Nongovernmental Organizations and the Development of Civil Society

FINDINGS

• New regulations on foundations demonstrate some change and liberalization, but maintain the principle of firm government control present in other civil society regulations.
• Chinese civil society organizations continue to suffer from significant internal problems, such as limited organizational capacity and poor self-governance.

Since the onset of economic reform in the late 1970s, Chinese government domination over the economic and social life of its citizens has diminished. Non-profit associations and organizations with varying links to the Communist Party and government have begun to grow as the role of government in society recedes. The growth of these organizations suggests the gradual emergence of a more pluralistic Chinese society. But numerous factors hamper the development of Chinese civil society, including a restrictive regulatory environment, lack of funding, and limited capacity for self-governance.624 Two main developments affecting Chinese civil society occurred over the past year: the passage of national Regulations on the Management of Foundations (Foundation Regulations) 625 and the deepening reform of China's public institutions.

The Foundation Regulations attempt to channel the resources of a growing economy into addressing social problems by defining a framework for both private and public foundations. The Foundation Regulations are the first major change to the legal framework governing Chinese civil society since the government issued rules regulating two other types of non-governmental organizations in 1998.626

The Foundation Regulations maintain the Chinese government's continued control over civil society institutions.627 The Foundation Regulations retain the requirement that a foundation must find a sponsor organization in order to register.628 This requirement, also present in the 1998 regulations, is one of the most substantial restrictions on the development of an independent civil society in China. The government limits qualified sponsor organizations to government bureaus and Party mass organizations.629 Sponsors provide ''guidance'' for the civil society organizations they supervise and participate in their annual review.630 Control over sponsorship gives Chinese authorities an effective weapon against organizational activities they deem to be dangerous. Many Chinese civil society organizations remain appendages of their sponsors,631 inhibiting the emergence of an independent civil society and limiting the ability of Chinese civil society organizations to check government power.632 Although some officials and academics debate the wisdom of the tight controls over civil society that the sponsor requirement imposes, its retention in the Foundation Regulations indicates firm support by the Chinese leadership.633

Despite the sponsor requirement, the Foundation Regulations contain some change and liberalization. The Foundation Regulations lack the restrictions of prior civil society regulations which bar the registration of more than one organization addressing the same issue in a particular administrative region.634 The Foundation Regulations also differ from the 1998 regulations on other civil society organizations by permitting representative offices of foreign foundations to register and be treated like Chinese foundations.635 Equal treatment is a mixed blessing, however, since the Foundation Regulations also explicitly extend the sponsor requirement to the representative offices of foreign foundations operating in China.636

Chinese officials assert that the Foundation Regulations represent the first step in an overhaul of all Chinese civil society regulations. Revisions to the 1998 regulations should be completed by 2005.637 According to these officials, these revisions should parallel the Foundation Regulations in explicitly providing for the registration of other foreign NGOs in China.638

Born in the 1950s, public institutions historically have been state-controlled organizations that provide public services in science, education, culture, health, and sports.639 As of 2001, more than 1 million Chinese public institutions existed, employing some 25 million people.640 Market reforms have created serious economic pressures on Chinese public institutions, many of which are heavily dependent on state funding. Over the past 15 years, and particularly since the end of the 1990s, the Chinese government has been gradually reducing the level of financial support for public institutions.641 This policy has resulted in the gradual privatization of a number of public institutions, including arts troupes, Xinhua bookstores, and basic health care providers.642 These organizations increasingly function as private economic actors seeking independent revenue, rather than as administrative units of the Chinese state.643 This gradual independence may lead public institutions to evolve into a component of a more diverse Chinese civil society.

At present, the government does not have a coherent reform plan for public institutions in China.644 This vacuum, combined with the scattered efforts of public institutions to raise funds, has led to serious declines in certain essential public services. One example is the collapse of rural health care and health monitoring.645 Some government officials and scholars recently have proposed structural reforms that would gradually transform some public institutions into enterprises, some into governmental entities, and others into civil society organizations.646

Many Chinese civil society organizations continue to suffer from internal weaknesses as well. Chinese civil society organizations may become dominated by a few individuals whose actions are seldom constrained by formal rules.647 Corruption, poor organizational capacity, lack of planning, and weak institutional continuity sometimes have also been problems.648 Over the past decade, the beginnings of a more diverse Chinese civil society have emerged, but its future development depends on removing regulatory obstacles and building organizational and management capacity.

Notes to Nongovernmental Organizations and the Development of Civil Society

624 Congressional-Executive Commission on China, Annual Report 2003, 2 October 03, 54-7; Sharon Liang, ''Walking the Tightrope: Civil Society Organizations in China,'' China Rights Forum, No. 3, September 2003, 11-5. Although the discussion in the text focuses on broad trends, the Commission continues to monitor individual issues and cases related to Chinese civil society. Although the general trend has been toward less government intervention in civil society, examples of arbitrary government control do exist. ''Three National Social Organizations Suspended'' [Sange quanguoxing shetuan bei tingzhe], Southern Metropolitan Daily, [Nanfang dushi bao], 12 November 03, (reporting that the Ministry of Civil Affairs (for the first time since 1950) suspended three national social organizations-the Chinese Behavorial Law, Life Sciences, and Decorative Architecture Associations-for establishing unauthorized sub-branches).

625 Regulations on the Management of Foundations [Jijinhui guanli tiaoli], issued 8 March 04. They represent a revision of the prior, relatively vague 1988 rules on the same topic. Rules on the Management of Foundations [Jinjinhui guanli banfa], issued 27 September 88.

626 Companion regulations on social organizations (shehui tuanti) (SOs) and non-govern-mental, non-commercial enterprises (minban feiqiye danwei) (NGNCEs) were issued in 1998. Regulations on the Registration and Management of Social Organizations [Shehui tuanti dengji guanli tiaoli], issued 25 September 98; Temporary Regulations on the Registration and Management of Non-Governmental, Non-Commercial Enterprises [Minban fei qiye danwei dengji guanli zanxing tiaoli], issued 6 November 98. SOs are voluntary associations such as academic or professional groups, while NGNCEs are nongovernmental service providers, such as schools, hospitals, sports organizations, or employment service organizations. See, e.g., To Serve the People: NGOs and the Development of Civil Society in China, Staff Roundtable of the Congressional-Executive Commission on China, 24 March 03, Written Statement of Qiusha Ma, Assistant Professor, East Asian Studies, Oberlin College.

627 For an extensive discussion of the Foundation Regulations and their content, see Carl Minzner, ''New Chinese Regulations on Foundations,'' International Journal of Civil Society Law, April 2004, 110-5.

628 Regulations on the Management of Foundations, art. 9. In Chinese, sponsor organizations are ''yewu zhuguan danwei.'' The prior 1988 rules provided for industry supervision of foundation activities by the People's Bank of China. However the sponsor requirement language in the Regulations has been imported from the prior 1998 regulations on SOs and NGNCEs.

629 The Foundation Regulations technically allow State Council bureaus and organizations ''so authorized'' by the State Council to serve as sponsor organizations. Regulations on the Management of Foundations, art. 7. Similar language exists in the SO and NGNCE regulations. Chinese sources indicate the only actual approved sponsor organizations are government bureaus and mass organizations. The 2003 annual review of approved national social organizations lists their corresponding sponsor organizations and illustrates the party/government links with Chinese civil society organizations. Ministry of Civil Affairs (MOCA), ''Report on the 2003 Annual Review of National Social Organizations,'' [Quanguoxing shehui tuanti 2003 niandu jiancha qingkuang gonggao], 3 June 2004, . 630 Regulations on the Management of Foundations, art. 35.

631 Commission Staff Interview.

632 Sponsorship creates other difficulties for Chinese civil society as well. The bureaucratic difficulty of finding a sponsor constrains the formation of completely apolitical organizations (i.e., bird-watching associations). It also raises problems of corruption by giving government and Party organs a political tool to extract money or favors from organizations they sponsor. Wealthy organizations, such as industry associations in eastern China, are able to capitalize on their economic clout to purchase or extort a measure of independence from their sponsors and the local government. Industry associations around Shanghai have been successful in gradually shaking free of government restrictions. ''Shanghai: China's Largest NGO Reform'' [Shanghai: quanguo zui da guimo NGO gaige], Southern Weekend [Nanfang zhoumo], 25 March 04, . In contrast, weaker organizations, or those unable or unwilling to find sponsors, must either register as businesses or operate as illegal, unregistered groups.

633 According to Chinese news reports, although initial MOCA drafts of the Regulations omitted the sponsorship requirement, the Legal Affairs Office of the State Council expressly insisted on its inclusion. ''Who is Stopping China's Wealthy From Becoming Philanthropists? '' [Shei zuai le zhonguo furen chengwei cishan jia], 21st Century Business Herald [21 shiji jingji baodao], 1 March 04, ; Commission Staff Interview.

634 More specifically, prior regulations bar the registration of multiple SO or NGNCE seeking to address the same problem in a particular administrative area, theoretically allowing but one environmental SO to be registered for a particular province, for example. The Commission's 2003 Annual Report noted that such ''type-locality'' limits posed a significant impediment to further developments of Chinese civil society. CECC, Annual Report 2003, 56.

635 Regulations on the Management of Foundations, art. 13. Many foreign NGOs present in China, including foundations, have long operated in a grey legal zone, since MOCA has long been unwilling to register foreign NGOs without general regulations about how to manage them.

This has been MOCA practice since at least 1990. Response of MOCA's Social Organization Management Division Regarding the Establishment of a Japanese Social Organization in Beijing [Minzheng bu shetuan guanli si guanyu riben ren zai jing chengli riben ren huishi de dafu], issued 20 February 90 (stating that MOCA will ''maintain contact'' with organizations consisting of non-Chinese nationals operating ''publicly'' and will not ''actively'' seek to make contact with organizations which are ''not yet operating publicly'' as long as they respect relevant Chinese laws). Such organizations are to be informed that they cannot yet register as social organizations, but that relevant regulations are in the process of being drafted. Ibid. Some foreign NGOs have registered as for-profit corporations and some have been granted specific individual approval for their registration, while others operate without any official registration. Commission Staff Interview.

636 Regulations on the Management of Foundations, art. 7. How the Chinese government will actually apply this requirement remains to be seen. MOCA may conceivably play the role of both sponsor and registration organ for foreign foundations. Commission Staff Interview.

637 According to Chinese sources, this should encompass revisions to the 1998 regulations governing both SOs and NGNCEs. Commission Staff Interview.

638 Commission Staff Interview. Whether these proposed revisions will also apply the sponsor requirement to foreign NGOs is currently unclear.

639 Project Team on ''Reform of China's Public Institutions and Development of China's Non-Profit Organizations,'' ''Reform of China's Public Institutions,'' International Journal of Civil Society Law, January 2004, 7-8. Examples include hospitals, schools, arts groups, and academic research organs. As state-sponsored, state-funded service providers, they technically differ from the SOs and NGNCEs, the latter being theoretically independent of the state (but in reality heavily influenced via the system of sponsorship). In reality, the decrease in state funding for public institutions and their increasingly independent behavior has meant that the border between them and NGNCEs (which are privately operated service providers) is increasingly vague. The division between China's public and private schools is a good example. Many Chinese public schools manage NGNCE schools on the side in order to earn money.

640 Ibid., 8.

641 Ibid., 9-12.

642 ''Xi'an Public Institution Reform: Members of the Yisu Troupe Search For the Future'' [Xi'an shiye danwei gaige: yisushemen xunzhao weilai], 21st Century Business Herald [21 shiji jingji baodao], 21 April 04, .

643 Ibid.

644 Project Team, ''Reform of China's Public Institutions,'' 14.

645 Joshua Muldavin, ''China's Poor Left Behind,'' International Herald Tribune, 8 May 03, .

646 For a discussion of some possible alternatives, see Ge Yunsong, ''Nonprofit Organizations and the Reform of China's Public Institutions,'' International Journal of Civil Society Law, January 2004, 33-8; Fan Hengshan, ''Smoothly and Orderly Promoting the Reform of China's Public Institutions'' [Pingwen youxu tuijin zhongguo shiye danwei gaige], Finance [Caijing], 20 April 04, 82-4.

647 Qiusha Ma, ''Classification, Regulation, and Managerial Structure: A Preliminary Enquiry on NGO Governance in China,'' July 02, 28-30, .

648 Commission Staff Interview. Organizations seeking to support the growth of Chinese civil society might attempt to address these issues through training programs that provide both structure and responsibility to nascent Chinese NGOs.