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,


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.


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),
[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.”

Wednesday, December 21, 2016

Follow up on the Overseas NGO Law - the list of Professional Supervisory Units has been issued

The Overseas NGO Law passed in April stated that a directory of Professional Supervisory Units (PSUs, 业务主管单位) would be made public. These PSUs (or in the official English-language translation of the Law "organizations in charge of operations") are important for those overseas NGOs that wish to register a representative office, but are not necessary for NGOs that only wish to carry out "temporary activities." In order to register a representative office, the NGO first needs to get the approval of a PSU that is willing to supervise its operations in China.

On December 20, almost eight months after the law was passed, the Ministry of Public Security  released the official directory of PSUs. The Chinese original is available on the Ministry of Public Security's website:

So far, no official English-language translation of the directory or the Guidelines has appeared.

It is interesting looking at the list of PSUs and the list of major fields/projects, how many areas are on the list. The major categories are Economics and Trade, Education, Science and Technology, Culture, Health, Sports, Environmental Protection, Emergency Assistance and Disaster Relief, and Other. Each of these categories has subcategories. Under Other, we find interesting subcategories such as: Legal Services; Women and Gender; Union work (which is limited to union research and exchange); and Social Organization (the official term for nonprofits and NGOs) Research, Exchange and Collaboration.

The list of PSUs is pretty conventional, full of government agencies working in the above major fields. There are also a few mass organizations like the Women's Federation, Disabled Persons Federation and All-China Federation of Trade Unions. I would have liked to see a more expansive list that included universities and research institutes, and it looks like there is room for changes in this directory, as an explanatory note in the directory states that it will be revised in the future.

The critical issue is whether these PSUs will be willing to supervise overseas NGOs. In the past, the difficulty of finding a willing PSU was the main obstacle to overseas NGOs seeking to register a representative office. This was the main reason that, of the hundreds of overseas NGOs that had offices in China, only around 29 were able to register a representative office with the Ministry of Civil Affairs between 2004 to 2016. 

There is no reason to believe that PSUs will be more willing now to supervise NGOs under the new Overseas NGO Law. Just because they are listed in this directory does not mean that they have an obligation to be a PSU. The 29 or so NGOs that have an existing PSU and have already registered a representative office with the Ministry of Civil Affairs will very likely have no problem transferring their registration to the Ministry of Public Security. But for the hundreds of other NGOs, there is no guarantee that they will be able to get the approval of a PSU.

Thursday, December 8, 2016

Foreign Consulates Meet with Public Security officials about the Overseas NGO Law

We are only 24 days away from the Overseas NGO Law going into effect in China, and the only official news we have gotten in the past two months are an October 14 meeting between the Public Security officials with foreign NGOs (mostly business and trade groups) in Shanghai to announce draft Guidelines for the law, a November 8 meeting in Shanghai between Public Security officials and foreign consulates (the subject of this post), and the release of the final official Guidelines.

A summary of the November 8 meeting, the official Guidelines (境外非政府组织代表机构登记和临时活动备案办事指南) in Chinese, and the official English langauge-translation of the Overseas NGO Law are now available on the Ministry of Public Security (MPS) website.  There is so far no official English language translation of the Guidelines, although there is an unofficial translation available on ChinaLawTranslate, and on the WeChat account of FORNGO which bills itself as a center that provides “professional legal services for assisting overseas NGOs with registration of overseas NGO offices, application of filing the record of temporary activities, etc.”.

The remainder of this post is about the November 8 meeting between the MPS and Shanghai PSB and 11 foreign consulates[1] about preparations for the implementation of the Overseas NGO Law.  Several questions were raised at the meeting, particularly (1) whether there would be a "grace period” to give overseas NGOs time to comply with the law, (2) whether NGO representative offices could carry out activities across provinces, and (30 how overseas NGOs with activities in different sectors would determine their professional supervisory units (PSU) or as they are referred to in the Guidelines, business administration departments (BAD).

Before answering these questions, the MPS representative in charge of the Overseas NGO Management office (公安部境外非政府组织管理办公室) made a several statements that were similar to those given at the October 14 meeting.

1) The MPS was giving high-level attention to the work of servicing and managing Overseas NGO and providing efficient and convenient services, and was making intense preparations to ensure that the law would be effectively implemented on January 1, 2017.

2) The coordination mechanism for FNGO supervision and management work had already been established with the MPS and other relevant PSUs participating, to research, coordinate and solve major problems in supervision, management and services for overseas NGOs carrying out activities in China.

3) Provincial Public Security Bureau’s (PSB) Entry/Exit offices were setting up counters for handling registration. In order to provide guidance and help to overseas NGOs seeking to register a representative office or file a record for “temporary activities”, relevant standard documents were being formulated, including the Guidelines for Registration of Overseas NGO Rep Offices and Filing of Records for Temporary Activities 《境外非政府组织代表机构登记和临时活动备案办事指南》, and a Catalogue of Overseas NGO Sectors and Project Areas and Directory of PSUs 《境外非政府组织在中国境内活动领域和项目目录、业务主管单位名录》.

4) An information system and website was being established for overseas NGO management services so that overseas NGOs can go on the website to handle matters and make appointments for registration and filing of records, and apply and submit relevant materials online. Relevant guidance materials would also be published online.

5) The MPS would work together with the Ministry of Civil Affairs (MCA) and State Administration of Industry and Commerce (SAIC) to transfer the registration of those overseas NGO representative offices registered with these two agencies to ensure a smooth transition to the new management framework and protect the legal rights of these overseas NGOs.

This last item refers to the 29 or so overseas NGOs which have managed to register representative offices with the MCA under the 2004 Foundation Management Regulations, and those overseas NGOs that were unable to register representative offices with MCA but were permitted to register representative offices of companies with SAIC.

With regard to the questions posed above, the MPS spokesman provided the following responses.

About the question on the grace period, he replied that "China is a rule of law country, and any laws that go into effect will not have any grace period. When the Overseas NGO Law was passed on April 28, with the aim of going into effect on January 1, 2017, legislative bodies already considered this was a new law and allowed eight months for a preparation period to issue guidelines and catalogues for sectors and projects and a directory of PSUs. He also stated that as soon as the law went into effect, the activities of overseas NGOs and their representatives in mainland China that were registered or recorded would receive legal protection.

Regarding whether overseas NGO representative offices could undertake activities across several provinces, he stated that based on Article 10 and 13 of the Law, FNGOs could set up one or more representative offices in China, and at the time of registration should confirm the geographic area for the activities carried out by that office. A representative office would be allowed to carry out activities across different provinces. For overseas NGO that set up two or more rep offices, the activities of these offices should not overlap or duplicate each other.

Regarding the question of how overseas NGOs that work in different sectors or fields would determine their PSU, he stated that currently they are working on a catalogue of overseas NGO sectors and projects and a directory of PSUs to provide clarification and detail on PSUs in the areas of economy, education, science and tech, culture, health, sports, environmental protection, humanitarian assistance, disaster relief, etc. He noted that “for overseas NGOs working in multiple sectors/fields, the MPS is proposing that overseas NGOs determine its PSU based on their primary or major field of activity. For the overseas NGO's other fields of activity, the main PSU can consult with other relevant departments which should actively cooperate to ensure the management and service work is carried out, and ensure that the overseas NGO is complying with the law in carrying out activities in those issue areas.” 

He did not elaborate on how exactly this proposed arrangement and coordination between the “main PSU” and other relevant departments would work in practice.

In closing, the MPS spokesman emphasized that over the last 30 years of reform and opening, China's economic development and international influence have grown, and overseas NGOs have played a positive role in that process by bringing in projects and funds, diverse ideas, advanced technologies, and valuable experiences. In doing so, they have promoted friendly exchanges between China and other countries, and made a positive contribution to China's economic and social development. China's government continues to welcome and support overseas NGOs to come to China to develop cooperation and exchange programs. The MPS would firmly carry out its work according to the law, carry out its services and management work according to the law, and would work hard to provide assistance and services to overseas NGOs engaged in exchange and cooperation with China.

[1] The U.S., UK, Germany, France, Italy, Japan, Sweden, Netherlands, Poland, Belgium, and Ireland.

Tuesday, November 8, 2016

Civil society as a early warning system: what the U.S. elections, Occupy Central and Brexit (but not China) have in common

We live in a time when everywhere you look, you can spot a governance crisis around which is strewn the detritus of broken political institutions. In the U.S., we're almost at the end of a divisive, insanely expensive election campaign and the rise of Trump who has called the U.S. electoral system "rigged". In Hong Kong, we're seeing at this very moment the rejection of the Basic Law and "one country, two systems" by the younger generation who do not see themselves as part of China. In Europe, we've been witnessing Brexit and the rise of virulent nationalism throughout the European Union.

It may be tempting to hold civil society responsible for this state of affairs by pointing a trembling finger at the social forces seeking to divide us and undermine our institutions. But I would turn that causal relationship around and argue that those forces are more the symptom than the cause of the breakdown in our political institutions. In other words, we are made aware of our broken political institutions by citizens and citizen-initiated movements like white Americans without college degrees, the Tea Party, Occupy Central activists, and right-wing European extremists railing against immigration and terrorism. They serve as a kind of early warning system about the health of our polity. It is true these movements are sometimes manipulated by elites, and they are not always civil, but they are coming from citizens who feel they have been disenfranchised by the political system. If we are smart, we would do well to listen to their grievances and address them rather than dismiss them as the lunatic fringe or, in Hillary Clinton's unfortunate wording "basket of deplorables".

It's instructive (and maybe also comforting to those of us living in the U.S., Hong Kong and Europe) to use this same perspective to look at China where President Xi Jinping and others in the Chinese leadership have decided they can improve on and manage governance without a true civil society or independent media.  The current situation in China is truly more frightening than anything we are seeing in the U.S., Hong Kong and Europe because you realize there is no way for citizens who feel they are disenfranchised to voice their displeasure, or for the media to report about it. And therefore there is no way to truly know if China is headed for a governance or legitimacy crisis. 

The lesson? Rancor and upheaval may not be all that bad as long as we see it for what it is. Harmony and order may not be all that good unless we see it for what it isn't.

Thursday, November 3, 2016

Labor activist Meng Han sentenced today to one year 9 months in prison

November 3, 2016

The labor activist Meng Han was sentenced today by a Guangzhou court to one year and nine months in prison for "gathering crowds to disrupt public order" according to his lawyer. Meng pleaded guilty and said he would not appeal. Last December, he was arrested with his fellow staff members from the Panyu Workers Center, Zeng Feiyang and Zhu Xiaomei. As I wrote in an earlier post, Zeng and Zhu were tried earlier on September 26 and given a suspended sentence of four years and two years respectively for the same charge. There is reason to believe that Meng was given a harsher sentence because, unlike Zeng and Zhu, he had refused to write down his confession before the trial. Police reportedly visited Meng's parents two days ago to try to pressure them to persuade Meng to plead guilty. Meng also had another strike against him. He been detained for nine months on the same charge in 2014 when he had been a security guard who had staged a rooftop demonstration at the Guangzhou Chinese Medicine Hospital with 11 other guards to protest the management's refusal to discuss their grievances. Given that Meng has already been in detention for 10-11 months, it is expected that he will only have to stay in prison another 10-11 months to complete his sentence.

Monday, October 17, 2016

Draft Guidelines for the Overseas NGO Law Announced at Shanghai Forum

Last Friday, October 14, the Ministry of Public Security and the Shanghai Municipal Public Security Bureau held a forum in Shanghai for overseas NGOs to announce the draft “Guidelines for the Registration and Temporary Activities of Representative Offices of Overseas Non-governmental Organizations within the Territory of China (for comment)."

The draft Guidelines are meant to provide more detailed information on the Management Act on Activities of Overseas Non-governmental Organizations within the Territory of the People’s Republic of China[1] (hereafter the Overseas NGO Law) which goes into effect January 1, 2017. The Guidelines are divided into four sections: 1) the procedures and documents required for registering a representative office; 2) the procedures and documents required for filing a record for temporary activities; 3) additional issues; and 4) the required forms.

According to news sources[2], the head of the Overseas NGO Management Office, Hao Yunhong, presented the Guidelines and nine overseas NGOs were invited to present their comments on the draft. (It was not made clear if the draft would be limited to comments from only a small number of overseas NGOs or if there would be a more extensive public comment period.) Mr. Hao noted that the provincial Public Security Bureaus were responsible for registration of representative offices and filing records for temporary activities. The Ministry of Public Security in Beijing would not be directly involved in registration and filing records, but instead would be responsible for providing guidance and coordination for the provincial bureaus. The Shanghai Municipal Public Security Bureau’s Entry/Exit Administration has already set up booths, signs and equipment to receive overseas NGOs, and other provinces and cities are said to be in the process of preparing their own service stations.

Mr. Hao also revealed that the Overseas NGO management service information system and websites were being constructed. Once completed, these online platforms can be used by overseas NGOs to make reservations for registration or filing of records, online application and submission of relevant materials, and the posting of relevant documents. In addition, the Ministry of Public Security and relevant departments have set up a coordinating mechanism for supervision and management of ONGOs, and will be responsible for studying, coordinating and resolving major problems in facilitating the supervision, administration and services to overseas NGOs carrying out activities in mainland China.

Below are a few of my takeaways from reading over the draft Guidelines:

1) There's not that much in the way of additional details in these Guidelines, but mostly a repackaging of what has already been stated in the Overseas NGO Law to make the procedures easier to understand.

2) The “registration and management” department for overseas NGOs seeking to either register a representative office, or “file a record” for temporary activities, is to be the provincial Public Security Bureau where the rep office or activities (or more specifically the Chinese partners coordinating on these activities) are located. This led several overseas NGOs at the Shanghai forum to raise the question of what they should do if they have offices and/or activities in several provinces. Do they need to register in every one of those provinces? It seems one possible solution would be to allow overseas NGOs with offices or activities in multiple provinces to register or file a record at the national-level Ministry of Public Security. But Mr. Hao already made it clear that the Ministry of Public Security would not be directly involved in registration or filing records.

3) The Guidelines use the term “business administration department” (or BAD  - who says the Chinese public security don’t have a sense of humor?) to refer to what I have called the all-important “professional supervisory unit” (PSU).  Overseas NGOs seeking to register a representative office are required to have the approval of a BAD, generally a government or quasi-government agency, before they can even begin to register. In the past, it has been very difficult for overseas NGOs to get the approval of a BAD. The Ministry of Public Security has stated it will release a list of eligible BADs, but it is unclear whether the BADs on this list will be obligated to offer their services to an overseas NGO that approaches them.

4) In the section on Overseas NGOs filing a record for temporary activities, the Guidelines state: “In the case of Overseas NGO temporary activities, the Chinese partners shall apply for review and approval according to state regulations and file the required documents 15 days prior to the temporary activity at the provincial Public Security Bureau’s Administrative Office of Overseas NGO Affairs.” But like the Overseas NGO Law, these Guidelines remain vague on just what kind of approvals and documents need to be obtained and filed by the Chinese partner.

[1] This is the name of the Overseas NGO Law given in the English-language version of the draft Guidelines that were sent to me. It’s not clear why the translators chose to use Act instead of Law which is the more standard translation.

Friday, October 14, 2016

Guangzhou labor activists are given suspended sentences

The trial of three labor activists - Zeng Feiyang, Zhu Xiaomei and Tang Huanxing - is over. The verdict came the same day of the trial - September 26 - which was held in a courtroom on the outskirts of Guangzhou. Feiyang was sentenced to three years, with a suspension or reprieve of four years. If he commits an offense during those four years, then he will have to serve his prison sentence. This may very well mean he will not be able to get involved in the things he excels in during that period of time - labor organizing and collective bargaining. The same is true of Xiaomei and Huanxing who received a sentence of 1.5 years, with a suspension or reprieve of two years. The other activist still in detention, Meng Han, has yet to have his day in court. His case was sent back by local prosecutors to the police investigators for further review.

The sentences were bittersweet. They were lighter than expected, especially that of Zeng Feiyang who was the target of a high-level smear campaign conducted by state media organs soon after his arrest and not allowed to see his lawyer for six months. And the suspended sentences mean that they can now go home to be with their families. But the lighter sentences came with a cost. The plaintiffs had to admit they were guilty of "gathering a crowd to disturb social order" even though their efforts to organize workers to engage in collective bargaining had the opposite intention, which was to get workers to the bargaining table and find a peaceful, orderly way to resolve their dispute. And as already mentioned, their sentences mean they may have to abstain from the work that they excelled in, which was to organize and train workers on collective bargaining.

The politics of this case are interesting and there should be more analysis forthcoming. The impetus for the arrest of these activists appears to have come from the center, but local law enforcement were charged with carrying out the arrest, investigation and prosecution of this case. In the past, Guangzhou and Panyu law enforcement had cooperated with Feiyang on a number of occasions and knew him well. Did local law enforcement officials play a role in getting a lighter sentence for these plaintiffs and making the best of a difficult situation? Interestingly, while the media reports of the trial focused on Feiyang's closing statement in the trial concerning foreign funding and involvement, the court verdict made no mention of foreign funding and involvement. Instead, it offered a more narrow argument and set of evidence detailing how the plaintiffs were making efforts to encourage workers in the Lide factory to go on strike. In other words, it looked at the case from the perspective of social stability rather than national security in an effort to lower the sensitivity of the case and justify a lesser sentence for the plaintiffs.

Below are many of the media reports that came about soon after the sentencing was announced. 

English-language media reports

China court sentences trio for disturbing social order-

Chinese-language media reports

曾飞洋等聚众扰乱社会秩序案一审宣判 三被告认罪_财经网 - CAIJING.COM.CN                        

广东劳工NGO案今宣判 “首要分子”曾飞洋判三缓四_手机凤凰网

Sunday, September 25, 2016

Trial for Guangzhou Labor Activists Scheduled for September 26

Much of the recent news about Chinese civil society has centered around the trial of China’s rights defense lawyers such as Pu Zhiqiang, Zhou Shifeng, and most recently Xia Lin who was sentenced to 12 years in prison. All of them deserve a great deal of attention for the courageous and important work they do in taking on difficult cases.

In this post, I want to make sure that Chinese labor activists and workers are not neglected because they are some of the most active and potentially influential civil society actors in China. Worker strikes and protests are at historically high levels and worker self-organizing is taking place among Walmart China workers, teachers, and taxi drivers, among others.  In some cases, workers are assisted in their organizing efforts by activists working for independent labor NGOs in provinces like Guangdong.  Such is the case of the Guangzhou-based Panyu Workers Center which helped workers in dozens of factories organize and engage in collective bargaining with their employers. In doing so, they acted in the role of de facto trade unionists doing the job that China's official union, the All-China Federation of Trade Unions (ACFTU), should do but does not. In their most recent successful case, the Panyu Center helped workers in the Taiwanese-owned Lide Shoe Factory reach a collective agreement with management for economic compensation and unpaid overtime and social security totaling nearly 120 million yuan.

A number of the staff of the Panyu Center are now about to go on trial tomorrow (September 26, 2016) at the Panyu District Court on criminal charges of “gathering a crowd to disturb social order” which carries a maximum five-year prison sentence. The staff on trial are Zeng Feiyang, the director, and Zhu Xiaomei. They will be joined by another labor activist who is not on staff at the Panyu Center, Tang Huanxing. A third Panyu Center staff member, Meng Han, had his trial postponed when local prosecutors sent his case sent back to the police for further investigation.

This is a high-profile case that began on December 3, 2015 when a number of labor activists in Guangzhou were rounded up and interrogated. Many were later released, with the exception of staff from the Panyu Center who were clearly the center of this attack. Unlike previous cases of repression against labor groups which originated from local authorities, this one showed clear signs of coming from Beijing. Soon after the crackdown, China’s main state media organs – the New China News Agency, CCTV and the People’s Daily – launched a smear campaign against the Panyu Center, and Zeng Feiyang in particular.

I encourage readers of this blog to follow this case closely to see how authorities of the Communist Party of China – the party of workers and farmers – treat some of China’s most prominent labor activists. The Panyu Center staff have already had their rights violated by the police and other authorities on a number of occasions. The state smear campaign, which sought to try them in the media, before they even had a court trial, was only the most brazen example. We also know that the police did not allow them to see their lawyers for several weeks. In Feiyang’s case, it took six months before he was able to finally meet with his lawyers.  In addition, their family members weresubjected to physical threats and verbal harassment when they did not cooperate or, in the case of Feiyang’s mother, after she filed a lawsuit against the state media organs for defaming Feiyang's character.

I will be posting more on this case once we hear the results of the trial. Hopefully, I will have some good news to report.

Sunday, September 11, 2016

Some Insights from a Q&A with the Ministry of Public Security on the Overseas NGO Law

I apologize for not posting as often as I would have liked over the past two months. I've been too busy trying to catch up on work after my summer vacation and was traveling quite a bit last month.

I thought I'd start my first post this month on the following summary of a recent Q&A session between the European Chamber of Commerce and the Foreign NGO Management Bureau of the Ministry of Public Security (MPS). The Q&A was sent to a listserve I participate in and appeared in the form of a newsletter dated August 10, 2016 from the international law firm Hogan Lovells.

It's now less than four months before the law goes into effect and so far we have had very little information from the MPS regarding the law, so this Q&A is important because it provides us some initial indications from the MPS about how it understands the law.

Below is the text of the Q&A, after which I discuss my main takeaways.

China's New Law on Foreign NGOs: Q&A

Summary of Meeting with The Foreign NGO Management Bureau, Ministry of Public Security

The Ministry of Public Security (the “MPS”) recently held a question and answer session in Beijing with the European Chamber of Commerce, in order to address various questions about the new Foreign NGO Management Law (the “NGO Law”). The responses are only verbal interpretations by MPS, so they remain subject to change, but the information offers some perspective of the relevant Chinese regulators.

Q: When will implementing rules and guidance for the NGO Law become available?

A: The MPS Foreign NGOs Management Bureau currently is in the process of creating a foreign NGO registration administration guideline and a catalogue of professional supervisory units for foreign NGOs. Those two documents will serve as implementation guidelines for the NGO Law. MPS estimates that it will release those documents online around October 2016.

Q: As to the carve-out provision under Article 53 of the NGO Law (which appears to specifically carve out from the NGO Law cooperation between foreign and Chinese schools, hospitals, and academic organizations) does the Chinese counterpart need to be the same-type institution as the foreign party?

A: Yes. Article 53 of the NGO Law is intended to address exchange and cooperation between two organizations of the same type, e.g., foreign school to Chinese school, or foreign hospital to Chinese hospital. If not the same type, MPS may need to decide on a case-by-case basis.

Q: Will those WFOEs already set up by foreign NGOs in China be permitted to continue their operations in China under grandfather approval rules? Is a WFOE still a viable option for a foreign NGO to enter into China if it uses an overseas for-profit holding company?

A: For WFOEs set up by a for-profit corporation with a foreign NGO as the ultimate shareholder, they can continue in operation as long as they will do ordinary businesses as normal for-profit companies and comply with applicable law. They can donate their money or otherwise use their money for public interests or charity purposes in China. However, the WFOE cannot be used to solely carry out “NGO” activities on behalf of the foreign NGO to promote the mission of the foreign NGO.

Q: Is a foreign university that comes to China to recruit students required to comply with the NGO Law?

A: No. Foreign universities may engage in recruiting activities in China through overseas study agencies that have a license from the Ministry of Education (MOE). These activities are not subject to the NGO Law, as they are subject to MOE regulations.

Q: What types of for-profit activities carried out or sponsored by a foreign NGO will be forbidden under the NGO Law? Will foreign NGOs still be allowed to have income generated from activities in China?

A: The NGO Law prohibits foreign NGOs (including their representative offices registered in China) from engaging in or providing financial support to any for-profit activities. However, this doesn’t mean income is not allowed to foreign NGOs. Whether it is for-profit or not-for-profit is determined by the purpose. Foreign NGOs should not focus on earning a profit and providing dividends for shareholders/owners.

According to Article 36, foreign NGO representative offices may enjoy tax benefits in accordance with law. Also, Article 21 permits foreign NGOs to use “other funds legally acquired within China” for their activities in China. This means income or revenue is allowed as long as the foreign NGO keeps its not-for-profit nature, namely, will not distribute dividends or profit to its shareholders/owners. For example, it is permissible for a foreign NGO to charge a fee for providing services or licensing intellectual property rights to a Chinese party.

Q: For those representative offices/affiliates already established by foreign NGOs and registered with the Ministry of Civil Affairs (the “MOCA”) or the State Administration for Industry and Commerce (the “AIC”), will they still be acknowledged as legally existing under PRC law and permitted to continue their operation under a grandfather and/or transition rule?

A: The NGO Law will be effective on January 1, 2017. However, there will be a transition period for existing foreign NGOs that are registered with the MOCA or AIC to complete the process of transferring from the original registration authority to MPS by submitting certain supplemental documents, and for new foreign NGOs to apply for relevant certificates and go through relevant administrative process. MPS acknowledged the registration process may take some time after the effective date of the NGO Law.

The 29 foreign foundations that were previously registered with MOCA will be handed over to MPS and will be administered by MPS.

Q: Which MPS department at which level will be mainly in charge of the foreign NGO registration process?

A: The foreign NGO registration process will be administered by the Exit and Entry Administration Authority of provincial level service portals.

Q: Is it correct that after the NGO Law becomes effective, there will be only two paths for foreign NGOs to conduct activities in China?

A: Yes. There are only two ways for foreign NGOs to carry out activities in China under the NGO Law:

1. Establish a representative office for long-term activities with the approval of the Professional Supervisory Authority and registration with the MPS; or

2. Cooperate with a Chinese Partner for temporary activities, and have the Chinese Partner apply for an approval of the competent authority and file and record the temporary activities with the MPS.

Q: Are there any further guidance/requirements on temporary activities conducted by foreign NGOs and their Chinese Partners?

A: Foreign NGOs that have not established a representative office in mainland China to carry out temporary activities must cooperate with a Chinese Partner. There are only four types of Chinese Partners. They are government agencies, people’s organizations, public institutions, or social
organizations. Corporations and individuals cannot be Chinese Partners.

Q: What is the intent of the requirement for foreign NGOs to make filings on their proposed temporary activities?

A: The reporting requirement is not to set limitations on a NGO’s temporary activities, but mostly to record the overall status of activities for statistical purposes. When temporary activities (such as disaster relief) must be carried out in emergency situations, it is permissible to file after the activities. The filing process is not expected to become a barrier for serving a good cause.

Q: For foreign corporations doing corporate social responsibility activities in China, is it still possible for them to provide funding to Chinese entities in mainland China as a donation or grant?

A: A corporate foundation based outside China cannot give money directly to Chinese entities as a donation or granting, but instead may transfer funds to an affiliate corporation or contracting third-party corporation offshore and have that corporation fund its Chinese partner for charity activities.

Q: Can foreign NGOs do fundraising in China?

A: No. A foreign NGO cannot set up entities in China to do fundraising, whether public offering or private offering.

Q: Can foreign industry associations develop membership in China?

A: No. A foreign industry association cannot develop membership in China.

My Takeaways

1)  The Q&A tells us that the MPS has set up a special department, the Foreign NGO Management Bureau, to deal with the law. It does not tell us how many staff they are planning to hire, or whether there will be a similar office set up in the provincial Public Security departments.

2)  It appears that the MPS will not have implementing regulations out before the law goes into effect. Instead the MPS states it will provide a set of guidelines, and a list of qualified professional supervisory units for foreign NGOs thinking about registering a representative office. This announcement is not all that surprising. The Ministry of Civil Affairs (MCA) is only now coming out with implementing regulations for the Charity Law which went into effect September 1, 2016 and they have had a running start because they've been working on implementing guidelines for the last few years. Unlike MCA, the MPS has no experience managing NGOs and to my knowledge has not been working on implementing guidelines. Unlike the Charity Law which has been in the drafting phase for 10 years, the Overseas NGO Law came out quite suddenly and MPS may simply not have the expertise or staff to develop the necessary implementing regulations within a short period of time.

3) The response to the question about whether WFOEs set up by NGOs can continue under the current form is interesting because it appears the MPS is willing to be flexible and allow NGOs to continue operating in China as a representative office of a WFOE as long as "the WFOE cannot be used to solely carry out “NGO” activities on behalf of the foreign NGO to promote the mission of the foreign NGO." The wording here is strange and reflects in my opinion a misunderstanding of what NGOs or nonprofits are and do, but I won't get into that here. As I read this, the WFOE needs to be running some for-profit, commercial activities alongside its "NGO" activities to justify its WFOE form. What the MPS does not clarify here is whether the use of WFOEs will only be allowed for those NGOs that already had this type of arrangement prior to the law going into effect, or will it also allow NGOs to continue this practice after the law goes into effect? In any case, the WFOE arrangement may provide a possible alternative for NGOs that will be unable to find a willing professional supervisory unit and thus be unable to register a representative office. It's not clear, however, just how long the MPS will allow this WFOE arrangement. The MPS mentions a transition period for foreign NGOs that are already registered with MCA or with the Administration of Industry and Commerce (AIC) but doesn't specify how long that transition period will be.

4) For those NGOs thinking of carrying out "temporary activities," the Q&A confirms something that I had been wondering and that is the "filing a record" (bei'an) procedure is meant to inform the MPS about the "activities" and will not require an approval from the MPS. Of course, if the activity requires approvals from other government departments, then those approvals should be submitted as part of the record, but MPS itself does not have to approve the activity for it to proceed. And the MPS also confirms that a NGO's Chinese partner for the purpose of carrying out the "temporary activity" cannot be a corporation, although I still cannot figure out why they made that rule.

5) On the question of foreign corporations working on CSR projects with Chinese partners, this appears to be ok. The MPS person answering the question confuses a foreign corporation doing CSR with a corporate foundation which is a NGO. Many foreign corporations don't necessarily do CSR through their corporate foundation, but through their CSR department which would seem to be fine as long as the CSR department is part of the company which is for-profit and thus would not come under the law.