Karla Simon

February was another very busy month for civil society in China.  The developments were in several areas: tax exemption, direct registration, implementing regulations on cancellation of the branch registration requirement for national social organizations, procurement of social services, volunteering, and community organizations.

There was also an interesting development at the national level, with China’s President Xi Jinping speaking at a Communist Party work congress about the China’s “new governance,” and the roles that “social organizations” are to play in it. The term “new governance” has been bandied about quit a bit recently, and one expects that it will also be used at the upcoming “two big meetings” (of the National People’s Congress (NPC) and the Chinese People’s Political Consultative Congress (CPPCC)).

Tax Exemption:
On January 29 the Ministry of Finance (MoF) and State Administration of Taxation (SAT) issued a new circular – Cai Shui [2014] No. 13 — on tax exemption requirements for CSOs. While not differing significantly from the one issued in 2009 (available here), it cancels that one and is now the applicable set of rules.  The principal difference is that it permits the charitable and public benefit activities to be conducted outside China.  This is salutary in that many Chinese CSOs are now working across borders, e.g., environmental CSOs in Myanmar.  The new one posted on the English language ICCSL website and is available here and on ICCSL’s Chinese language website is here.

Direct registration:
1. There have been several announcements of the passage of direct registration regulations (Henan and Hubei). These were passed during the recent meetings of local people’s congresses throughout China.

2. An informal communication from the Ministry of Civil Affairs (MCA) also clarifies an important point.  Although many provinces and self-governing municipalities have not yet adopted such regulations, Liaoning, Heilongjiang, Guangxi, Chongqing, Guizhou, Qinghai, and Ningxia are in fact already directly registering social organizations (presumably the 4 permitted types). Only Inner Mongolia, Tibet, and Xinjiang do not directly register such entities.  The latter two areas are very unstable, so it is unsurprising that they have not felt confident to register any social organizations without an oversight entity.

Implementing regulation on cancellation of branch registration requirement for national social organizations:
On May 11, effective June 8, 2013, the State Council announced that it would no longer be necessary for national social organizations to receive permission to register branches they set up throughout the country. (Guo Fa [2013] No. 44).  MCA has now issued implementing regulations for this policy (Fa [2014] No. 38.  It clarifies and updates the manner in which the national regulations are to be applied. Significantly it says that the branches do not have legal personality, making it unnecessary to have articles of incorporation, etc. for them.

Procurement of social services from CSOs:
1. It is understood that, in addition to the already introduced national policies, Shandong, Hebei, Hubei, Anhui, and other places are also promoting the government procurement of social services.  According to the Institute of Public Institute of International Relations Deputy Director, Zhao Yong, in fact, MCA is most active in promoting this policy, rather than the MoF.  MCA introduced the “Guiding Opinions on Government Ministry of Civil Affairs to buy social work services” in 2013 to promote social development organizations.  For more on the general policy, see here.

2. In addition, MCA announced that it has been awarded money on the budget of the central government to support community services by CSOs (Letter 2014/no. 30).

3. Local procurement regulations were published for Shaanxi Province; for more see here.

Volunteers:
1. The “China Social Services volunteer team building Guidelines (2013-2020),” have been issued. The announcement also says that China will further accelerate the development of social service volunteering, and strive by 2020 to have 10% of residents registered as social service volunteers.

2. Vice minister Pu Gong, accompanied by Bureau Chief Wang Jianjun, visited the Volunteers Association on February 21 and sought to encourage their outreach to attract more volunteers.  See here.

Community Organizations:
In an apparent first, the Chongqing People’s Congress has passed a “Village Committee Organization Law.”  The intention is to alleviate the (community) workload at the village level and improve governance.  For more see here.

Karla W Simon (西 门 雅) is chairperson of ICCSL