Research explores regulatory reform of foreign NGO management in China

  • Home
  • >
  • Analysis
  • >
  • Research explores regulatory reform of foreign NGO management in China

Since the reform and opening up, overseas NGOs started to enter China. Over the past decades, they’ve done a lot of work in areas including health care, poverty alleviation and disaster relief, education, and environmental protection through humanitarian aid and financial support, contributing to stronger exchanges between China and foreign countries and promoting the country’s economic and social development.

The promulgation of the Law on the Management of the Activities of Overseas NGOs in China in 2017 solved the problem of the legitimacy of overseas NGOs and provided legal support for the management of overseas NGOs in China, but the supervision of these organizations is still challenging.

For this reason, based on the framework of regulatory theory, a new research from the Institute for Philanthropy Tsinghua University (IPTU) analyzes the regulatory dilemma of China’s regulations concerning overseas NGOs, explains the core concept of regulatory governance, builds an analytical framework for regulatory governance of overseas NGOs, and proposes possible paths for the regulatory governance of overseas NGOs.

The basic elements of regulation are regulatory policies, institutions and tools. Based on that, the authors pointed out four problems of the current regulation of foreign NGOs in China: the uncertainties of policies, lack of responsibility and limited accountability of regulatory institutions, low applicability of regulatory tools, and incomplete transparency of the regulatory process.

Regulatory reform

Affected by the global regulatory revolution, since the 1990s, regulatory reform has become an important part of the contemporary economic system and government management reform in China.

Different from the reform process of Western countries, China’s regulatory reform is a transition from strong economic regulation to loose regulation and re-regulation, from weak social regulation to strong social regulation based on a sound legal foundation.

In addition, the country’s regulatory reform coincides with the global rise of the concept of regulatory governance. Many new regulatory concepts and regulatory tools advocated by regulatory governance have been used in the practice of regulatory reform and achieved good results, reshaping China’s economic governance model.

However, the traditional concept of regulation has continued in the field of social governance, and contradictions and conflicts still exist.

Optimization under the framework of regulatory governance

While the intervention and control of public affairs cannot be relaxed, more flexibility and more diverse approaches can be applied when it comes to affairs such as the management of foreign NGOs in China.

The research proposes an analytical framework for the regulation and governance of overseas NGOs in China.

Firstly, the consistency, openness and diversity of regulatory policies should be improved. In terms of consistency, the policy differences in different regions and departments should not differ much, especially concerning principal rules. Openness requires regulatory policymakers to consider the differences in global regulatory governance policies and try to align domestic and international standards so that policies can have a higher acceptance rate internationally.

In terms of diversity, regulatory policies have expanded from laws and policies to those in a broader sense, such as industry conventions. Similarly, for the regulation of overseas NGOs, the article proposes to establish sector conventions.

The second advice is to explore a cooperative regulatory governance framework. In the traditional regulatory model, the government is the only regulatory agency, while the regulatory governance theory holds that a wide range of stakeholders can become the subject of regulation. Through public-private cooperation, decentralization and granting of power, a regulatory framework of mutual openness and cooperation can be established among the government, market and society.

Thirdly, there should be a toolbox for regulatory governance with both command-and-control and incentivizing tools. The former is led by law enforcement departments and consists of administrative and criminal punishment for illegal activities. The latter consist of incorporating foreign NGOs into government-led work and granting tax reduction and awards to foreign NGOs with good credibility.

Lastly, the article proposes to build an information-sharing platform on overseas NGOs in China to help the public understand these organizations better and help government departments cooperate better in managing these NGOs.