In the past thirty years, China’s exponential economic development can be largely attributed to huge quantities of foreign investments. However, not all Western practices in China are met with open arms. Foreign NGOs have had a particularly difficult time registering themselves in mainland China due to the ambiguity of laws and regulation in China’s NGO sector. Hopefully, this phenomenon will start to change with the Overseas NGO Management Law that will go into effect on in January 2017. This new charity law is the Chinese government’s first attempt to establish a clear legal framework to regulate hundreds of currently unregistered foreign non-profit groups. However, the new legal framework has already received criticism because it imposes stricter rules on foreign non-profits while doing nothing to advance the establishment of rights groups in China, many of which are deemed by the Chinese government to have politically sensitive agendas.
Under China’s Overseas NGO Management Law, foreign NGOs and Nonprofit Organizations (NPO) will undergo an easier registration process. However, they are still only permitted to register their offices for five years before having to submit another application. All projects must be approved by district authority after an activity plan is submitted. No more than 50% of the staff can be overseas personnel. The most debilitating provision of the new law is its prohibition on public fundraising or applying for government grants. Securing sponsors from private firms can pose challenges as well, since NGOs and NPOs cannot issue tax-deductible invoices as a receipt of their donations, which is a prerogative for local charity organizations. The lack of means of fundraising and incentives for sponsorship significantly limits the development of foreign NGOs and NPOs in China.
The process of registering as local organizations is difficult for NGOs and NPOs with foreign founders as well. In my internship with Stepping Stones China (SSC), a non-profit organization dedicated to providing free English lessons to children of low-income, migrant workers, I learned firsthand about the difficulties SSC faced in setting up their practice in mainland, China. SSC was registered in Hong Kong for two years before successfully registering another office in Shanghai, where the organization’s daily operations take place. “Even after managing to register a non-enterprise organization in 2013, [Stepping Stones China] could only be a local organization…The hiring of foreign staff, appointment of foreign board members and receipt of donations from overseas was discouraged [or] prohibited, though [there are] no clear regulations on this. ” said Corrine Hua, the founder and director of Stepping Stones China. With the Overseas NGO Management Law, hundreds of currently unregistered foreign charity groups will have to partner with local organizations if they want to be approved by Chinese governmental agencies, who are responsible for examining the objectives of these groups and their projects under strict scrutiny.
While the new law will push towards all service-based foreign NGOs to be registered in China, rights groups that operate within China are still unable to be formally recognized as organizations, due often to the politically sensitive nature of their practice. The government is still suspicious of the motivations of foreign groups that want to become a part of China’s civil society. Unlike many Western societies, which consider political, legal and religious organizations the foundation of an independent civil society, China’s strict censorship policy only approves of NGOs and NPOs that are completely free of any political agenda. In addition, not only does China’s charity law not permit spontaneous assemblies, it implements excessive restrictions on time, manner and place of any assembly requests. Coupled with the limitation of right to free speech, China’s Overseas NGO Management Law does nothing to strike down barriers for advocacy groups. Some predict that local governments are likely to use the law’s provision that reads, “Charitable activities…must not violate social morality or endanger national security,” to justify its ban on projects of certain foreign advocacy groups. The new legislation seems to be a step in the right direction, but the future remains uncertain for charity in China.