NPO rules expected in 2014

The long-awaited rules for foreign nonprofit organizations that want to register on the Chinese mainland are expected to be released next year, a senior official from the Ministry of Civil Affairs said.

A dual administrative system will be enforced for foreign NPOs, although China has simplified the registration process for a limited number of domestic social organizations.

"The government will carry out registration work for the representative offices of overseas non-governmental organizations and provide guidance to them on how to operate legally," said Li Liguo, minister of civil affairs, in a keynote speech on the ministry's work plan in 2014 at a meeting in Beijing over the weekend.

Yu Yonglong, who is in charge of foreign-NPO administration at the ministry, told China Daily that the State Council, China's Cabinet, is reviewing three amended regulations on NPOs.

There are three management regulations for China's three types of NPOs — foundations, non-enterprise work units and social associations. While regulations on foundations briefly stipulate that expatriates can establish foundations in China, and foreign foundations can set up representative offices on the Chinese mainland, they do not stipulate the criteria for foreign applicants.

Yu said the amendment on social associations is expected to be released first, followed by the revised regulations on foundations and non-enterprise work units.

Twenty-six overseas foundations have registered their representative offices with the ministry. The ministry's annual check showed that these foundations spent more than 1 billion yuan ($165 million) on about 470 philanthropic programs in fields like technology, education and culture in 2012.

"Practices proved that registration can protect bilateral communication and cooperation. It is also a significant way to strengthen supervisions on foreign NPOs' activities in China," Yu said. "Registration is a vital part of law-based administration."

He said that the dual administration system will apply to the overseas NPOs' branches and offices in China as required by the State Council in its plan for the transformation of government functions.

In other words, foreign NPOs will have to be affiliated with a governmental agency or public institution before they can register with civil affairs authorities, he said.

The Ministry of Civil Affairs will be responsible for registration, financial auditing, annual checks and information disclosure related to foreign NPOs, while the NPOs' supervisory agency will oversee their daily operations.

Wang Ming, president of the Nongovernmental Organization Research Institute at Tsinghua University, urged the government to speed up its efforts to stipulate the dos and don'ts for international NPOs and foreigners who plan to establish NPOs in China.

He said the vast majority of foreign NPOs either registered as for-profit organizations or stay unregistered.

"There are tax issues for those registered with the commercial authorities as companies, while those that are unregistered face legal risks," he said.

Huang Haoming, vice-chairman of the China Association for NGO Cooperation, welcomed the government's moves, given that more NPOs are entering China thanks to the country's opening-up.

Given that China has gone through dramatic changes socially and economically in the last three decades, the focuses of overseas NPOs on China has changed, he said.

"In the past, China was simply a recipient of aid, but now overseas NPOs increasingly look for a new model of cooperation with China," he said.

"Overseas NPOs may continue their involvement in traditional fields such as rural development, poverty alleviation and environmental protection, while more will be interested in labor rights, human rights and other areas," he said.

Overseas NPOs will also want to assume more of an advocacy role to influence the decision-makers for social movements instead of providing direct assistance to the needy, he added.

More than 511,000 registered civil society organizations were in China by the end of the third quarter of 2013, the ministry said.

Direct registration for the limited scope of NPOs has been piloted in 26 provinces and five municipalities, which enabled more than 19,000 NPOs register directly with the civil affairs departments, abandoning pre-examination and approval by other regulators.