Karla Simon

A colleague of mine recently commented that the Chinese government seems to be determined to do all it can for opening space for civil society right here and right now! It is difficult to keep up with everything for this blog, but I will do my best.

April and May have been months filled with developments. On 24 April the Ministry of Civil Affairs (MCA) released two major documents – one was a draft set of ‘normative rules’ for public fundraising foundations that are expected to provide the legal underpinnings for disclosure and other guidelines that were finalized in December 2011. The draft was provided for public comment, and the comment period lasted until 3 May. It deals with issues of transparency and accountability and envisions new reporting procedures for public fundraising foundations. More information will be provided once these regulations are finalized. They are not intended to be a substitute for the foundation regulations (one of the three or san tiaoli) pending at the State Council.

Also on that day MCA released the results of a competition for outsourced funds for social services from a special 200 million RMB (US$31.7 million) fund administered by MCA. The awards made were aimed at reaching CSOs in the Western areas and almost 70% was allocated there. While many of the recipients were the traditional GONGOs, it is clear that some of them are expected to use the funds to build capacity for grassroots CSOs. As suggested in last month’s blog, this is an important step taken toward shrinking the size of government. MoCA also noted in private conversations that an additional 150 million RMB has been set aside for a competition that will be administered through the Chinese Academy of Social Sciences, presumably for social research on the sector.

In early to mid-May there were several additional policy changes and announcements. One was the press conference held to announce the China Charity Fair, to be held in Shenzhen from 12 to 14 July. Announced at a Beijing press conference, it has been dubbed China’s No. 1 charity fair; it is co-organized by the Ministry of Civil Affairs, the state-owned Assets Supervision and Administration Commission of the State Council, the All-China Federation of Industry and Commerce, and the Guangdong and Shenzhen governments. The exhibition will cover 15,000 square metres and will feature forums, charity festival celebrations and online exchanges.

‘The fair will showcase China’s latest achievements, innovative social construction and management. It will serve as a platform for the exchange of charity resources, promote the development of charitable organizations and enterprises, and open new channels for the public to participate in charitable activities,’ Shenzhen Mayor Xu Qin said at the press conference.

Of considerable note with respect to the press conference and the Q&A after it were three items mentioned by Minister of Civil Affairs Li Liguo and picked up by the press. One was the significant decline in the amount of money contributed to charity in 2011 – a 20% reduction by year end, with all of the information recently collected and available to the China Charity and Donation Center. Minister Li made clear that changes in charity governance must be made to ensure that scandals like the Guo Meimei link to the Red Cross do not occur, thus preventing the trend from continuing.

Another important point was that all CSOs will be permitted to directly register with MCA, including ones engaged in ‘political and human rights’ work. Minister Li said specifically that if such organizations are involved in social and economic development, they will also be permitted to register directly.

The final point was also important because he addressed an anomaly in the current regulations that permits a locally registered foundation to raise money only in the locality in which it is registered. Controversy has arisen because the One Foundation, registered in Shenzhen, raises money throughout China through web platforms. Minister Li said specifically that the new foundation regulations will solve this problem. Click here for more on the press conference and Minister Li’s statements in the Q&A period (in Chinese).

The issue of direct registration of CSOs is quite significant as MCA moves toward advancing this as national policy. Accordingly, a large-scale meeting was held in Tianjin on 11 May to discuss and exchange views on different practical experiences with registration of CSOs. MCA officials from provinces and municipalities throughout China attended the event.

In another development, the Ministry announced a ‘second batch’ of nationally registered foundations that are qualified to issue tax deduction receipts pursuant to special rules issued in 2008 and 2010. The new group numbers 114 and includes private foundations as well as public ones. This brings the total to 120, with six having been announced previously.

Meanwhile, the wait for the promulgation of the three regulations continues and probably will for some time as the higher echelons of the Party sort out issues having to do with Bo Xilai and Chen Guangcheng. What was already a highly-charged political atmosphere, with the upcoming change in leadership in October, was clearly made more difficult as a result of these two eye-catching events.

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