The rising role of “hub-style” organizations as stewards of the party (Pt. 1)

This post is part 1 of a guest blog by Ryan Etzcorn, a Fulbright Research Fellow (2018-2019) and a graduate of the University of Michigan’s Gerald R. Ford School of Public Policy and Lieberthal-Rogel Center for Chinese Studies (MPP & MA). 

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By the end of 2018, I grew pretty comfortable with the bullet train commute between Guangzhou and Shenzhen. The past 40 years of Reform and Opening Up have transformed this corridor into one of the most important economic regions in the world. Throughout the Pearl River Delta, regional leaders take every opportunity to parade their proud tradition of leadership in manufacturing, technology, and record-breaking infrastructure. In this corner of China, the obsession with “breakthrough innovation” has advanced to feel like a regional pastime. But to some of the region’s Party-state leaders and private “social entrepreneurs”, breaking down barriers of time and space for more GDP is not enough. Instead, these leaders have re-dedicated themselves to a paradigm shift which seeks to erode sectoral barriers between government, business, and charity for the provision of “public benefit” (gongyi). 

In both Shenzhen and Guangzhou, social workers, business leaders, leading government officials, and academics are collaborating in WeChat groups, conferences, and salon discussions and using the same slogans to emphasize a more coordinated era of “public governance.” It is time, they say, to heed Xi Jinping’s call for “collective community building, collective governance, and collective sharing” and use it to replace the tired government/business/nonprofit sectoral boundaries of bygone eras and foreign origins. Under the leadership of the Party, “participatory” community governance will finally be realized, starting with Guangdong.

As both a researcher and practitioner, I arrived in August of 2018 on a research fellowship to explore how new developments in Chinese policy and law were propelling changes in the fabric of its civil society. Before that, in the years leading up to the paired release of the Charity Law and Overseas NGO Law in 2016, I spent two years of a graduate program at the University of Michigan examining Chinese civil society from several angles, including archival work and interviews with grassroots organizations across China. The passing of those two highly anticipated laws came and went and I chose Guangzhou and Shenzhen to study their implementation.

For me, the rationale for wanting to study new “public benefit” (gongyi) developments in Guangzhou and Shenzhen felt obvious. Both are situated under the same national and provincial laws and regulations. Other Guangdong cities have been notable for standout social policy experimentation, but the province's top rank in philanthropic giving has much to do with its two mega cities. Guangdong also boasts special funds for social organization capacity building and trails only Jiangsu Province in the sheer number of social organizations that have been registered to date.  

Both Shenzhen and Guangzhou have more in common with each other than either does with most other Chinese cities, and yet some contrasts in public welfare delivery regimes remain profound. The much older city of Guangzhou is known in the region for more than 450 state-engineered “family integrated social service stations” providing wrap-around services that are administered by China’s largest legion of social workers. In comparison to Shenzhen, Guangzhou is importantly recognized for the more exclusive role that government plays in resourcing and fostering social organizations.  

The younger, sleeker Shenzhen is known as a hotbed for major technology firms and real estate investment. Huge tech companies and Hong Kong cross-border flows provide more diverse options for social organization funding, even while the Ministry of Finance has pushed special pilot efforts to rationalize and strengthen government procurement of social services. Shenzhen also sprang into action early with one of the first local governments in China to capitalize a series of community foundations. Along with Shanghai, Beijing, and Chengdu, Shenzhen’s government has subsidized social impact investment pilot projects, subsidized fixed costs for social enterprises, and even issued social impact bonds.  Although clear differences persist, the backdrop they provide makes commonalities in policy design even more notable and potentially telling for broader trends in the PRC.

Shaping a sector: introducing “hub-style organizations”

Amidst the blur of WeChat zines and conference forums I attended since Fall 2018, an obvious pattern of institutional leadership emerged across both cities. Surprisingly, it wasn’t quite the government itself nor the grassroots groups holding the microphone or building most of the WeChat groups. Instead, it looked like I was witnessing a takeover by the organizations “in between”. In China’s current social sector, to be a “hub-style organization” (shuniu xing zuzhi) has become a term of pride that resembles a notion of being higher up in a sort of institutional “value chain”.

In the past month, I spoke with leaders at state-backed “social organization institutes”, city-wide social organization  associations, the Ministry of Civil Affairs (MoCA), grassroots groups, and leading “mission-oriented” consulting groups in both Shenzhen and Guangzhou. My first rounds of interviewing distinguished two major types that were viewed as key for building financial capacity and sustainability among grassroots groups: quasi-governmental associations and incubator bases. Both of these hub categories are managed on some level by government institutions or other quasi-state institutions, such as the All-China Federation for Women or the Communist Youth League.

Social organization associations, social organization “institutes“, and charity federations collectively make up the first category that are mostly registered as civil non-enterprise units, though they actually function as directly-reporting auxiliaries of specific bureaus or departments within the MoCA.^[1] Though they mostly exist at the city level, district versions also exist in both Shenzhen and Guangzhou. Each of the three types in this category also served as a “platform” by convening social organizations, producing research and propaganda for social organization consumption, disseminating data on the sector, or providing free training services. Social organization associations in particular are being increasingly tasked with serving as a depository for annual reports required of all registered organizations, where the data is pooled and later conveyed to the MoCA.

Incubators make up the second category and are established by local government initiatives at the city, district, and sub-district levels in both Shenzhen and Guangzhou. They also represent a more collaborative approach combining state subsidies, operating contracts with civil non-enterprise units, in-kind donations from local businesses, and training services from professional consulting firms like NPI. Without fail, every incubator felt obliged to stress that participation in an incubator space does not merely provide office space, but also includes opportunities for training and “resource docking” opportunities (fundraising training, grant-writing, or help with government procurement applications).

For many organizations, these hub organizations are key forums both for demonstrating loyalty to the Party and gaining access to critical resources. Both categories of hub-style organization are charged with promoting “Party-building” among their member institutions, and those grassroots organizations that are amenable to creating Party committees and networking those committees are systematically favored by evaluation criteria and access to hub-provided resources. Service-oriented (non-advocacy) organizations with missions that match local government goals are also favored by incubators that provide subsidized resources. Even social organization interviewees that expressed wariness toward government cooptation earnestly wished they could get a coveted spot in an incubator, if only for the substantial benefits, like free rent or help with registration. The problem now is that most incubators have been at capacity for two years or more in these two cities, with long waiting lists for entry.

In part 2 of this blogpost, Ryan will discuss how “hub-style” organizations are being utilized by the Party-state, covering two main themes: cross-sector coordination and “building capacity.”

This blog is not an official site of the Fulbright Program or the U.S. Department of State. The views expressed in this blogpost are entirely Ryan’s and do not represent the views of the Fulbright Program, the U.S. Department of State, or any of its partner organizations.

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^[1] Social Organization Associations and Social Organization Institutes operate under the the Social Organization Management Bureau at the municipal-level MoCA for each city, though the social organization Institute in Shenzhen was initiated by a combination of the social organization Association and Charity Federation, which are directly supervised by MoCA. According to interviews and official info, the Guangzhou Charity Federation is directly supervised by the Emergency Relief & Charity Affairs Office at the municipal-level MoCA. In Shenzhen, the Charity Federation is directly supervised by the municipal MoCA, but not by any particular office of the municipal MoCA, like in Guangzhou.

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