Karla Simon

As I said recently during a workshop in Beijing, 2011 was really a remarkable year with respect to developments affecting civil society. 

The year began with the propaganda department of the government saying in January that ‘civil society’ was a forbidden term for use by the media. And it ended with two important events involving CSOs.

• The first was the indication that new regulations allowing as many as eight types of CSOs to register without separate sponsoring agencies would be promulgated in Guangdong Province (see my 30 November 2011 blog post).

• The second was the announcement by the Minister of Civil Affairs Li Liguo on 23 December that the ‘Guangdong experiment’ should be implemented in other parts of the country, which probably presages the issuance of national level regulations implementing the new process for registration.

This change in attitude toward CSOs and what they represent for China was an about-face of major proportions. Thus, while there are still some who warn that China must not try to replicate Western-style civil society, most people – even those in government – seem ready to embrace civil society ‘with Chinese characteristics’.

These events bracketed other developments signaling that reforms are coming. They included the registration of the One Foundation, a public-fund-raising but privately funded (by movie star Jet Li) foundation in Shenzhen in January. In addition, according to the Ministry of Civil Affairs (MCA) and the China Foundation Center, the number of private foundations (in other words, the ones funded by private capital) for the first time exceeded the number of public ones (those older ones associated with government, such as the Red Cross Society and the China Charity Federation) by the end of 2011. Finally, an experiment in Beijing started in June, which involved using the local MCA bureau as both the registering and oversight body resulted in more CSOs being registered there than in previous periods. (As of the end of the year there were approximately 449,000 registered CSOs in all of China, an increase of 9,000 over the previous year-end total.) These facts suggest that the government recognizes the need to loosen the current ‘dual management system’ to make it easier for at least some CSOs to gain legal existence. (It is also worthwhile noting some promising developments in Shanghai and Nanjing chronicled by Shawn Shieh.)

On the other hand, scandals in the charity sector set off a serious inquiry into what information should be made available to the government and the public about charity finances and activities. Some of these have been discussed in previous blog posts. The response of both the government and the sector has been to adopt stricter rules for such things as disclosure of donations, audits of the books of foundations (the new audit rules promulgated by the Ministry of Finance and MCA were announced on 30 December), and self-regulatory mechanisms. The China Charity Federation, under the auspices of the Ministry of Civil Affairs, is working to establish a donation disclosure platform. According to the People’s Daily: ‘CCF and more than 300 member organizations will disclose information such as donation amount and the usage of the donations on the China Charity News twice a year, in the middle of and at the end of each year, respectively’.

The Shanghai municipal government is also working to pass its own regulations, which may include fines for charity organizations that do not disclose their finances, and a declaration that fund managers must return donations collected in an illegal manner and will face penalties of up to three times the value of the illegal collections. There seems to be a sense that these efforts need to be guided by the government in China, because of a lack of capacity within the sector.

A motivating factor in the ramping up of reporting and governance reform efforts has been an 86.6 per cent (!) drop in donations to national charity organizations over the six months following the first scandal involving the Red Cross Society of China, which was featured in the press and on microblogs in June according to statistics released in early December by the Ministry of Civil Affairs. Peng Jianmei, director of the China Charity and Donation Information Center (CDIC), said that the drop in donations is ‘not official’. According to reports in the news media, the official figures are not expected to be released until April or May. An in-depth discussion of these the relationship between the scandals and the lack of charity transparency can be found on the Xinhuanet English language website.

People’s Daily reported that the China Charity Transparency Report (2011), published on 29 December by the CDIC, found that only 8 per cent of 1,063 netizen-interviewees were satisfied with the information transparency of charities in China. Seventy-six per cent of them said they had never received any information from any charity organization, according to report. As to financial information, which the public cares most about, only 3 per cent of interviewees said they had received it. The CDIC began to develop the charity transparency index system in 2009 and has published charity transparency report annually since then. Officials from the China Charity and Donation Information Center said that a number of indicators have been set up for the monitoring system, based on the following four aspects of charity information disclosure: integrity, timeliness, accuracy and convenience for public access.

One probable result of all the pressure on charities is that the proposed Charity Law, now on the legislative agenda of the Standing Committee of the National People’s Congress (NPC), will finally move forward. The intention appears to be to have discussions of it during 2012 and to bring it to the NPC for a first reading in March 2013. This information comes from some fairly authoritative sources at both MCA and at the Law Commission for the NPC.

In the coming year the development of civil society in China will probably also benefit from the determination of the government to reform public institutions and outsource social services to CSOs. Both of these issues were raised in the newest five-year plan for civil society, and they keep coming up in official speeches about what will happen to the sector.  And they also were addressed in a major white paper on poverty alleviation through development reform issued by the State Council in the fall of 2011.

All of the indications of pending reforms could be quickly stopped, of course, if social unrest gets out of hand and the security interests of the state take control. The settlement of the Wukan incident with political concessions made to the villagers – including the firing of local officials – suggests that the regime is trying to figure out how to avoid such flare-ups in the future and to moderate dissent before it turns into a full-scale protest. But in a year in which China’s top leadership is due to change, things are more tense than usual, and any glimmerings of too much dissent and unrest could dampen forward progress in the regulatory environment for CSOs.

Karla Simon (西 门 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