The Chinese party-state has a big problem on its plate. The STATE is dependent on NGOs in public administration. For example, almost all delivery of social services is now outsourced to organisations that are not directly a part of the state apparatus. But the PARTY is determined, as always, to be in control and sees NGOs as potential threats, rightly so from its perspective.

A contributing effort to squaring this circle is a draft law on the regulation of foreign NGOs which is now working its way through to becoming law. That may happen at next year’s People’s Congress, or earlier if the Standing Committee of the PC passes it, as could happen in December. A second draft was released in May for public comment. That elicited unexpectedly strong objections to some elements of the draft from both within China and abroad, including from business communities and from universities and research organisations. Observers are now eager to see what effect, if any, these objections will have in the final wording of the law.

The law will regulate what foreign organisations will be able to operate in China and what they can do. It is expected that the law will block foreign organisations from any operation in China unless they have a permanent presence in the form of an office there. For that purpose, it will need to register and get a permit. One issue of controversy is who will be in charge of registration. In the draft, this will come under the Ministry of Public Security and hence the police. That has been objected to and it seems the NGO community mostly wants the authority under the Ministry of Civil Affairs.

This is in part a matter of internal bureaucratic wrangling. The control faction no doubt favours the Ministry of Public Security over the ‘wets’ in Civil Affairs. And the Ministry of Public Security is no doubt in favour of itself in order to expand its turf and budget.

Another question is what organisations will be effected by the law. The reason business interests got involved is that they saw another potential layer of bureaucracy that businesses would have to deal with. The reason universities and research organisations got involved, is that they saw potential impediments to Chinese-overseas collaboration in teaching and research.

Yet another question is how stringent the rules of operation and the registration and reporting requirements will be, including the ability of Chinese organisation to receive foreign funding and of non-Chinese organisations to support Chinese groups financially. Chinese authorities became increasingly concerned over this after the riots and city occupations in Hong Kong last year, which they persuaded themselves were the work of, or stimulated by, foreign interests and agents.

Related is the question of Party presence in non-governmental organisations. Increasing reliance on NGOs for, say, the delivery of social services, represents a certain retreat of the state. The same can be said of the increasing space for private business following economic opening up. But what may be less noticed is that if the state has retreated in some areas, the Party has been extending its reach. The Party now has a presence of some kind in most businesses of any size, including foreign businesses, and is determined to also have a presence in non-business organisation.

The degree and kind of regulation of foreign NGOs is further complicated by the simultaneous preparation of a Charity Law, which has been in the works for years. This law will regulate the operations of charitable and philanthropic organisations, including foreign ones. It is possible, even likely, that the provisions of these two laws will contradict each other. For example, charity organisation registration may be the remit of Civil Affairs and NGO registration the remit of Public Security, while one and the same organisation may be both and NGO and a charity.


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