Civil society events make headway but China still needs to develop trust in CSOs

 

Karla Simon

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Karla Simon

Karla Simon

I was honoured to be invited to speak at two events about civil society in China held during the Mid-Autumn Festival this month (when one consumes lots of mooncakes at family gatherings held throughout China to celebrate the harvest moon). The first was the Social Good Summit held in conjunction with the Charity Fair in Shenzhen; the second was a seminar about public service reform held in Beijing. In addition, alarming statistics about charitable giving were announced by the China Charity Information Bureau at the end of the week.

Charity Fair, Social Good Summit and Shenzhen Charity Legislation Event

Shenzhen’s Charity Fair is an amazing event, with hundreds of exhibitors. For the first time this event was international in scope, which meant that foreign organizations, such as China Development Brief (English), the Asia Foundation and the Bill & Melinda Gates Foundation were among the exhibitors. Because of new sponsorship by UNDP, the inclusion of the many foreign exhibitors is a sign of the sector’s growing awareness of its international linkages. The event is held in Shenzhen’s massive and modern Convention Center, which is in the heart of downtown, nestled between soaring and colourful skyscrapers. It is a two-day event, but was slightly extended for some because of the arrival of Typhoon Usagi, one of the most massive typhoons to hit southern China in dozens of years.

The Social Good Summit was a bit more sober than the fair itself, with three panels over the course of the day focusing on the relationship of communications to civil society (and CSOs themselves); business and civil society (the growing importance of CSR in China); and the legal framework for CSOs. In particular the business roundtable event was interesting because speakers included representatives of various businesses, such as HSBC, that actively promote their CSR programs. The variety of projects tackled by companies such as HSBC and Alibaba is simply staggering. In addition, Amy Neugebauer of Ashoka addressed issues of social entrepreneurism.

The panel on how laws support philanthropic giving consisted of two Chinese speakers – Yang Tuan of the Chinese Academy of Social Science (CASS) and Chen Yimei, former director of the Mercy Corps program in China. They looked at possible reform trends in the legal framework and exhorted the government to move more quickly on direct registration.

The two English-language speakers, Shawn Shieh (of CDB (English)) and myself, focused on a different issue – the mismatch of China’s foundations and grassroots organizations. Shawn presented some of CDB’s recent survey on China’s grassroots organizations (available on the CDB (English) website). He emphasized that from a practical standpoint foundations may find it difficult to find CSO projects that correspond entirely with their purposes and funding activities.  This makes it difficult for them to find projects to fund.

My emphasis was on the lack of trust between foundations and grassroots CSOs. To my mind this stems from three things: a lack of clearly defined fiduciary responsibility rules for directors and managers; barely articulated conflict of interest policies; and a failure to be adequately specific about the non-distribution constraint. I said that in my view China’s foundations will begin to trust grassroots CSOs more fully and thus be more willing to give them money in the form of grants when these things are present in the current legal regime. I suggested that the Chinese consider sending a team of people abroad to discover essential aspects about how these problems have been addressed in some other civil countries, such as Japan and Germany.

The next day a session was held at the Charity Fair to discuss the Shenzhen charity legislation developments. Prof. Mark Sidel of the University of Wisconsin spoke at this event. A write-up (in Chinese) is available here.

Public institution reform

The Seminar on Systems and Reform of Social Public Services, held in Beijing on 22 September, was sponsored by the State Commission on Public Sector Reform and its research arm, the Chinese Society for Public Sector Reform (CSPSR). The main themes in the afternoon sessions were health sector reforms, education sector reforms, and how the public sector reforms (reform of public institutions or shiye danwei in Chinese) will cope with CSOs. This relates to issues I have discussed in this blog in the past: the potential for state downsizing accompanied by outsourcing of social services to CSOs.

The keynote address by Dr. Huang Wenping, President of CSPSR, was exceptional and opened the conference by stressing what it intended to accomplish. He set the agenda and prepared the ground for what was to come with a thorough analysis. In the morning these issues were discussed more generally by Chinese participants, and there were also presentations on similar developments in such places as Australia (Prof. Andrew Podger of ANU) and Germany (Prof. Stephan Grohs of University of Konstanz).

Focusing on more specific issues, the Chinese speakers, such as Prof. Li Ling from Beijing University, made clear that a ‘one-size-fits-all’ formula will not work for all public healthcare institutions in China. Prof. Dong Keyong from Renmin University emphasized the difficulties faced by the tertiary education institutions, which are so heavily dominated by Ministry of Education ‘guidance’ (or what one might call ‘control’).

Looking specifically at how the topic relates to CSOs, two speakers were exceptionally trenchant: Prof. Wang Ming of Tsinghua University and Deputy Director General Liao Hong of the Ministry of Civil Affairs (MCA). Prof. Wang gave both general remarks in the overall views during the morning session and commented at length during the specific afternoon session related to CSOs. He praised the government for its efforts to address these issues but stressed the need for caution going forward. He also said how important it is to get practical feedback from the institutions involved, not just from theorists.

Prof. Wang Ming’s larger theme was how important social sector reform is in the face of societal needs in China at this stage. The necessary economic reforms undertaken under Supreme Leader Deng Xiaping and later under Zhu Rongji (who eventually succeeded him as Premier) during the last century (note: see Zhu Rongji’s On the Record, which just came out in English). Prof. Wang stressed that now social sector reforms will help China face challenges it faces as it seeks to become a modern, 21st-century country.

DDG Liao Hong thanked the CSPSR for involving MCA in this, its second conference on the subject. He outlined what MCA is doing to make it possible for CSOs to be good recipients of outsourced social services. There will be ten various reforms in the overall legal framework for CSOs by the end of 2013. Among them are firming up the direct registration rules for certain types of CSOs, improving internal corporate governance standards for them, making a more sustainable reform in tax preferences, and creating new rules for the registration/recognition of foreign CSOs. These are extremely important if the sector in China is to grow into a more mature sector over the course of the next 15 to 20 years.

Most of the papers by Chinese speakers are available in both Chinese and English and some will be posted to the ICCSL website when we receive permission to do that.

China Daily’s reports on the drop in charitable donations during 2012

The China Charity Information Bureau comes out each September with annual statistics on various aspects of charitable giving. The ones from 2012 are particularly depressing (see Editorial, China Daily for September 23, 2013). Not only was the overall level giving down, but also some of the specific issues teased out by the paper are disheartening:

  • Giving by Chinese companies (including large SOEs) pales in comparison with giving by foreign companies, despite the fact that SOEs are far more significant economically then foreign-owned entities;
  • The Red Cross (supposedly China’s largest, but certainly its oldest, extant charity) continued to suffer from diminished donations because of a lack of trust following the 2011 Guo Meimei scandal and other more recent developments with respect to lax governance; and
  • The typical Chinese citizen still lacks trust in CSOs.

Against this rather gloomy backdrop, I could not help but wonder to what extent major public events such as the now annual Charity Fair might begin to turn things around in the coming years. There is certainly a lot to be done to instill more trust in charity organizations among the companies and citizens of China.

Karla W Simon (西 门 雅) is Research Professor of Law at the Catholic University of America’s Columbus School of Law. She splits her time between Beijing and the Washington, DC area.

Tagged in: Charitable reform China Civil society CSOs


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