‘In the spirit of’ the 18th Party Congress; another accounting scandal in a big charity


Karla Simon

Karla Simon

Karla Simon

Following the close of the 18th Party Congress in mid-November, there were a few developments suggesting that reforms for civil society are in the offing. Indeed, Professor Wang Ming, China’s best-known expert on CSOs, is very upbeat.

AIDS CSOs in meeting with Li Keqiang

It did not take much time for the new leadership to send out signals that were seemingly favourable to civil society.  Perhaps the most significant of these came in late November and involved CSOs working on issues of HIV-AIDS.

Shortly after becoming China’s ‘premier-in-waiting’, Li Keqiang met with leaders of AIDS CSOs and asked the Ministry of Finance to arrange a pilot programme that would give tax breaks to NGOs specializing in HIV/AIDS prevention, as part of the government’s attempt to reach out to grassroots groups to help fight the disease. ‘The promotion of institutional reform in society requires the participation of [all] forces of society,’ Li said at an inter-ministerial meeting on AIDS prevention toward the end of November, adding that reform in supporting NGOs’ work on AIDS prevention could provide lessons for broader social reform. Stressing that the role of non-governmental organizations in AIDS prevention ‘is an irreplaceable and unique force’, Li was reported by CCTV as telling the NGO representatives in a separate meeting that they “will be given greater space to play [their] role.”

Trip to Shenzhen by Xi Jinping

In addition, the first trip out of Beijing taken by the new party leader and upcoming president of China, Xi Jinping, after his elevation at the 18th Party Congress was to Shenzhen, the reform-oriented special economic zone in the south. This means that he is definitely seeking to project a reform agenda – certainly for economic reforms, but also for social and political reforms, according to commentators.

Expert meeting between Ministry of Civil Affairs personnel and academics

In this same vein, a meeting was held in mid-December with personnel from the Ministry of Civil Affairs and outside experts from various universities in Beijing and Shanghai.  The experts stressed the need for reforms in the way in which social organizations in China are regulated, and Vice Minister of Civil Affairs Gu Zhaoxi, who spoke at the meeting, stressed that he and others at the Ministry would heed the advice of the academic experts. This suggests that the policy the MCA has been pursuing in the recent past (lessening restrictions on registration while strengthening oversight and making social service outsourcing easier) has received the stamp of approval of the 18th Party Congress.

Outreach to South Korea

One of the critical elements in any reform process is to look for examples close to home that may be emulated. In that context it is good to note that there was a recent Sino-South Korean meeting on charity held in Beijing. At that meeting, Zhan Chengfu said that the Internet has become the preferred platform for China’s charity organizations to promote projects and for the public to offer support. Zhan is the head of the social welfare and charity promotion department under the Ministry of Civil Affairs. He also suggested that China’s charity sector has entered a critical period in terms of modernization, and the country will further legislation efforts to facilitate the sector’s development.

On a less good note…

In early December was a repeat of the 2011 problems with accountability for large charities. A recent disclosure of accounting problems at a major children’s charity affiliated with the government has once again resulted in soul-searching about the willingness of China’s major charities to seriously attack accountability issues. According to a story in the South China Morning Post, experts were quoted in the following manner:

‘The Legal Daily said in commentary that such an accounting error was inexcusable, disrespectful to donors and a threat to the credibility of all charities. “Even it’s a blunder with a decimal point, it’s without a doubt no small mistake as it exposed how flawed the accounting systems at some of our charitable organisations are,” the paper said.

‘Professor Deng Guosheng, who heads Tsinghua University’s NGO Research Centre, told Xinhua that mistakes on the foundation’s accounting reports show how little mind mainland charitable organisations pay to disclosure. “It also demonstrates that much more needs to be done to regulate them,” Deng said.’

Karla Simon (奚文雅) is professor of law and director of faculty development at the Catholic University of America and has worked in China for over 16 years

Tagged in: Accountability China CSOs regulation

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