On July 28, China Development Brief convened the “Foreign NGOs in China Registration Workshop” in Beijing. During the workshop various talks were given by experts and professionals in this field. At the end of every talk the audience got to ask questions, leading to some interesting exchanges on the challenges facing China’s international NGOs. What follows is our translation of the record of the Q&A session with some of the different speakers, including Jia Xijin (Tsinghua University), Zhang Lingxiao (Jingshi Law Firm), Wang Chao (Save the Children) and with the participants of the final panel discussion, which included Jia Xijin, Zhang Hongman (Plan International), Liu Zhongliang (CDB), Katherine Wilhelm (Ford Foundation), Hu Wenxin (TNC) and Lu Lunyan (WWF). A few of the questions have been edited or cut out for the sake of clarity and brevity.
Jia Xijin (Tsinghua University)
First Audience Member: Hello Professor Jia, many of our organization’s clients are foreign NGOs. When they are implementing their projects, they bump into a problem. A lot of NGOs cooperate with Chinese enterprises. As long as they haven’t established a representative organization, is it true that they won’t be able to bring forward any of their activities, given that according to my understanding many of the activities are commercial and not charitable in nature?
Jia Xijin: What you said relates to how the law defines an object of legal regulation. In the case of this question, the legal definition has nothing to do with the Chinese side [of these cooperative relationships]. As long as it’s a foreign NGO in question, it doesn’t matter what kind of Chinese organization they partner with, even partnering with the Chinese government would be no exception. So partnering with an enterprise or an NGO would be the same, it would depend on their matrix, they would have to respect this law, and there wouldn’t be a distinction.
Second Audience Member: I’d like to ask, you just brought up the possibility of supplementing the name list of professional supervisory units (PSUs). I’ve recently been paying close attention to the timetable, and as everyone knows, no matter how you look at them the medical and education departments are probably our country’s two most conservative areas. So if these name lists are supplemented, other than our country’s National Health and Family Planning Commission or the local Health and Family Planning Commission, if these lists are supplemented with other organizations, I think this might really give people some hope and add to overall efficiency.
My second question is, there are some organizations that have met a few of the situations you just described, and I wonder if this sort of situation might be a bit more transparent if every PSU published a list of the organizations they were responsible for. Might this make things a bit more transparent?
Jia Xijin: Regarding your first question, in fact you can take a look at it again, you can go and look for possible PSUs: if they are not currently on the list, it doesn’t matter; if they do have that intention [to be put on the list], you can go back and get in touch with the PSB and tell the Bureau that they intend to, and ask whether or not it’s possible to have them added. So long as they have the proper qualifications, I think that the Public Security Bureau would be quite willing to further open up the list and supplement it. So I think you can go back and try this, I think doing it this way is relatively easy.
Regarding the second question, this is something that has been done quite well on the PSB’s website. All the data I have comes from looking at their website. You can check out the names of every single registered [organization] there. You can search for the four organizations registered with the National Health and Family Planning Committee, you can see where they are registered, who their representative is, their professional scope, sponsoring PSU, the website has it all. Just log on to the Public Security Bureau’s service platform and it’ll be fine.
Third Audience Member: I have a small question. You just brought up the issue of filing temporary activities, and how some organizations will file an activity just in order to invite a single person (to China), so do these cases actually exist? And if they do, do the necessary funds and management expenses come from the unit that they are cooperating with?
Jia Xijin: Yes, the process of filing an activity is always the same, which is to say that this organization delimits under what conditions it needs to file, it’s not the Public Security Bureau that demands that they do this, it’s only they themselves that think they need to invite someone and file an activity. Now of course the Public Security Bureau will accept these filings, but is it actually required to file or not? Regarding whether or not all organizations have to file a temporary activity when inviting someone, at present the Public Security Bureau hasn’t put forward a clear explanation, or one can say that the law doesn’t provide this kind of explanation. Every scope of control is different, and to this organization, if they think that these things need to be put on file then they should put them on file. There’s certainly that kind of situation.
Fourth Audience Member: Professor Jia, hello, I’m from Compassion in World Farming. The activities our organization has launched domestically and internationally aren’t alike. I’d like to ask, if we wish to register our organization in China, will the scope of our international activities impact our domestic activities?
Jia Xijin: According to the law it won’t, but from the perspective of the approving unit, these factors may have some influence. If they take issue [with your international activities], it may influence [your domestic activities]. But according to the law, there aren’t these kinds of requirements. So as long as you act according to the law, you should be fine. It [the law] doesn’t specify that your international activities need be identical to your domestic activities or what activities you can’t conduct internationally.
Fifth Audience Member: Professor Jia, hello. I’m from Renmin University. I remember that the “Law on the Administration of Activities of Overseas Nongovernmental Organizations” clearly states that foreign organizations in China cannot solicit donations. But I just saw that you wrote that they can [accept] “passive donations”. So I’m not sure, do you mean that other than the interest that they get on their income, they also have other [forms of] endowment income? I don’t know what “passive donations” means.
Jia Xijin: The law doesn’t forbid them [foreign NGOs] from accepting donations. Furthermore, this law on foreign [NGOs] clearly states that in China, other legal income, that is legal income that does or does not include, for example, whether I can collect fees when I’m providing services, or if it includes the money that other people give to me, whether or not I ask for it, none of this is forbidden under the law.
Sixth Audience Member: But they can’t openly solicit donations, is this the case?
Jia Xijin: Soliciting donations isn’t allowed, this is covered by the Charity Law, furthermore it has never been allowed. But the law doesn’t forbid them [foreign NGOs] from passively accepting [donations], and what’s more according to this law, it’s absolutely clear that they can have an income in China, that is [they can have] other legal incomes in China, this is clearly written in the law.
Seventh Audience Member: Professor Jia, hello, I’m from Shanghai Jiaotong University. During our initial research we’ve discovered that these international NGOs, no matter whether they’ve just registered, or if they were previously registered with the Bureau for Industry and Commerce or the Ministry of Civil Affairs, as long as they’ve been able to successfully register, they’ve all been carrying out activities in China over a long period of time, including those that began working in the ’80s and ’90s. So I’d like to know, was your research able to determine the possibility of registering a representative office in China based on the length of time their activities have been carried out in China as well as their previous experience of working with Chinese partners?
Jia Xijin: This is a very important dimension; according to the information on the registration website this isn’t possible. However I was able to ask about this through a survey, and I also hope to understand whether or not the previous experience [of NGOs in China] exerts any influence. Speaking from my own personal judgment, it’s obviously very important. So I’d also hope to find out, especially if in the past the organization had absolutely no experience, if they would be able to register. I also hope to understand this issue, but this is only possible through our own investigation and research.
Zhang Lingxiao (Jingshi Law Firm)
First Audience Member: Regarding the examples of different levels of illegality that you gave, let’s take the launching of an awareness campaign about protecting small animals. This isn’t an open activity, but rather a promotional campaign conducted on social media. Would this be considered illegal?
Zhang Lingxiao: After this law was put into place, there are only two kinds of activities that foreign NGOs operating in China can launch: the first is establishing a representative office, the second is filing a temporary activity. Other than this, you can’t get involved in activities or entrust or authorize natural persons or organizations in China to involve themselves in activities. The example you just mentioned would not have these qualifications, if they authorize a Chinese [group] to put this into practice, this wouldn’t be acceptable.
Second Audience Member: But didn’t you say before that social media activities don’t belong to this sort of activities, so their files don’t need to be put on record?
Zhang Lingxiao: This was in regards to our understanding of activities, a large scale organization putting together a meeting of three hundred plus scholars, that counts as an activity. Small scale activities on Weibo or WeChat, these kind of temporary activities, these wouldn’t count as activities. When explaining how “activities” are defined in the law, it’s as we just said, which is to say if a foreign NGO in China doesn’t have a representative office, and has also not set up a record of their temporary activities, so they have no connection with China, if during this time they provide financial aid, no matter what sort of financial aid this is, under the law these activities should be restricted. Why? If this loophole is opened, and if they aren’t registered in China, China won’t be able to control these groups, and those temporary activities which haven’t been put on record, those activities won’t be managed either. This could lead to the emergence of some situations that might harm national security. Even though in the course of this your funding is just helping some small animals, and you see this sort of activity as fine, couldn’t your funding go towards the establishment of a representative office? If you don’t set up a representative office, can’t you cooperate with your Chinese partners to file your temporary activities? Since this legal path is already open to you, it’s not necessary for you to come directly to China without permission and implement these activities.
Third Audience Member: My question concerns fundraising. Presently in China, most foreign NGOs face fundraising pressures. The reasons are easy to see: following China’s growing wealth and power, the headquarters of foreign NGOs in the United States and Europe all say that Chinese people have money, so their Chinese teams should assume financial responsibility for themselves in China, they should raise their own funds for their China-based projects and no longer rely on government subsidies. But the “Law on the Administration of Activities of Overseas Nongovernmental Organizations” stipulates that fundraising and soliciting donations is restricted. Now everyone is thinking about whether or not they can be trail blazers in this area. For instance, a recent example is the World Wildlife Federation which registered a local foundation in Shenzhen called the “One World Wildlife Foundation” and has been conducting fundraising-related activities. From a legal perspective, how would you view this approach?
Zhang Lingxiao: The law stipulates that there are three possible sources of funds for representative offices of foreign NGOs: funds invested in them from their home countries, interest that they have accumulated in China, and the legal income that they have acquired in China. So you can say, a foreign NGO says [to their Chinese office] “I’ll give you one million RMB, and after that you’ll be responsible for your own profits and losses, you work on your own things”. But no, it’s still a representative office and it doesn’t possess the legal standing of an independent legal entity. You can arrange things that way internally, but in China, number one, you can’t develop a membership, and number two, you can’t solicit donations and you can’t covertly link up with other foundations to conduct fundraising. The law forbids this.
But when I was discussing the material for this presentation and brought up this point with the Public Security Bureau, and I asked if an organization can passively accept donations even though they can’t actively go out and collect them, this is an open question. So if we’re talking about whether the assembled foreign NGOs here could try to make a breakthrough on this issue, I can’t discuss this in depth. They may say if there’s a big boss, or an entrepreneur who donates ten million RMB to them, then that person is willingly giving to them. Since this is in keeping with Chinese law, and it’s in keeping with the [right of] natural persons and legal entities to freely dispose of their own property, in this instance and according to our lawyers, in any circumstance where you want to achieve your objective, there’s not only one path, sometimes you can change your position, so let’s leave it at that.
Fourth Audience Member: You said that one could accept a donation in a fixed amount. Now for example let’s take the Gates Foundation, now Gates perhaps has other businesses, the profits that his company makes in China, if he’s willing to donate [these profits] to the China offices of the Gates Foundation, would this donation be a fixed amount donation?
Zhang Lingxiao: First of all, as long as the donation is made by a legal entity, [as long as it’s] legal property, people have the right to dispose of their own property, you can accept this as long as they are willing to give it, we’ve already answered this clearly. You can’t actively go out and say, “give me money, give me money, I want to do such and such”. If a particular person is willing to give you money, the law doesn’t say you can’t take it, and it doesn’t say that you can’t donate to others.
Hu Wenxin: But this brings up a whole set of tax-related issues.
Zhang Lingxiao: Regarding donations, you can go and do a normal civil donation, or you can go and donate to a charity, given that after the “Charity Law” was put into force, under this law donations receive preferential tax status. However, these donations have to be made to charitable organizations. Now if I give to you, on a basic level, as a recipient of these donations in China, the income you receive would be taxed, making this a normal civil donation. This would be covered under the “General Provisions of the Civil Law”, making this a normal civil donation. You [as an individual] can’t make a “charitable organization donation”, given that you aren’t a charitable organization.
Wang Chao (Save the Children)
Hu Wenxin: Hello Dr. Wang Chao, I’m Hu Wenxin from TNC [The Nature Conservancy]. Since Save the Children was among the first batch of registered organizations [in China], I’d like to ask the following: in the past half year, from what you’ve been able to sense from your own organization, after coming under the management of the Public Security Bureau, what do you think are the differences between the Public Security Bureau now and the Civil Affairs Bureau in the past in terms of their demands and management? Do they have any new demands?
Wang Chao: We haven’t felt any substantial differences. In the past the sponsoring managing department and the registering organization were both the Civil Affairs Bureau, whereas now they’ve been split. Actually, the registering organization doesn’t really get involved in our work, and only gets involved during the period of our registration, for example asking for some documents or bank account information, etc… When we make these sorts of changes, there’s a little bit of communication and exchange with them. On the other hand, through the whole process the Public Security Bureau often comes and asks us if the process is going smoothly, if things are working out effectively, they have a real service-oriented mentality.
First Audience Member: Thank you Dr. Wang Chao for your comments. I’m Zhu Yunyun, from the Beijing George Medical Research Company (北京乔治医学研究有限公司), I have a rather practical question: a moment ago Dr. Jia mentioned that in reality the law doesn’t restrict the ability of foreign NGOs to passively accept donations in China. I’m not sure if in the past half year Save the Children has or hasn’t considered this, or has had a similar idea, that is the possibility of passively accepting donations in China. If they have, have they in practice run into, for example, some problems related to invoices? If you passively accept donations, or if you go and provide services and you need the other side to provide an invoice, will the Tax Bureau support Save the Children issuing these invoices?
Wang Chao: This is a very technical question. At present we haven’t received those kinds of donations. Do we want to? Of course we want to. In reality this is a very important trend: at present the money possessed by international NGOs that have entered China is gradually declining, so adjusting our whole resource structure is an inevitable strategic choice. We naturally hope that an indigenous source will emerge. Passively accepting donations should be fine, but on the technical side, complying with the [proper legal] process is very important. At present I don’t think we’re adequately prepared, so we haven’t yet done it, but we also haven’t ruled out doing it in the future.
Second Audience Member: Hello Dr. Wang Chao. At present the number of domestic foundations is increasing, and furthermore a number of resource-rich and well-funded domestic foundations have begun to emerge. Has Save the Children begun cooperating with domestic foundations that are also focused on the area of children’s aid? What do you think are the differences between domestic and foreign sources of financial aid, and how would you as Save the Children determine what kind of foundations you would partner with? Thank you.
Wang Chao: Correct, there are definitely more and more indigenous foundations that are beginning to emerge. We’ve had a few connections with them, especially in some areas of common concern. But there hasn’t been much specific or substantive cooperation. Basically most of the time we are relatively passive, waiting for others to come and find us. Regarding foreign NGOs, “integrating into China” is a very important part, we should actively and on our own initiative seek out partners for cooperation who share common issues of concern. Most of our cooperation partners are government [bureaus] or grassroots organizations, very few are financial sponsors or foundations. I think this is an important area in need of improvement.
Third Audience Member: I have a practical question. Does Save the Children only have a registered representative office in Beijing? But you also have an office in Yunnan. What impact does this registered representative office [in Beijing] have on the operation of your Yunnan office or your other offices? Just a moment ago Prof. Jia spoke about how a number of representative offices can be collectively registered. Why haven’t you chosen this method? What are the pros and cons of these two registration methods?
Wang Chao: We’re only registered in Beijing, but the certificate specifying the scope of our activities stipulates that they cover the entirety of China. According to the law there are no such restrictions. There’s something else I’d like to express, we tend to incline towards registering our representative office in Beijing, with other areas – including Yunnan, Sichuan, Xinjiang, etc. – only having project offices. This is more like having one representative office with different project offices below them. It isn’t a single registered entity, but rather a single operating unit. This is our understanding of this model or how we hope to operate.
Fourth Audience Member: I have a similar question. When our international organization just entered China, we possessed a huge advantage in terms of resources and funds. But along with China’s unceasing development, a number of large foreign donors are now reducing the financial aid they provide to China. If this situation of declining funds continues, international organizations will look to cooperate with indigenized Chinese organizations and solicit donations, and furthermore will look for activities that are appropriate to local conditions. Or they may shift their attention to places that are more lacking in development.
Wang Chao: If you’ve ever worked in an international organization, you will have discovered that a national office always possesses its own strategy and considerations. Of course from a global perspective, their focus is on whether to set themselves up in China or in India, they don’t really do much prioritizing at this level. Regarding the national office, it of course hopes to be able to continue working in this country and continuing to put forth its value.
The issue you bring up of funds and resources no longer being a strength, I think this issue already began to appear ten years ago. At times it seems that international NGOs are providing continuous support, or are going out to find even more resources, but I think this is a problem. From the point of view of international organizations, especially those organizations that are quite large or have experience, other than their funds and resources, they certainly possess other values and strengths. During those times when their advantages in funding are evident, this may cover up other sources of influence that you could look into. To me, being short on funding or resources may, on the contrary, push an organization to consider other means of realizing their worth. I think any organization or national office should consider this strategy. Therefore, Save the Children can’t shift the focus of its work to India, our focal point remains in China, and we’ll use ever more resources and hopefully make greater contributions and have a greater influence, I’m certain of it.
Jia Xijin: I’d like to ask Ms. Zhang from Plan International, you’re already registered in Shaanxi and have already been given the right to conduct your activities across the entire country. Why are you still thinking about waiting for the Civil Affairs Bureau to act as a PSU, what’s the purpose of this?
Zhang Hongman: In reality, being registered in Shaanxi doesn’t mean being registered across the whole country, it only covers eight provinces. Actually, other than three fixed provinces, all the other provinces can be changed according to changes in our program activities. [Our projects] may move to a new province, or perhaps a program may end, and so we wouldn’t continue our work in that province. Because this possibly could change, it’s best to be registered at the national level.
First Audience Member: Hello, I’d like to ask Ms. Katherine Wilhelm a question, I’d like to ask you which bureau is the PSU for your [organization’s] work?
Katherine Wilhelm: The [Chinese People’s] Association for Friendship with Foreign Countries.
First Audience Member: I’m from the American Foundation, we’re also a financial aid organization, the same as the Ford Foundation, and we’re also waiting for organizations seeking funding to apply for projects. After they apply for our projects and we examine and approve them, this cycle is quite long. How can the Ford Foundation come up every year with their plans for the following year? Without having finished the internal examination and approval procedures, how do you know which projects or groups you will support?
Katherine Wilhelm: Exactly, we also often ask ourselves what to do. The thirty years we’ve been in China have all been focused on providing continuous financial support for projects, but in the future we can’t continue to do this.
First Audience Member: So your working methods will have to change.
Katherine Wilhelm: We’ll change, and furthermore we will help our partners understand this change. I think this is a huge challenge.
Second Audience Member: Hello, thank you to everyone here, I think this kind of talk is really fascinating. To the people on stage, I’ve found that all of you represent influential NGOs that have conducted activities for a long time. I’d like to ask, from the perspective of the PSU, what benefits do you provide for them? Why are they willing to act as your PSU?
Liu Zhongliang: I’ll answer this question. If I was a PSU, I would feel this was a responsibility, given that the work of NGOs supports local work. In reality, the supervisory unit is part of the government, and from the government’s perspective, developing their locality is their primary responsibility, and they think they have this responsibility. But why would they be willing to do this [become a PSU], or why would they be unwilling? The question probably involves the issue of responsibility between the two of them. In reality everyone wants to do things, but if there isn’t mutual understanding, they could think it’s risky. This is why it was said this morning that relationships are very important, we establish relationships as early as possible, both sides come to mutually understand each other, and if they think that your organization is actually doing real work, that there’s no risk, under these conditions they’d be willing [to partner with NGOs]. But if they completely don’t understand you, or if you do illegal things, the government will go and look for them first, so this is why they are willing to work as your PSU only after they fully understand you.
Zhang Hongman: I can speak a bit about my experience. The other side may be willing to act as your PSU, yet there exist different situations. For example, at the most local level, in some of Yunnan’s counties, if an organization says that it’s bringing funds with it, then they are welcomed. But if the PSU is at the ministerial level, your funding advantage disappears. Therefore everyone is always bringing one thing up, which is asking what is the added value that you’re bringing with you, and if you can explain clearly what your model of success is. Since the Civil Affairs Department is currently expending a lot of effort to promote the protection of minors, they’re hoping to have some new information or experience shared with them [by international NGOs].
So from their perspective, this is more important. Because there are also some social organizations which have built up their capacities in this area, and this is major area of the work of the Civil Affairs Department, the Department hopes that the experiences of international NGOs in this professional area may be able to help stimulate the development of Chinese social organizations. At the very least, this is an area that we in our interactions with the Civil Affairs Department feel they value. I hope everyone is able to intelligently grasp this selling point and compel PSUs to even more greatly value our organizations. This is my understanding.
Third Audience Member: We’ve just heard a few of our speakers discuss the registration process and subsequent operations. There are a lot of twists and turns and a lot of difficulties. In the morning we also heard an expert mention that the two channels of registration and filing for temporary activities were both legal. Since registering is so difficult, why doesn’t everyone just consider putting their files on record? How do you file [for temporary activities] annually?
Zhang Hongman: If you don’t have many activities, you can choose to file a record of your temporary activities, but the materials required to file a record of your temporary activities are in no way fewer than those required when registering. You need the same set of registration documents from your headquarters. If you only have one or two activities, you can file a record of these temporary activities. But if you’re like us and you have a dozen activities, or even more than a hundred projects, then this is obviously inconvenient.