China’s Implementation of the Overseas NGO Management Law

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Editor’s Note

This article originally appeared in Southern Weekly (南方周末) on the 9th of February 2017. It was written by Tsinghua University professor Jia Xijin. Below is CDB’s translation of the unabridged version authorized by the author.


On January 1 2017, the “People’s Republic of China’s Overseas NGO Domestic Activities Management Law” officially went into effect. One month later, the first group of overseas NGOs’ Representative Offices obtained their registration credentials in Shanghai, Guangzhou and Beijing. The low-key process of drawing up the law attracted widespread attention, but the legislative process is currently still unfolding.


Overseas NGOs in China: companions in reform

Overseas non-governmental organizations, abbreviated as overseas NGOs, are specifically defined as foreign-established non-governmental organizations whose operations take place in China. They are also routinely called “Overseas Civil Society Organizations in China” (境外在华民间组织).  The origin of contact between China and NGOs can be traced back to the beginning of the twentieth century, when China’s contacts with western civilization began to increase dramatically. A lengthy letter addressed to Rockefeller concerning his 1905 Charitable Enterprise Executive Plan is stored in the Rockefeller Archives. It fervently advocates for him to set his sights on the Far East, particularly China: “throughout world history, this is the first time that all nations and islands are opened up”.

In 1916, the Beijing Union Medical College was established through funds from the Rockefeller Foundation. In the 1950s China and the international community drifted apart, and despite the onset of the McCarthy era’s Second Red Scare in the US the Ford Foundation decided to swim against the current. Thereafter, the Foundation’s board of directors decided to “enhance contributions to the understanding of other nations instead of rolling out plans to strengthen America’s efforts in countering the world”. During the heyday of the White Terror era, when it became taboo to research in China, it supported Chinese studies in the United States, and it continued to store up talent and knowledge for the day when US-China relations would be restored.

Periods of robust overseas NGO activity in China bloomed alongside China’s own reforms. In 1972, the National Committee for Sino-American relations and the US Table Tennis Association invited China’s national ping-pong team to visit the US, thus beginning the thawing of China’s isolation, and this became known as “Table Tennis Diplomacy”. The 1978 Third Plenary Session of the 11th Central Committee, in response to the needs of Sino-international exchange and rapid economic growth, invited the first group of overseas NGOs to return to China.

In 1978, the Ford Foundation began its Chinese projects. In 1988, the State Council officially approved the first office in Mainland China;

In 1979 the Asia Foundation, in coordination with the State Council’s Science and Technology Commission, convened China’s first international computer seminar;

In 1980, the World-Wide Fund for Nature (WWF) became the first environmental organization to be invited to China;

In 1984, with the support of the United Nations Development Program, China’s Ministry of Foreign Trade and Economic Cooperation sent a special task-force to four European nations to seek cooperation with more than fifty NGOs;

In 1985, China’s International Economic and Technical Exchange Centre established the International NGO Liaison Office, whose aid agreements with Oxfam, Germany’s Agricultural Action and Holland’s International Development Initiative went into effect the following year.

In 1995, the United Nations World Conference on Women convened in Beijing, with the city hosting an unprecedented 3,000 overseas NGOs. We can see clearly how NGOs developed parallel to China’s “Opening-up and Reform Policy”, touching upon fields such as education, health, poverty alleviation, environmental protection, international diplomacy, grassroots democracy, judicial training, and policy legislation.

In 1994, for example, the International Republican Institute (IRI) in conjunction with the Chinese Ministry of Civil Affairs conducted village election observations in Fujian and Guangxi.

In 1998, the Carter Center accepted an invitation from the Foreign Affairs Committee of the NPC to observe the general election of the Chongqing People’s Congress. Afterwards, the Carter Center cooperated with the government and used previous experiences to revise clauses.

There is a relationship between the way that official Chinese attitudes towards overseas NGOs are once again becoming more sensitive and the 2005 Colour Revolutions. There were changes of regime in the Commonwealth of Independent States and in North African and Middle Eastern countries, and some attributed this to the evolution of Western strategy, and called for vigilance regarding the role overseas NGOs had played. In 2009, the State Administration of Exchange Control sent out an “announcement regarding domestic institutions’ management of foreign exchange donations”, which reinforced the management of inbound and outbound funds. There was also a gradual reduction of the overseas NGO programs on democracy, reform, legislation and public policy that had been numerous in the nineties.


Legislation: Safety and Rule of Law

During the long period of the “Reform and Opening-up” policy, the Chinese government fumbled with its “Three Nos Policy” towards overseas NGOs (no recognition, no banning, no contact), which in practice handed over policy-making authority and judgement to regional departments. Before the enactment of the “Overseas NGO Domestic Activities Management Law” (abbreviated to Overseas NGO Law), overseas NGOs were fundamentally outside of the purview of domestic laws that governs Chinese social organizations. Social organization management departments explored whether to incorporate them into a unified management system, and in 2004 the “Regulation of the Management of Foundations” granted overseas NGOs in China registration permission to establish representative offices, which was a very daring first step. Up until 2016, with the enactment of the Overseas NGO Law, there were only twenty-nine overseas NGOs that set up representative offices.

Also in 2004, Shanghai’s Civil Organization Administration launched a pilot project for foreign chambers of commerce and overseas public welfare organizations to register as private non-enterprise units, approving the establishment of foreign private enterprises in Shanghai such as the Japanese Chamber of Commerce and Industry and the Million Tree Project, meanwhile accepting the Ministry of Civil Affairs Commission’s draft of the “Measures for the Administration of Registration of Foreign Social Organizations”. In 2008, Yunnan was one of the observation points for the Ministry of Civil Affairs’ reform and innovation of six social organizations, undertaking a pilot program of overseeing the registration of overseas NGOs. In 2009 the “Standard Overseas NGO Activities Provisional Regulation of Yunnan” was passed, and in 2010 the representative offices of Oxfam and thirteen other overseas NGOs were the first ones to obtain official records. The attempt by Overseas NGOs to register into China’s unified social organization management system was accompanied by the intensification of China’s political sensitivity towards overseas NGOs, but in the end a unified social organization management system was not officially established.

Since the 18th CPC National Congress in 2012, the current government’s approach to national governance has shown some differences from the Deng Xiaoping era concept of “crossing the river by feeling the stones”. It has been characterized by the establishment of regulations and clearer systems and the unified deployment of forces. When it comes to the management of overseas NGOs, during the third session of the 18th CPC National Congress, the “Decision on certain important problems related to the comprehensive deepening of reform” clearly emphasized the need to “strengthen the management of social organizations and overseas NGOs and lead them to abide by the law while carrying out activities”.

In 2014, the Fourth Plenum focused on the rule of law, further motivating China to enter a period of robust law writing. In the realm of social organizations, the charity law was passed after 10 years of hesitation, and a schedule was proposed for the passing of a law on overseas NGOs. In June 2014, Chinese and foreign media reported on the National Security Commission’s deployment of a fact-finding survey on overseas NGOs. In May 2015, feedback from the public was solicited regarding the second review of the draft of the Overseas NGOs Management Law. On April 28th 2016, the proposed “Overseas NGOs Activities Management Law” was finally passed after going through the NPC Standing Committee, and it was implemented on the first of January of this year.

The background to the formulation of the “Overseas NGO Law” on the one hand shows us that China’s level of consideration towards national security cannot be compromised. Feedback from the public was sought for the second review of the law’s second draft and for the second review of the draft of the “National Security Act” at around the same time. As the “Overseas NGO Law” was announced during the National People’s Congress’s press conference, the National Standing Committee’s Deputy Director of Law, Zhang Yongdan, stated that “certainly there is a very small number of overseas NGOs who have attempted or have even already done things that threaten the stability of Chinese society or security”.

The head of the Ministry of Public Security’s administrative office for NGOs, Hao Yunhong, pointed out that having a welcoming attitude towards overseas NGOs has a positive effect, but we have to strengthen the management of “a very small number of overseas NGOs” engaging in “illegal activities that damage China’s national security and interests”. In the realm of national security it is not only China that has increased its management of overseas NGOs, for Vietnam, India, Russia, Egypt and other countries have successively strengthened their management and laws surrounding overseas funds and organizations.

Looking at it from another point of view, strengthening national security does not necessitate increased legislation. From the “Three No’s” Policy to clear legislation, the reality is that the 18th CPC National Congress brought about an embodiment of modern national administration and the construction of the rule of law. One could think that the formulation of the Overseas NGO Law is the result of combining worries about national security and the rule of law concepts of national governance. The challenges and opportunities this law presents also come from this source.


The first month of implementation

During the last two months of 2016, the Overseas NGO Law went through preparatory work conducted by the Public Security Bureau and other governmental departments, and information about the law started to be released to the society. On the 8th and 30th of November the Public Security Bureaus in Shanghai and Guangzhou separately convened briefings with some foreign consulates and NGOs, and on the 28th of November, the Public Security Bureau published the “Guidebook on the Registration of Overseas NGOs’ Representative Offices and Filing for Temporary Activities”. On December 20th the “List of Fields of Activity, Categories of Projects and Professional Supervisory Units for Overseas NGOs Carrying Out Activities in Mainland China” was published. Before the Overseas NGO Law officially went into effect on the first of January, preparatory work was carried out in three different fields.

First of all, the law established that directories of overseas NGOs’ fields of activity and projects and directories of supervisory units were to be made public on multiple levels nationally, for the benefit of all NGOs undergoing the preparations for the transition, applying to establish representative offices and beginning temporary activity filing procedures. Secondly, with the Public Security Bureau taking the lead and supervisory units participating, the coordination mechanism for the supervision and management of overseas NGO was established. Thirdly, Public Security Bureaus across China were to simultaneously establish a “Service Platform for Overseas NGOs Affairs” website, publish their service address and telephone number, and open their case handling windows.

On January 17, Shanghai’s Public Security Bureau’s Overseas NGO Management Office held the “Shanghai Overseas NGOs Representative Office Registration Credentials Awards Ceremony” at which the first group of six NGOs obtained their registration credentials, including: Project Hope (US), the YSL Foundation (Hong Kong), the US-China Business Council, the Canada-China Business Council, the Federal Chamber of Commerce and Industry (Russia) and the Confederation of Indian Industry.

On January 19, Guangdong Province’s first batch of six overseas NGOs also obtained their registration credentials, three of which came from Guangzhou’s Representative Office, including the Chinese Chamber of Commerce (Hong Kong), the China Manufacturers’ Association (Hong Kong), and the Trade Centre (Taiwan). Also included were the Hong Kong Industry Association from Shenzhen’s Representative Office and another NGO from Zhuhai.

On January 23, Beijing approved registration for twenty overseas NGO representative offices, all of which had already registered as representative offices of overseas foundations with the Ministry of Civil Affairs following the 2004 “Rules on the Management of Foundations. Out of the twenty-nine NGOs that originally registered, at present the Hong Kong YSL Foundation has set up representative offices in Shanghai, Project Hope has set up representative offices in Shanghai and Beijing, and nineteen other NGOs have set up representative offices in Beijing. The remaining eight NGOs still have not transferred (registration to Public Security Bureau). The Ministry of Civil Affairs acts as a supervisory unit for these organizations. At a briefing before the new year, the Public Security Bureau announced in conjunction with the Ministry of Civil Affairs and the State Administration for Industry and Commerce that they had already prepared for overseas NGOs to register and transfer. The registration of these organizations can be seen as the first batch of transfers.

During the first month of the implementation of the “Overseas NGOs Law”, Shanghai, Guangdong and Beijing saw the registration of the first batch of 31 overseas NGOs’ representative offices. Most of these were part of the original twenty-one overseas NGOs designated in the “Rules on the Management of Foundations”, while the remaining ten were economics-related industry and commerce associations. The organizations came from countries including the United States, the United Kingdom, Germany, France, Switzerland, Canada, Russia and India as well as the regions of Hong Kong and Taiwan; while their areas of activity included the economy, sanitation and health, poverty alleviation, assistance, education, children and the environment.

There are three things we can see from the registration of this first batch of representative offices. The first one is continuity: the first batch of NGOs to register had previously been registered with the Ministry of Civil Affairs or the Administration of Industry and Commerce. When there was a change in the law, the government system just took account of the existing facts, especially regarding the organizations already registered with the Administration for Industry and Commerce which were not non-profit organization recognized by the law. It was a pragmatic way of dealing with the realities of the legal environment.

The second is that there is a higher degree of openness in the economic field.  Besides those representative offices of overseas foundations that relied on the transfer of their status under the previous law, the organizations that received legal status are all active in the economic field, showing the preference given to this field, and also that each province finds it easier to make the decision for themselves in this field.

The third is that implementing a law is also a process of fine-tuning its articles, charity being a good example. The third clause of the “Overseas NGO Law” requires that activities launched by overseas NGOs should be beneficial to the public welfare. The tenth article’s criteria require that the scope of services and the aim of NGOs be beneficial to the development of the public welfare sector. Generally speaking, industry, commerce and economic-type associations do not fall under the category of classic public welfare-type organizations. However, they took the lead in registering because of several factors related to the law’s fine-tuning and adjustment.

Going back to how each province’s Public Security Bureau worked on managing the registration of foreign NGOs, merely with regards to the setting up of the service platform websites, by the end of January the thirty-one provinces, municipalities and autonomous regions (plus Xinjiang) listed in the Public Security Bureau’s “Overseas NGOs handling service website” had established thirty-two handling services halls, and started an overseas NGOs management office or a service platform website. 15 lists of provincial-level supervisory units were also published. Regarding the information on supervisory units, Shanghai and Beijing published the phone numbers and addresses of each district’s tax bureau in the directory. Guangdong, Sichuan and Hebei separately published their own handbooks, with Sichuan publishing the first edition of its handbook on the operations of registration and filing. Out of the remaining ten provinces, which include Tianjin, Fujian, Hubei, Hunan, Jiangxi, Guangxi, Shaanxi, Gansu, Hainan and Anhui, all except for Anhui have a link to their own service platform website.

There are three provinces, Jilin, Zhejiang and the Tibetan Autonomous Region, that have established a specific purpose website or webpage and also set up a link to their service platform website, but haven’t yet released the list of their supervisory units. Aside from this, there are fourteen provinces whose service platforms websites still aren’t up and running. Out of these, the links for Shanxi, Liaoning, Heilongjiang, Jiangsu, Henan, Ningxia and Xinjiang direct to the local PSB site, while the links for Inner Mongolia, Shandong, Chongqing, Guizhou, Yunnan, Qinghai, and Xinjiang simply state “temporarily not in service.”

Regarding online handling services, the management of the registration of overseas NGOs also presents another characteristic, which is a high level of uniformity. Even though each province has set up its own independent website and information platform, the service window links actually all take you to the Public Security Bureau’s overseas NGOs online affairs platform. The whole country has the same platform, the same account system, and the same online forms, and when making appointments to go over documents one can choose any province’s handling service hall from the drop-down menu.


An opportunity and a challenge

A month has already gone by since the law was implemented, and compared to when it was announced, there has been a gradual clarification of the ambiguity of some related information. First of all, the Public Security Department’s attitude towards the law and the high importance that the government obviously attached to it must be remarked upon. The Overseas NGOs’ Management Offices service window was installed in the Entry-Exit Administration Bureau, while the online form and appointment task-bar were made part of the Public Security Bureau’s integrated system. The log-in screen says “Welcome to China”. In contrast to the Chinese social organizations’ supervisory units operating under the “dual management” system, many supervisory units of overseas NGOs have already designated a specialist and set up a specific office that combines office functions.

Second, the scope of activities is not limited to the place of registration. China’s own social organizations usually adopt grade-ranked registration and management principals, and decide the area in which their activities take place on the basis of the grade at which they register. The registration of overseas NGOs’ representative offices takes place exclusively in provincial institutions. The Public Security Bureau only makes an overall coordination plan, but does not carry out the actual registration. This way the national ministries act as supervisory units while registration is at the provincial level. Currently the area of activity of registered representative offices is tied to the supervisory unit’s scope of activities, and they can register in one province but have activities in multiple provinces, even nation-wide. The public security system coordinates internally to manage inter-provincial activities. The law prohibits the establishment of branch offices, meaning that registering in one place and carrying out activities in multiple places is allowed, but they must be within the scope of the supervisory unit’s work, and they cannot be carried out by branch offices.

The third point concerns the feasibility and difficulty of preparing the relevant material. Out of the organizations that are preparing to register, there are some that are preparing the material in accordance with the handbook, but have realized when communicating with the authorities that there is a real gap between the understanding of the organization and that of the authorities, particularly regarding the information that has to be filled in. Sometimes they even have to start the process again. What is most time and energy-consuming is that many materials require local notarization, authentication and approval by the Chinese consular mission. This process is often in contrast to what is required in other nations, particularly in the United States, where Chinese diplomatic missions will only authenticate federal documents, with the United States’ Federal Government only accepting documents from state-level offices. The state notarizes the individual’s signature, thus for individuals getting document authentification at Chinese consular missions, it is necessary to first go to the Federal Government, and then go back to the individual authentification.

As far as current experiences with registering go, the largest challenge is still focusing on the supervisory unit. The first step is whether or not they are able to make contact: even though the list has been published, it is still difficult to track down the actual responsible department and contact them. The second step is whether or not the supervisory unit replies: if there is no contact made with the NGO, since there is no deadline for registration, the whole process can be put off indefinitely. The third step is the supervisory unit’s criteria for judging and auditing the field of activity: because it is not a matter of meeting legal requirements, there is a great deal of discretionary power.

The fourth issue is the one of coordination between different supervisory units, with the units responding case-by-case regarding the field of activity, division of labor and categorization according to administrative standards. For a large number of overseas NGOs, it is hard to completely place responsibility on any certain department, and in this way a certain shift of responsibilities occurs between supervisory units. On the other hand, even if a certain department acknowledges part of the responsibility, because of the way the government is structured, they have no authority or desire to coordinate with other government offices, and therefore a difficult position can arise regarding the supervisory unit and the fields of activity. Aside from this, overseas NGOs with smaller scale activities in counties or communities, overseas NGOs that have not legally registered, overseas NGOs that have no history of contact with as supervisory unit, and those that are completely new to the process have been meeting large obstacles.

Another central issue is choosing the field of activity. Especially in the case of financial aid foundations, the project and activity field are decided on the basis of the authorization received for the project, but it is hard for the organization to decide them in advance. Some activities are one-time research projects, so their range is flexible, changing in response to demand. For these there is no way to know the full scope of activities beforehand. If every time they have to change the venue they also need approval from the supervisory unit or cooperation from the Chinese partner unit, this would make seemingly simply activities extremely complicated.

Mentioned even less often are the cases of temporary activities. At first organizations imagined that if they were unable to obtain registration for a representative office, or were not required to register, they could first legitimize themselves by obtaining a temporary activity permit. However, up to now, there are still no actual cases of temporary activities being registered. The responsibility of obtaining approval for temporary activities rests not with the overseas NGOs, but rather with the Chinese cooperation units, namely the government, institutions, people’s organizations and registered social organizations. But when it comes to who to ask assistance from, how to apply and how to obtain approval, the law has made no clarification. The holes in the law have resulted in a greater uncertainty over the approval of temporary activities, and this another important aspect that is worth reflecting upon in the future.


The next things to watch out for

Regarding the first batch of overseas NGOs that obtained their registration credentials, what is really crucial is how the law will govern both NGO’s activities and governments’ supervision after the registration. Transferring registrations is a special case, which is insufficient to determine the smoothness of the legal process. In the coming months there will be two crucial outcomes worth watching for, the first being: which organizations in which regions will be able to obtain their registration credentials on their own and which will be able to obtain legitimacy through the approval of temporary activities.

In particular it is worth keeping an eye out for certain overseas NGOs that have a long history in China, whether through agreements with the government, local government platforms, Chinese cooperation partners, registration with the Ministry of Trade and Commerce, volunteering or other methods. Especially concerning the NGOs that entered China right after the “Reform and Opening-up” and accompanied the country through this process, the question of whether their names will continue to exist and whether they will remain in China not only impacts the public welfare sector, but is also a significant symbol of China’s openness and of its relationship with the international community.

Secondly, it is worth watching which organizations under which circumstances will have to comply with this law. According to the workflow regulations outlined in the “Overseas NGO Law”, for overseas NGOs there is a 90-day time limit from when they obtain documents of consent from their supervisory units to when they receive approval for registration from the administrative authorities. At the very least we can view the first three months of the law’s implementation as preparation time for registration.

Organizations with a strict legal awareness have temporarily halted all activities, but there are still all sorts of wide-ranging exchanges, visits, ongoing projects, visas for employees, and even member activities and online fundraising; the issue of whether these activities are legal or not cannot be escaped. The law has not yet defined the difference between “activities” and “temporary activities” and there are also still holes in the explanation of who exactly is the object of regulation. After the law’s implementation, on the one hand overseas NGOs have been confronted with a temporary choice: either register officially or cease any contact with China and their Chinese members, or otherwise assess the legal risks. On the other hand, Chinese law enforcement is also in a process of interpreting the laws, continually putting forward clarifications of legal definitions and parameters.


Rule of Law: a connection between China and the world.

“The Overseas NGOs Law” has been implemented for a month, and the first batch of NGOs has already registered, a manifestation of the government’s attitude. Once the law has been implemented for three months it will enter a period of examination of the legal process. On certain levels, towards the middle or end of this year the effects of the law will be more visible in society. This is also a point of pressure and a challenge for the current process of implementation of the law.

The operations of non-governmental organizations are diversified, flexible, cross-boundary, and able to quickly adjust based on society’s reactions. There is an inherent tension between this way of operating and the characteristics of the administrative divisions of the Overseas NGO Law. This is perhaps due to the increased discrepancy in legal concepts. Most overseas NGOs have a clear-cut legal awareness, and the policies set forth by the board of directors have to pass through the strict examination of their legal departments. How the Overseas NGO Law can be subsumed into the general trajectory towards the rule of law will be crucial for its enforcement.

For example, legal responsibilities and requirements have to be enforced in areas like how to clarify the definition of “activities”, the legal requirements of the supervisory units, whether to establish a comprehensive supervisory unit for activities spanning various different fields, the examination and approval procedures and standards for the Chinese cooperation partners needed for temporary activities and the regulations for member organizations. The enforcement must take place under principles of clarity, consistency, and feasibility, so as to avoid situations where a project is left in a limbo, neither approved nor rejected.

The rule of law will be the crux for the implementation of the Overseas NGO Law. This will not only determine the effects of the implementation of the law, but also represent a milestone in the creation of a Chinese rule of law that is integrated with the international community.


In Brief

In this piece Tsinghua University professor Jia Xijin takes a look at how the first month of implementation of China’s Overseas NGO Law unfolded.
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