGO Management Law have been very closely held since a comment period ended in June 2015 with hundreds upon hundreds of critical comments from domestic and foreign organizations.  Next week the Law may be enacted, or discussed and then put over for further drafting.

But in recent days the Chinese government and its controlled press have opened a new line of attack, in an apparent attempt to convince legislators, the public and other sceptics of the need for omnibus legislation to control overseas NGOs, foundations and other non-profits that operate in China.

This sortie began quietly, on 16 March, when the Chinese Ministry of Civil Affairs ‘exposed’ a list of 203 ‘offshore’ and ‘fake’ non-profits, all registered overseas and often active in China, and the vast majority utilizing the name ‘China’ or ‘national’ in their titles.  The Ministry said these were organizations that seek to take advantage of ‘the gap between domestic and overseas registration systems’ and to raise money or charge for activities in China.

This move, while new for the Ministry of Civil Affairs – which had last convened a public meeting on the problem of ‘offshore’ and ‘fake’ Chinese NGOs registered overseas in July of 2013 – was little noticed in mid-March. That changed quickly. On 25 March, the Ministry released its ‘second batch’ of offshore and fake organizations, bringing the total to 213. Twelve days later, on 6 April, a third batch was released, with the total number of organizations potentially swindling and defrauding domestic donors now reaching 228. And then on 19 April, six days before the Standing Committee of the national legislature is to begin meeting with an agenda that includes the Overseas NGO Management Law, a new list, officially called the ‘fourth batch’, brought the listed total of ‘offshore’ and ‘fake’ groups to 328, all helpfully listed on the Ministry of Civil Affairs website.

By then, coverage of this ‘exposure’ of ‘offshore’ and ‘fake’ NGOs had expanded in the Chinese press. But little doubt was left when the online version of the People’s Daily – the primary Party-controlled newspaper – weighed in on 21 April, publishing a lengthy commentary from another Beijing newspaper on the offshore groups, decrying their potential to swindle Chinese donors and misrepresent China, their lack of regulation in China and abroad, and calling for stricter controls.

‘There needs to be a process for the “offshore social organizations” to put themselves on the record, so that they can justify their activities, and so that civil affairs departments can bring them under management,’ one academic was quoted as saying. The commentary then pointedly and helpfully noted: ‘The Overseas NGO Management Law is currently in its third reading [at the national legislature].’

There are several interesting elements here. In 2014 and early 2015, the rationale for comprehensive legislation to control foreign NGOs, foundations and other non-profits and to bring them under the overall control of the Ministry of Public Security focused on the work of foreign NGOs and foundations in China, not the ‘offshore’ and ‘fake’ Chinese groups.

Changing the focus to the offshore and fake organizations that use the terms ‘China’ and ‘national’ – highly sensitive and regulated words in China – seems clearly intended to ratchet up support for new legislation that would control the activities of such groups in China, as well as the legitimate foreign groups too, in a way that will build broader support for the legislation while avoiding the storm of foreign criticism that greeted the draft law last year. Foreign foundations and NGOs operating in China have little interest in the Chinese groups abroad, and no one has any strong reason to oppose the regulation of potentially fraudulent activities.

Other developments in China in recent years are likely to strengthen this strategy. Fraud in the charitable sector – particularly in large, government-affiliated organizations like the Red Cross Society of China and the China Charity Federation that use the terms ‘China’ or ‘national’ – have been major scandals in China. This new tack takes advantage of the widespread anger at charity fraud by government-tied groups through implicating a range of groups registered abroad using words like ‘China’ and ‘national.’

Nationalism is being brought to bear as well. The portrayal of misuse of words like ‘China’ or ‘national’ for fraudulent gain by under-regulated groups abroad to fleece Chinese donors and confuse organizations in China is a real issue, but it is also clearly intended to stoke nationalist spirit, an attempt to build on the public nationalism that has been strongly encouraged in recent years by the Party and state.

Finally, much of the earlier attention was focused on the new role of the Ministry of Public Security as the overall controller for foreign NGOs, foundations and other non-profits in China, a role it was assigned by the Chinese National Security Council in the fall of 2014. The new tack seems to bring the Ministry of Civil Affairs – long regarded as more friendly to foreign groups – back into the picture. Will the revised Overseas NGO Management Law once again give a role to the civil affairs system that was taken away in late 2014?

We do not yet know what will happen at the National People’s Congress Standing Committee next week – the Overseas NGO Management Law may be passed in revised form, or it may be discussed and put off again. The thousands of overseas NGOs, foundations, universities, trade associations and other non-profits that operate in China will be watching with great interest – and no little anxiety.

Mark Sidel, University of Wisconsin-Madison and International Center for Not-for-Profit Law (ICNL).

For more on this, read ‘Permissive or restrictive? A mixed picture for philanthropy in China.’

Tagged in: philanthropy in china


Comments (2)



Leave a Reply

Your email address will not be published.