Thursday, April 13, 2017

ICNL's Philanthropy Law Reports for China and 8 other countries now available

The International Center for Not-for-Profit Law (ICNL) recently released Philanthropy Law Reports (http://www.icnl.org/research/Philanthropy%20Law.html) for China and eight other countries. This is good news for those looking for a single source providing a comprehensive, up-to-date and accessible guide to the legal framework for foreign and domestic philanthropic, nonprofit organizations and activities in China. The China report covers the most recent legal changes including implementation of the Charity Law and Overseas NGO Law up to January 2017. ICNL plans to keep the reports updated and plans to develop more concise and accessible ways of highlighting key information in the reports. Below is the table of contents for the China Report.

Contents

I.       Introduction.........................................................................................1

II.  Recent Developments.................................................................................3

III. Relevant Laws...........................................................................................6
     Constitutional Framework..........................................................................6
     National Laws and Regulations Affecting Philanthropic Giving...............6

IV. Analysis....................................................................................................11
     Organizational Forms for Nonprofit Organizations..................................11
     Registration of Domestic Nonprofit Organizations..................................13
     Registration of Foreign Nonprofit Organizations.....................................15
     Nonprofit Organization Activities............................................................15
          Political Activities and Lobbying........................................................19
          Economic Activities.............................................................................20
          Prohibition on Distribution of Income or Assets/Private Inurement...20
          Expenditures and Administrative Expenses.........................................21
          Government Supervision......................................................................22
          Termination, Dissolution, and Sanctions..............................................22
          Charitable or Public Benefit Status.......................................................23
          Local and Cross-Border Funding..........................................................24
          Tax Law................................................................................................26

V. New and Events.........................................................................................29

Sunday, April 2, 2017

My Voluntas article on Divergent Pathways of Chinese Foundations and Grassroots NGOs

About two years ago, I wrote a paper for the China Philanthropy Initiative titled, "Same Bed, Different Dreams: The Divergent Pathways of Foundations and Grassroots NGOs in China." After several revisions, that paper was recently accepted for publication by Voluntas: the International Journal for Voluntary and Nonprofit Organizations, and is now available here for viewing but not for downloading.

I'm particularly proud of this article because it addresses what I felt was a very important practical and political issue if China's civil society was to maintain its rapid development, and that is to find creative ways to tap into local funding and resources. This issue has become even more pressing now with the Overseas NGO Law which will make it more difficult than ever for foreign funding to support the work of grassroots NGOs, particularly those doing more sensitive work.

Here is the paper abstract: 

The rapid rise of high-wealth individuals and foundations in China should be good news for China’s grassroots NGOs whose continued growth depends critically on their ability to mobilize domestic resources. As a number of Chinese philanthropy practitioners have noted, Chinese foundations and NGOs should be natural allies and strategic partners. Yet the reality is very different as foundations currently provide very little support to NGOs, particularly the more independent, grassroots NGOs that have few ties with the government. This paper examines the disconnect between Chinese foundations and grassroots NGOs, and whether progress is being made in closing the gap betwee n them. It argues that one of the main reasons for the gap has to do with their very different development paths, which have engendered signicant structural and cultural differences between the two. It also highlights some cases of promising foundation-NGO collaboration.

Sunday, March 12, 2017

Putting the Overseas NGO Law in Perspective


There hasn't been much news since the announcements in January of 32 foreign NGOs registering in Shanghai, Beijing and Guangdong. In the meantime, several in-depth articles have appeared on the Overseas NGO Law and its implementation.

One article, The Origins of China's New Law on Foreign NGOs, was written by yours truly and was published in ChinaFile in early January as a more polished version of an earlier blogpost.

Another article, Overseas NGOs in China: Left in Legal Limbo, was published in the Diplomat in early March by Kristin Shi-Kupfer and Bertram Lang, two China experts, at the Mecator Institute for China Studies, a private think-tank based in Berlin.

Soon after, Jia Xijing, a well-respected expert on Chinese civil society at Tsinghua University's NGO Research Center and a strong supporter of an independent civil society in China, published a long, very detailed article, China's Implementation of the Overseas NGO Law, in the Southern Weekly (南方周某(the English-language and Chinese-language version of the article can be found on China Development Brief's website).

These articles are valuable because they give us some much needed perspective on how the law came to be, and its historical and political significance. This perspective is particularly important given the perception of mutual mistrust between the Chinese government and NGOs, and the lack of detailed information and guidance about the law's implementation from Chinese authorities. It's an environment ripe for misperception and misunderstanding, short-term thinking and behavior. Reports of foreign NGOs closing their offices and leaving China, Chinese NGO partners withdrawing from projects, and directives from local authorities seeking to implement the law in their jurisdictions, can easily lead NGOs to make judgements based on misinformation or misconceptions. The easy conclusion to draw is that a crackdown on NGOs in imminent. 

I think we should resist the temptation to draw that conclusion without first seeking more information and analysis, and to keep the long view in mind, which is why these articles serve an important purpose. The Overseas NGO Law does not mean the end of an independent civil society in China. It does mean another period of adaptation in which both foreign and Chinese NGOs will have to figure out how to operate in this new environment. Moreover, we should remember that the long view cuts both ways. It is not just about NGOs adapting, it is also about Chinese authorities adapting to the new law and finding a way to make it workable. As my article, and Professor Jia's, both point out, we need to remember that the law is part and parcel of a larger, ambitious, long-term project announced in the 4th Plenum in 2014 to build a socialist rule of law in China. This "rule of law" is not the rule of law that we know in liberal democracies; rather as various commentators note,[1] it is an instrument that Chinese leaders see as necessary if they want to reduce local government discretion, push through reforms and strengthen governance with the goal of maintaining sustainable growth and social stability. In other words, Chinese leaders will take the implementation of this law and other laws seriously because they see building a socialist rule of law as the path to a more prosperous, just and stable society.

To return to the challenges facing NGOs, my experience working with Chinese and foreign NGOs in China is that both are quite creative and persistent and as long as there are pressing social needs for their work, they will find ways to work through or around the NGO Law. When we hear of a foreign NGO closing its office, or a Chinese NGO partner declaring its withdrawal, we should not assume that is the end of the story. Or to put it another way, we should not, to paraphrase Mark Twain's words, greatly exaggerate their death.


[1] See Randall Peremboom, “Fly High the Banner of Socialist Rule of Law with Chinese Characteristics: What Does the 4th Plenum Decision Mean for Legal Reforms in China?,” https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2519917, and Zachary Keck, “4th Plenum: Rule of Law with Chinese Characteristics,” The Diplomat, October 20, 2014, http://thediplomat.com/2014/10/4th-plenum-rule-of-law-with-chinese-characteristics/.

Wednesday, January 25, 2017

Implementing the Overseas NGO Law - 26 NGOs register in Beijing and Guangdong


According to the Ministry of Public Security’s website, the first group of overseas NGOs have successfully registered in Beijing and Guangdong. The MPS notice dated January 24 states that 20 NGOs in Beijing, and six NGOs in Guangdong, received their registration certificate this month.  The MPS Overseas NGO Service and Management platform shows pictures of the undoubtedly relieved NGO representatives on a stage holding their certificates, along with MPS officials.

The Beijing NGOs include familiar names like the World Economic Forum, Save the Children, the Bill and Melinda Gates Foundation, and the Paulson Foundation. The Guangdong NGOs include the Hong Kong Chinese General Chamber of Commerce (Guangzhou), the Federation of Hong Kong Industries (Shenzhen), and the Taiwan Trade Center (Guangzhou).

As I noted in earlier posts, the first group of overseas NGOs to get registered would most likely include those that had already been registered as representative offices of foundations under the Ministry of Civil Affairs. That seems to be the case when reading the names of the Beijing NGOs. The World Economic Forum, Save the Children and the Gates Foundation had all been registered as a representative office of a foundation prior to the Overseas NGO Law taking effect. The main difference is that they are now registered with Public Security, and not Civil Affairs.

Tuesday, January 24, 2017

Implementing the Overseas NGO Law - Six NGOs Register in Shanghai

The Overseas NGO Law went into effect on January 1 without so much as a whimper. Slowly, we’re beginning to see signs of the implementation machinery and process being rolled out in various provinces.  Shanghai is taking the lead, which is no surprise given that the first news conferences about the law’s implementation took place in Shanghai. The website (http://ngo.police.sh.cn:8081/xxfb/f) of the Shanghai Public Security Bureau’s Overseas NGO Management Office also seems to be the furthest along with both Chinese and English content.  Even the Ministry of Public Security’s Overseas NGO Service and Management Platform (http://ngo.mps.gov.cn/ngo/portal/index.do) is as of this writing still only in Chinese.

In addition, according to a January 17 news report, the first six overseas NGOs registering a representative office under the new law did so in Shanghai (http://www.shobserver.com/news/detail?id=42540 (Chinese only)). Those six NGOs were Project HOPE (美国世界健康基金会), the Hong Kong Yin Shin Leung Charitable Foundation(香港应善良基金会), the U.S.-China Business Council (美国美中贸易全国委员会), the Canada China Business Council (加拿大加中贸易理事会), the Russian Federation Chamber of Commerce and Industry (俄罗斯联邦工商会), and the Confederation of Indian Industry (上海代表处和印度工业联合会).

Guangdong is another province that has set up its Overseas NGO Management Office and a website (http://www.gdga.gov.cn/ngos/#sthash.qBX8HO7W.dpuf) still in Chinese at this writing.

Conventus Law’s website (http://www.conventuslaw.com/report/china-ngo-provincial-directories-gradually/) has a useful announcement about the implementation of the law, including information that provinces are now coming up with their own directories of PSUs, and fields of activity.  They also note that Shanghai and Shenzhen have been designated by the MPS as the two cities piloting implementation of the law, although I have not see this confirmed yet elsewhere.

Sunday, January 8, 2017

More FAQs on the Overseas NGO Law: Reading the Fine Print

The more I speak to people about the Overseas NGO Law, the more I realize how much misunderstanding there is about the law. I think it is safe to say that this misunderstanding exists both among NGOs and among the Public Security officials who are charged with implementing this law.

One source of misunderstanding comes from confusion about what different terms mean. Another source comes from the law itself being unclear on some points. This series of FAQs seeks to provide some clarity on these areas.


What is the difference between the Professional Supervisory Unit (PSU) and a Chinese Partner?

As I've written in a previous post, the Law only provides overseas NGOs with two ways to operate in China. One is for the NGO to register a representative office with the provincial Public Security Bureau (PSB). The second, for NGOs that do not need or want to establish an office in China, is for them to "file documents" on their "temporary activities" with the provincial PSB. (It's still unclear how the PSB defines "temporary activities," whether an "activity" can encompass an entire program or project that consists of a set of smaller activities, or whether the NGO needs to file paperwork on each small activity that makes up a larger program or project.)

To register a representative office, an NGO needs to get the approval of a Professional Supervisory Unit (PSU) (or what the official English-language translation calls "organizations in charge of operations") in its main field or area, before it can register with the PSB. In other words, it comes under what the Chinese call a "dual management system" needing to get approval from both the PSU and the PSB.

To "file documents" for "temporary activities," an NGO only needs to find a Chinese Partner who can get the necessary approvals for those activities, and file the necessary paperwork with the PSB.  In theory, this means that the NGO only needs to inform the PSB about its activities, and does not need approval.

Some people have confused the PSU with the Chinese Partner but they are two very different concepts.

The PSU is generally a government agency in the NGO's main field or area. For example, if the NGO mainly works in the commercial or trade area, then it's PSU will most likely be the Commerce Bureau. If the NGO mainly works on environmental issues, then the PSU will most likely be the Environmental Protection Bureau. The PSU also has supervisory authority over the NGO which is required to get approval from the PSU for its operations and send annual work reports to the PSU.
The Ministry of Public Security has just issued a catalogue of the government agencies that are eligible to serve as PSUs for different fields/areas, so NGOs will need to consult that catalogue for the eligible PSUs in their field. However, be aware that just because the government agency is listed in the catalogue does not mean that it is obligated to serve as a PSU.

In contrast to the PSU, the Chinese Partner can come from a much larger pool of organizations. Article 16 of the Overseas NGO Law states that the Chinese Partner can be a government agency, a people's organization (e.g. Women's Federation, Communist Youth League, etc.), public institution (e.g. universities and research institutes), and social organizations (e.g. NGOs). The Chinese Partner also has no supervisory authority over the NGO. The NGO enjoys more of an equal relationship with the Chinese Partner. The Chinese Partner, however, does play an important role in getting the necessary approvals for "temporary activities" and filing the necessary documents with the PSB.


Is there any fine print in the law?

There is no fine print in the law itself, but there are problems with the official English translation, and there are also subtle omissions in the law that require a close reading to understand what the law allows and does not allow.

First of all, anyone working with the official English translation of the law on the Ministry of Public Security website (http://www.mps.gov.cn/n2254314/n2254409/n4904353/c5548987/content.html), should be aware that there some mistakes in the translation.  

One particularly egregious mistake is in the second paragraph of Article 9 of the law. Here's the Chinese original:

境外非政府组织未登记设立代表机构、开展临时活动未经备案的,不得在中国境内开展或者变相开展活动,不得委托、资助或者变相委托、资助中国境内任何单位和个人在中国境内开展活动。

Here's the official translation:

"...Where an overseas NGO has not registered an established representative office, nor submitted documents for the record stating that it intends to carry out temporary activities, it shall not carry out or covertly engage in any activities, nor shall it entrust or finance, or covertly entrust or finance, any organization or individual to carry out activities in the mainland of China on its behalf. "

This translation states that overseas NGOs shall not entrust or finance, or covertly entrust or finance, any organization or individual to carry out activities in mainland China. This suggests that overseas NGOs cannot contract services to, or fund, another organization outside of China to carry out their activities inside China.

Yet the Chinese original is much more narrow. It states that overseas NGOs shall not entrust or finance, or covertly entrust or finance, an organization or individual in mainland China (those last three words were left out of the official translation) to carry out activities within mainland China.


Another problem with the translation occurs in Article 17 which discusses the procedures for NGOs carrying out "temporary activities".  The official translation of the last part of that article reads:

"In emergency situations, such as disaster relief and rescue operations, where an overseas NGO needs to carry out temporary activities in the mainland of China, the time frame for filing records mentioned in the preceding article shall not apply; however, the duration of temporary activities shall not exceed 1 (one) year. Where there is a need to extend this deadline, documentation and information shall be re-submitted for the record."

This translation makes it sound as if the one-year limit for temporary activities applies only for disaster relief activities, but in fact the one-year limit is meant to apply to all temporary activities. The official translation's mistake is to place the phrase (in italics) starting with "however, the duration of temporary activities...." right after the preceding sentence on disaster relief activities, which suggests that this phrase only applies to disaster relief. Yet in the Chinese original, the part about the duration not exceeding one year is set off in a separate paragraph to show that it applies to all “temporary activities”. Here is the correct translation:


"In emergency situations, such as disaster relief and rescue operations, where an overseas NGO needs to carry out temporary activities in the mainland of China, the time frame for filing records mentioned in the preceding article shall not apply." 

The duration of temporary activities shall not exceed 1 (one) year. Where there is a need to extend this deadline, documentation and information shall be re-submitted for the record."


There are also parts of the law where certain changes were made during the drafting process that were not made clear. Two important examples come to mind:

1) Article 10 of the second draft of the law specifically stated that an overseas NGO could register no more than one representative office. In the final version of the law, that was removed, yet there was no language explicitly stating that more than one representative office would be allowed. This question came up in one of the MPS briefings in Shanghai and was clarified by the MPS spokeman. In addition, language allowing more than one representative office was included in the final version of the Guidelines.

2) Article 26 of the second draft of the law stated that overseas NGOs could not fundraise or accept donations in China.  In the final version of the law, the language about accepting donations was removed (see Article 21), but here again no language was inserted stating that overseas NGO could accept donations.


The lesson we can learn from these two examples is that it pays to do a close comparison of the final version of the law with earlier drafts because when changes were made to the draft laws, the intent behind those changes was implied rather than made explicit. The intent only becomes clear when comparisons are made with previous drafts.






Friday, December 30, 2016

The Evolution and Intent of China's Overseas NGO Law


A more recent version of this article was published on ChinaFile, http://www.chinafile.com/viewpoint/origins-of-chinas-new-law-foreign-ngos.

Prologue

In March of 2013, Xi Jinping was named the President of the People’s Republic of China at the 12th National People’s Congress (NPC).  At the time, I was working for China Development Brief, an independent Chinese NGO started by the British journalist Nick Young in 1996.

I remember that month well because we were busy preparing for the launch of our directory of independent Chinese NGOs and a report on public advocacy in China. That event was a celebration of the substantial growth in independent civil society organizations over the last decade. It was also a coming out party for CDB which had assumed a low profile after Nick was denied entry back into China in 2007 for reasons that have never been made clear. Nick’s English-language website stopped posting content a short time afterwards. The Chinese CDB team continued to publish a Chinese-language quarterly covering civil society developments in China, but did not issue any new directories or special reports or organize major public events. The last NGO directory CDB had published was a directory of international NGOs in 2005, and before that a directory of Chinese NGOs in 2001.

To promote the new NGO directory and advocacy report, we held a day-long Civil Society Forum in the U.S. Embassy’s American Center. We invited over a hundred representatives from independent Chinese NGOs, foreign NGOs, diplomats, scholars and media, and asked several Chinese NGOs to speak about the significance of the directory and their advocacy experiences in China. 

We were anxious before and during the event because it was taking place 10 days after the close of the NPC session. Generally it’s not a good idea to organize large civil society gatherings in China, let alone in the capital one week after Xi’s coronation. Given the heightened security presence, we encountered difficulties and delays in the printing of the directory. One printing company pulled out when the police showed up unannounced at their office, so we approached a company located further outside Beijing that agreed to publish it. I remember the copies not showing up in our courtyard office until only a few days before our event.

Despite our fears, the Forum was a success. It was standing room only, we did not run out of food, the simultaneous interpreters performed admirably, and the police did not show up. Or if they did, they did not announce their presence.

That spring now seems like a distant memory, much like the week-long blue sky days that appeared over Beijing during the Olympics. Little did we know that two years later, the environment for civil society would change dramatically, that a number of the Chinese NGOs that attended the Forum would be subjected to harassment and detention and some would leave the country for safer havens, and that a draconian law placing foreign NGOs under police supervision would be passed.

Introduction

Since China opened its doors to the outside world in the late 1970s, thousands of overseas not-for-profit NGOs have carried out programs and activities in China, contributing to China’s development and engagement with the rest of the world. These NGOs run the gamut from trade and commercial groups like the U.S.-China Business Council and European Chamber of Commerce to universities like NYU and Stanford to foundations like Mercator and Ford to performing arts groups like the Philadelphia Symphony to think-tanks like Brookings and Carnegie to sporting associations like the International Olympic Committee and the NBA.

No one really knows how many of these organizations are operating in China, but the numbers are substantial. In 2005, China Development Brief (which also started as an overseas NGO) published the first directory of international NGOs in China listing around 200 selected NGOs. Since then, estimates ranging from 1,000 to 7,000 have been provided by Chinese and foreign scholars that include both overseas NGOs that have an office in China and those carrying out programs and activities in China from their overseas offices[i].   

For many years, the vast majority of these NGOs operated quietly in China in a grey area. Many are unregistered and work in China through local partners, while others are registered as a representative office of a company. That will all change with the passage in April of the Law on Administration of Activities of Overseas NGOs in the Mainland of China (hereafter Overseas NGO Law) which goes into effect on January 1, 2017. The Law is the first comprehensive regulation of its kind covering all overseas NGO activity in China.


The Long Road to Regulating Overseas NGOs

Prior to the Law, the Chinese government had taken halting, incremental steps to regulate foreign NGOs. The first came in April 1989 in the form of the Provisional Regulations for Foreign Chambers of Commerce that allowed chambers of commerce to register with the Ministry of Foreign Economic Relations and Trade (MOFERT). Foreign NGOs that were not chambers of commerce had to wait another 15 years when the 2004 Foundation Management Regulation made its appearance. This regulation was issued by the Ministry of Civil Affairs (MCA), the government agency responsible for regulating “social organizations” (China’s official term for NGOs), and was primarily intended to promote the development of Chinese foundations. Yet it included for the first time language on the registration of representative offices for “overseas foundations”[ii].  Overseas foundations and NGOs were allowed to register a representative office in China under a stringent “dual management system” in which an NGO first needed to get approval from a Professional Supervisory Union (PSU) in a similar field (essentially a government sponsor) before it could register with MCA.

The Foundation Regulation had a very limited impact on overseas NGOs: only a handful succeeded in registering primarily because most were unable to find a PSU. These fortunate few included operational NGOs like the World Wildlife Fund, China Medical Board and World Economic Forum and grant-making foundations like the Bill and Melinda Gates and Li Ka Shing Foundation. By 2015, the number of overseas NGOs that had registered a representative office numbered a mere 29 out of the hundreds of overseas NGOs with offices in China.

In early 2010, as part of a series of local policy experiments intended to improve the regulations of NGOs, the MCA launched a pilot program to register overseas NGOs in Yunnan.  The “Yunnan Province Provisional Regulations Standardizing the Activities of Overseas NGOs,” required overseas NGOs to “file documentation” (bei’an) about all their partners, funding and activities in Yunnan with the provincial Civil Affairs and Foreign Affairs departments. By December 2010, around 140 overseas NGOs had registered under this regulation and by 2013, MCA leaders were touting the Yunnan regulations as a model for national policy. This was also the year when Xi Jinping was anointed President of the PRC and the approach to regulating NGOs suddenly changed.

Xi Jinping’s New Governance Approach

Xi Jinping’s rise to power coincided with a new governance approach that focused on strengthening national security and “governing the country according to law” (yifa zhiguo) as ways to rejuvenate Communist Party rule. Already in the spring and summer of 2013, a major crackdown on activists, lawyers, bloggers and journalists was taking place to head off potential threats to social stability. By the end of 2013, a National Security Commission (NSC) headed by Xi Jinping was established. In early 2014, reports of overseas and Chinese NGOs working in Tibetan areas being closed down began to surface. In April of 2014, the NSC held its first meeting and a month afterwards ordered a national survey of overseas NGOs operating in China. 

During the 2014-16 period, a major anti-corruption drive launched by President Xi gathered momentum along with the repression against NGOs and human rights and labor activists and lawyers. Several foreigners who had been working for Chinese and overseas NGOs were evicted in 2015 for working on improper visas, and in January 2016 a Swedish citizen – Peter Dahlin – appeared on state-run television where he made a forced confession to working for an organization that supported Chinese human rights lawyers. These troubling developments were accompanied by the passage of several new security-oriented laws one after another in 2015 and 2016: the Counterterrorism Law, National Security Law, the Overseas NGO Law and most recently the Cybersecurity Law.

The Overseas NGO Law Surfaces

The first sign of the Overseas NGO Law came in December 2014 with the announcement that the NPC Standing Committee was deliberating the first draft of the law. That announcement caught many observers by surprise. Before this, MCA had been taking the lead on drafting regulations for overseas NGOs, using the Yunnan regulations as the basis for national regulations. In the case of the Overseas NGO Law, a draft of a national law was being proposed, not just a draft of a ministerial regulation like the one in Yunnan. More importantly, the announcement of the draft law was being made by the Vice-Minister of Public Security who stated that the registration and management authority for overseas NGOs would now be vested in the Ministry of Public Security (MPS), not the MCA. He noted that the regulation of overseas NGOs had been raised as an urgent issue at the Third Plenum in October 2013 and the Fourth Plenum in October 2014, and that the MPS had been working with the MCA and other departments as early as April 2014 on researching and drafting the law. The mention of April is significant because it coincides with the first meeting of the National Security Commission and suggests that the decision to make MPS responsible for regulating overseas NGOs was made at that meeting.

The Drafting and Substance of the Law

The first draft of the Overseas NGO Law was not made public, but an English translation quickly circulated. That draft was quite draconian. It gave overseas NGOs only two ways to operate legally in China. One was for the NGO to register a representative office, which required getting approval from a professional supervisory unit (PSU) working in the same field as the NGO, and then applying for registration with provincial Public Security departments. For NGOs that did not want to establish a representative office but only wanted to carry out projects and activities in China, the second option was to register for a “temporary activities” permit lasting one year.  Applying for a permit would also require jumping through a series of hoops, namely getting approval from a PSU, collaborating with a Chinese partner, and then applying for a permit from the relevant Public Security department. The draft law stated that overseas NGOs that did not follow one of these two channels would be operating illegally. 

There are a number of signs that point to a clear national security focus behind the drafting of this law. One was the transfer of registration and management authority from MCA to the MPS. Another was the MPS Vice Minster’s mention of April 2014, the same date as the first meeting of the National Security Commission, as the time when research and drafting on this law began. A third can be found in the language of the draft which has a stronger security emphasis than the Yunnan regulations.

At the same time, parts of the law are influenced by the Yunnan regulations developed by MCA[iii]. It uses the same term “overseas NGO” to refer to “…non-governmental, non-profit or public interest organizations that have been legally established overseas.” It preserves the “dual management” system which requires overseas NGOs to get approval from a PSU, although the PSU plays a somewhat different role in the Yunnan model. It also incorporates a similar “document filing” (bei’an) system for overseas NGOs to report on their activities, partners and funding.

We can also learn something about the law by examining its evolution from the first draft to the final version that was passed by the National People’s Congress in April of 2016. As is the norm, the law went through three drafts before its passage. The second draft, issued in early May of 2015, was the only one publicized to solicit comments from the public.

The revisions made in the later drafts reflect MPS recognition that certain provisions were going to be administratively burdensome, and changed them to streamline the process. The most significant example was the simplification of procedures for NGOs carrying out “temporary activities.” In the first and second drafts, NGOs would first need to get approval from a PSU, and find a Chinese partner to collaborate with. After that, it still needed to apply for a “temporary activities” permit from the relevant Public Security department and wait for their approval. After receiving public comments about the draft, the MPS dropped the requirements for PSU approval and Public Security approval for a permit in the final version of the law, and only required that NGOs work with their Chinese partner to “file documents” about their “temporary activity”. In other words, in the final version of the law, NGOs carrying out “temporary activities” only had to inform the relevant Public Security department about the activities but not wait for approval. 

In other instances, the MPS realized that certain procedures and requirements either overlapped with, or conflicted with, procedures and requirements in other laws and regulations. The first draft, for example, prohibited NGOs from having branch organizations but when it was discovered that some science and technology NGOs already had branch offices, the final version of the law allowed for branch offices “specified by the State Council.” Similarly, the first draft only allowed NGOs to register one representative office in China, but later drafts removed that limit although no language was inserted explicitly stating that NGOs could register more than one representative office.

The MPS also removed articles in the first and second drafts that allowed overseas NGOs to set up domestic NGOs, realizing that this could be used as a loophole giving overseas NGOs a channel for working covertly through these domestic NGOs. Given that domestic NGOs are regulated by MCA through a different set of laws and regulations, these articles would also have raised questions about which ministry would be responsible for supervising these domestic NGOs.

The amount of time it took to get from the first draft to the passage of the law is also telling. It took a total of nearly 16 months, 11 of which were spent digesting the many public comments made to the second draft and preparing a revised draft that was passed by the NPC Standing Committee in late April 2016. In comparison, the Counterrorism Law took 13 months, the National Security Law eight months, the Charity Law six months, and the Cybersecurity Law 15 months. The lengthy drafting process of the Overseas NGO Law was likely a product of several factors: the unfamiliarity of the MPS in regulating such a diverse set of organizations and the challenges it faced in processing the public comments; the need to coordinate with MCA and other relevant agencies on the revisions; concerns about the draft law raised by foreign NGOs, businesses and governments; and perhaps even infighting among agencies and groups with different views on the law.

The Law’s Intent and What NGOs Can Do

Two observations emerge from this examination of the Overseas NGO Law’s emergence and evolution. One is that Xi Jinping’s rise to power and his concerns about China’s security environment was the major driver behind the law’s establishment and timing. The second observation, drawing from the revisions made to the different drafts of the law and the length of time spent in the drafting, is that the law is being taken seriously by Chinese leaders as a governance tool to strengthen “law-based administration” (yifa xingzheng), recognize the role played by overseas NGOs in China’s development, and strengthen their regulation. In this sense, the law can be seen as part of Xi Jinping’s broader “governing the country according to law” (yifa zhiguo) campaign to improve Party discipline and governance over both the Chinese state and society. By strengthening regulation of a group of social actors associated with foreign values and agendas, the law is intended to provide legal channels for those actors to carry out their activities while also better protecting China from external threats. But another intent of the law, I would argue, is to require more transparency and accountability on the part of the implementing authorities, and the MPS in particular. By providing a detailed framework, procedures and responsibilities for regulating overseas NGOs, the law seeks to limit the discretionary power of the MPS even while it expands its administrative authority and resources.

I realize that this last point is not widely shared by many critics of the law who see the law giving the MPS unlimited power over overseas NGOs. While I am not a fan of this law, the critics’ view ignores the fact that Public Security organs and local governments already have the authority to close down many of the overseas NGO projects and offices in China that are unregistered or improperly registered. In 2000, the MCA issued the “Interim Regulations for Banning Illegal NGOs” that provided guidance to local authorities who were unclear about how to deal with unregistered or improperly registered Chinese and overseas NGOs working in their jurisdiction. As Deng Guosheng points out, local authorities were given wide discretion over how to implement this regulation which was much more ambiguous than the Overseas NGO Law[iv]. Over time, an unwritten understanding emerged among authorities to adopt a hands-off approach towards these “illegal” NGOs unless they posed a real threat to social stability or national security.

If the Chinese leadership really wanted to make life difficult for overseas NGOs, all they would need to do is issue a national directive or law to ensure that this regulation was enforced. But that would be like using a cudgel whose appearance would scare away many overseas NGOs. Instead the leadership chose to use a more surgical instrument by creating a law that required overseas NGOs to be transparent about their partners and funding, but also placed limits on the discretionary authority of Public Security and other government agencies. The intended effect, in my view, was not to drive NGOs from China but to corral them into officially-sanctioned areas and away from more sensitive areas working with grassroots NGOs working on rights protection, advocacy, religion, etc. To a large extent, this was also the effect of the Yunnan regulations[v].

Getting the intent of the law right is important because the MPS will be judged on its performance in implementing the law so that it does achieve its intended effect. If the intent of the law is truly to make life difficult for overseas NGOs and encourage them to leave the country, then the MPS has an easy job to do, and there is little that NGOs can do to shape implementation. But if the intent of the law is to ensure that overseas NGOs are able to work legally in officially-sanctioned areas, then the MPS has its work cut out for it and overseas NGOs have some leverage to shape the law’s implementation by monitoring and holding the MPS and other government agencies accountable for implementing and enforcing the law in an effective and impartial manner.


[i] Shawn Shieh and Signe Knutson, Special Report: the Roles and Challenges of International NGOs in China’s Development, China Development Brief (2012), http://chinadevelopmentbrief.cn/publications/special-report-the-roles-and-challenges-of-international-ngos-in-chinas-development/.
[ii] http://chinadevelopmentbrief.cn/wp-content/uploads/2014/08/REGULATIONS-FOR-THE-MANAGEMENT-OF-FOUNDATIONS-.pdf
[iii] Jennifer Hsu and Jessica Teets, “Is China’s New Overseas NGO Management Law Sounding the Death Knell for Civil Society? Maybe Not.” The Asia-Pacific Journal, vol. 14 (February 2016).
[iv] “The ‘Hidden Rules’ Governing China’s Unregistered NGOs: Management and Consequences,” The China Review, vol. 10 (Spring 2010).
[v] Hsu and Teets, “Is China’s New Overseas NGO Management Law Sounding the Death Knell for Civil Society? Maybe Not.”