Karla Simon

Instead of blogging this month on self-regulation (a topic to which I will return in 2012), it is important at this juncture to discuss a very significant development. At a party working conference held at the end of November in China’s Guangdong Province several important civil society issues were discussed, including reducing restrictions on registration and social service outsourcing. Guangdong Province’s Communist Party Chief, Wang Yang, linked the two in one of his speeches. After the conference was over a new notice on loosening entry barriers for CSOs was posted to websites in the province. A new provincial development setting out a new policy, you say, so what’s the big deal? It was such a big deal that it was featured (with analysis) in the Legal Daily, a national Communist Party (CCP) newspaper, and the story was picked up by virtually every large newspaper in China and the South China Morning Post in Hong Kong. It also appeared on the national Ministry of Civil Affairs (MCA) website and numerous provincial civil affairs bureau websites.

The card carried by the heart says 'Registration' and the other text says 'public welfare types organizing'.

For people who do not know China well (and perhaps even for some who do but are not long-term civil society watchers), the significance of the new policy can be discussed from several angles. The first of these is the government’s long-standing antipathy to independent civil society – something that amounts to a fear of independent organizations. That is certainly not going to change under the new policy. There will not be a burgeoning of activist organizations advocating for change all over China. The range of organizations that will be able to avail themselves of the new rules is, on the other hand, fairly broad, as discussed below.

It is also important to note that the developments in Guangdong were blessed at the highest levels of the Ministry in Beijing and also apparently had CCP backing in the form of Wang Yang’s endorsement mentioned above. What that means is that the government and the party are finally making more concrete their decision to partner with civil society organizations for the greater good of the Chinese people. The tendency to use slogans such as ‘small government, big society’ has required real implementation through CSO-friendly policies, as is now being accomplished.

Another way to view this is to look at the manner in which the Chinese government puts into practice major national level reforms. As I have written elsewhere, experiments with changes in registration policy have been conducted in various cities, including Shenzhen, which is located in Guangdong Province. But this is a very clear, concise and far-reaching set of new rules that the Legal Daily calls ‘more comprehensive and thorough’ than other local rules, such as those in Beijing adopted over the summer. Thus, it can serve as an experiment on which to base the reforms in national regulations.

Finally, Legal Daily draws the correct linkage between the charity scandals of 2011 (involving the Red Cross, the China Charity Federation and the Henan Soong Ching Ling Foundation that I blogged about previously) and the need to further strengthen oversight by regulatory and tax authorities. This is a clear response to those scandals and is not unexpected. Interestingly, the Guangdong Province charity guidelines, which are currently being considered for adoption and have been put out for public comment, address these exact issues.

The major developments in registration policy are as follows:

1. The new rules apply to industry associations, chambers of commerce with cross-border affiliates in Hong Kong and Macau (this is true of most chambers in Guangdong, which borders the two special administrative regions), organizations performing public service or charity services and community services, and organizations in the fields of economics, science and technology, sports and culture.

2. The need for a sponsor is eliminated for CSOs with two legal forms – social organizations and private non-enterprise units (fee-charging NPOs, such as private schools). The Ministry of Civil Affairs will be both the registering and oversight agency for all of them. The old sponsor agency is to become an ‘adviser’ to the CSO.

3. The restriction on having only one entity performing a service in any given locality is eliminated.

4. The time for evaluation of a registration application is reduced from 60/30 days to 20/15 days (depending on the type of organization).

5. Barriers to entry for urban and rural grassroots organizations are reduced.

6. In some instances, initial endowment requirements and minimum numbers of members are reduced.

There are also a few additional changes, such as reducing fees for applications, making online applications easier, reducing time frames for replacement registration certificates, etc.

The province’s new policies will go into effect on 1 July 2012. But Guangzhou City, the capital of the province, has released guidelines that come into effect at the beginning of January (presumably to help work out any problems so that adjustments can be made to the provincial rules). Foshan City is also working on similar rules.

The provincial officials had visited Beijing earlier in November to seek advice and support from the national Minister of Civil Affairs, Li Liguo, and the Director of the CSO Bureau within the Ministry, Sun Weilin. Both apparently expressed their strong approval for Guangdong’s reform efforts and noted that the reformed process can provide useful experience for the revision of the national regulations by the State Council, which have been on the drawing board for some time.

While this is a break-through, it comes about in large part because there are so many unregistered CSOs in China. The estimate of registered organizations is around 440,000, while the unregistered ones number as many as 3 million. Many of those register as businesses, and receive very little oversight by the business registration authorities. This obviously chaotic situation is one that the government would like to resolve. Having CSOs on the books rather than off makes it easier to do business with them as well as helping to government keep track of what they are doing. And the new rules apply to a wide range of organizations, which suggests that every effort is being made to cast the net in such fashion as to bring many more under legal oversight by MCA.

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