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TO SERVE THE PEOPLE: NGOs AND THE

DEVELOPMENT OF CIVIL SOCIETY IN CHINA

ROUNDTABLE

BEFORE THE

CONGRESSIONAL-EXECUTIVE

COMMISSION ON CHINA

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

MARCH 24, 2003

Printed for the use of the Congressional-Executive Commission on China

(

Available via the World Wide Web: http://www.cecc.gov

CONGRESSIONAL-EXECUTIVE COMMISSION ON CHINA

LEGISLATIVE BRANCH COMMISSIONERS

House Senate

JIM LEACH, Iowa, Chairman

DOUG BEREUTER, Nebraska

DAVID DREIER, California

FRANK WOLF, Virginia

JOE PITTS, Pennsylvania

SANDER LEVIN, Michigan*

MARCY KAPTUR, Ohio*

SHERROD BROWN, Ohio*

JIM DAVIS, Florida*

CHUCK HAGEL, Nebraska, Co-Chairman

CRAIG THOMAS, Wyoming

SAM BROWNBACK, Kansas

PAT ROBERTS, Kansas

GORDON SMITH, Oregon

MAX BAUCUS, Montana

CARL LEVIN, Michigan

DIANNE FEINSTEIN, California

BYRON DORGAN, North Dakota

EXECUTIVE BRANCH COMMISSIONERS

PAULA DOBRIANSKY, Department of State*

GRANT ALDONAS, Department of Commerce*

D. CAMERON FINDLAY, Department of Labor*

LORNE CRANER, Department of State*

JAMES KELLY, Department of State*

JOHN FOARDE, Staff Director

DAVID DORMAN, Deputy Staff Director

* Appointed in the 107th Congress; not yet formally appointed in the 108th

Congress.

(II)

(III)

C O N T E N T S

Page

STATEMENTS

Hamrin, Carol Lee, Chinese affairs consultant and research professor, George

Mason University, Clifton, VA ............................................................................ 2

Ma, Qiusha, assistant professor of East Asian Studies, Oberlin College; research associate, the Mandel Center for Nonprofit Organizations, Case

Western Reserve University, Oberlin, OH ......................................................... 5

Simon, Karla W., professor of law, and co-director, the Center for International Social Development, Catholic University of America, Washington,

DC .......................................................................................................................... 7

Yuan, Nancy, vice president, the Asia Foundation, Washington, DC ................. 10

APPENDIX

PREPARED STATEMENTS

Ma, Qiusha ............................................................................................................... 28

Simon, Karla W ....................................................................................................... 36

Yuan, Nancy ............................................................................................................. 38

(1)

TO SERVE THE PEOPLE: NGOs AND THE

DEVELOPMENT OF CIVIL SOCIETY IN CHINA

MONDAY, MARCH 24, 2003

CONGRESSIONAL-EXECUTIVE

COMMISSION ON CHINA, Washington, DC.

The roundtable was convened, pursuant to notice, at 3 p.m., in

room 2255, Rayburn House Office Building, John Foarde [staff

director] presiding.

Also present: David Dorman, deputy staff director; Mike

Castellano, office of Representative Sander Levin; Tiffany

McCullen, representing Grant Aldonas, Department of Commerce;

Andrea Yaffe, office of Senator Carl Levin; Lary Brown, specialist

on labor issues; Steve Marshall, senior advisor; Susan Weld, general counsel; and Andrea Worden, senior counsel.

Mr. FOARDE. Good afternoon, everyone. Why don’t we get started.

Let me welcome you on behalf of the Congressional-Executive

Commission on China, particularly, Chairman Jim Leach and CoChairman Senator Chuck Hagel.

We are meeting today in a very difficult time for our country and

for the world. And I know that all of the members of our Commission support our fighting men and women abroad and are praying

for them and their families in this difficult time.

Also, I would like to introduce our new deputy staff director for

the CECC staff. He is my old friend and fellow language student,

Dave Dorman, who has been hired by Senator Hagel to be the staff

director for the Senate and gets the title of deputy staff director for

this Congress. David’s first day is today and his first of many

issues roundtables is today. David, welcome.

Mr. DORMAN. Thanks very much.

Mr. FOARDE. I would also like to remind you that there are two

additional issues roundtables in the next 2 weeks. Normally, we try

to have these every other week, but with the Easter recess coming

up in very short order, we decided to pack the front part of April

a little heavier. On Tuesday, April 1—note that is a Tuesday, rather than a Monday—we are having a roundtable on ‘‘Lawyers Without Law in China,’’ beginning at 2:30 p.m., in this room. Also on

Monday, April 7, we will have a roundtable on ‘‘Tibet and the Future of the Tibetan Language’’—also at 2:30 p.m. in this room.

Our topic for today is ‘‘NGOs [non-governmental organizations]

in China and the Development of Civil Society.’’ A question that

many of us, and as I see the faces of many friends in the room,

many friends here in Washington care a great deal about. We are

fortunate to have with us an extraordinarily distinguished panel of

2

experts. I will introduce them in more detail before they speak, but

let me just say that Carol Lee Hamrin, Ma Qiusha, Karla Simon,

and Nancy Yuan are here with us today.

So, let us begin. I am really pleased to introduce an old friend

and former State Department colleague, Carol Hamrin. Carol is a

Chinese affairs consultant and also research professor at George

Mason University where she works with the Institute for Conflict

Analysis and Resolution, and the Center for Asia Pacific Economic

Cooperation.

Carol’s current research interests include the development of the

non-profit and non-governmental sector in China, cultural change,

human rights and religious policy, and indigenous resources for

conflict management.

Carol, please.

STATEMENT OF CAROL LEE HAMRIN, CHINESE AFFAIRS CONSULTANT AND RESEARCH PROFESSOR, GEORGE MASON

UNIVERSITY, FAIRFAX, VA

Ms. HAMRIN. Well, I have the honor of starting today. The topic

I have been asked to speak on is faith-based organizations in China

and the possible role they may play in civil society.

I want to emphasize the growing importance of these organizations, both domestic and foreign faith-based non-profit organizations [NPOs], which have been relatively invisible groups, and I

think deserve more careful attention. I want to make first some

careful distinctions between two kinds of organizations.

One is religious organizations that promote traditional activities

of worship and prayer, religious sacraments, teaching the laity,

training clergy, proselytizing, and publication of sacred texts and

other religious materials. This is what we normally think of as a

faith-based organization. This is a tightly controlled sector in

China, as we all know.

Distinct from that is what I am going to focus on in my comments today, and that is faith-based non-profit organizations.

These are non-profits that have faith-based motivations, and hiring

policies, and funding sources, but do not do religious work, narrowly defined as in the other group. They offer social services in

other sectors—not the religious sector—like education, health, and

charitable work under the supervision of education, health, or civil

affairs authorities, not religious affairs authorities.

I would say before I continue, though, that both types are important for us to consider as part of China’s growing civil society. They

are voluntary organizations. They operate at the grassroots or popular level. Many are national or at least inter-provincial in scope.

They have a growing autonomy and operation. We can come back

and discuss that later. Both types actually do provide sources of

social capital, ideas, values, and networks that help people work

together on a voluntary basis. This is voluntary association for mutual assistance and other purposes.

As I began to do some reading in the body of research on civil

society development and democratic political reform in Asia, Africa,

and Latin America, people are finding that there is a complex

interaction between educated elites and grassroots organizations,

including religious organizations. In fact, some would claim that

3

faith-based organizations are the catalyst behind forming modern

voluntary associations that transcend the traditional ties of kinship

in local community to form a more modern civil society. So, I think

it is worth our attention to look at both and the role they may play.

In this brief few minutes that I’ve got, I want to focus on giving

you a few examples of domestic and international faith-based NPOs

working in China, and then talk about some policy implications.

I would start with the Amity Foundation, which was one of the

very first government organized NGOs [GONGOs] to be formed in

China. It has operated since the early 1980s. Some people think it

is independent, but actually, it is registered under the United

Front Work Department, just like churches and other religious organizations. It has been a channel for outside funding and services

from mainline Protestant religious organizations, many of them in

Europe and Hong Kong, and some in North America.

They began with teaching English just in eastern China. They

are based in Nanjing, but expanded to social welfare and health

work, and now to rural development in southwest China. They

really developed a lot of experience and expertise, as well as a

budget of $7.5 million last year. They have a good reputation in

China among the other NPOs, and have really been one of the

pioneers in China.

Another more recently organized counterpart is the Beifang

Jinde Social Service Center in Hebei Province, which is the first domestic Catholic NGO. And I think it has come much later just because of the political problems in the relationship with the Vatican.

What is very important for us to notice, but hard for us to notice,

is the smaller-scale, often unregistered local social service agencies

that have just sprung up spontaneously all over China, by individuals, congregations, and religious associations of various kinds.

Just to mention a few, there is a youth club that operates, virtually, on the Internet and by e-mail, in Ningbo, affiliated with the

Catholic diocese there.

Another is in Wenzhou, Zhejiang called the Salt and Light Christian Fellowship. It’s business people that are providing flood relief

and community service.

From my research, I can see that most domestic Buddhist, Taoist, and Islamic humanitarian work has kind of grown in tandem

with domestic and foreign pilgrimages to special holy sites. This

kind of religious tourism provides funds for development in these

areas, sometimes just small scale welfare projects, but even universities and hospitals are developing out of this.

The government response to such grassroots development is, basically, to kind of play catch-up ball, granting legitimacy to them

ex post facto in order to get access to the resources and try to find

some means of supervision over these developments. So, I’ve just

learned that the official Protestant organization has set up a new

social service department to encourage and provide guidance to

such local initiatives. They mention specifically the need to generate domestic funds—instead of just foreign funds—specifically,

from rich churches in coastal areas. So, the commercial factor is

there at work.

International faith-based NGOs are doing important work in

China. Most denominational groups work directly with their counVerDate 11-MAY-2000 12:37 May 28, 2003 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 86861.TXT China1 PsN: China1
4

terparts. For example, the Mennonites and Amity are implementing a Canadian Government aid project in rural areas in

China. The Islamic Development Bank works through provincial

Islamic Associations to fund schools, primarily.

The non-denominational, but still faith-based organizations tend

to partner directly with government officials, usually at the local

level, in non-religious sectors as I mentioned. I can give more

examples of that in the question and answer period if you want.

I would just mention that this kind of work really expanded after

the late 1990s, starting with the floods of 1998, the historic floods

in central China. Many of these large organizations, like World Vision International, which is one of the largest international relief

agencies, began to work in China at that time, and have since really expanded their operations. United Board for Christian Higher

Education in Asia is another such organization working in rural

areas, helping rural women.

On top of this effort, flood relief, or disaster relief, earthquakes

and such, the government’s new policy to develop western China to

try to address the regional disparities has focused on attracting

international resources, whether governmental or business or nongovernmental. This has led these international organizations,

including faith-based ones, to develop micro-loan projects and holistic community development projects all over northwest and southwest China, including significant work in Muslim, Tibetan, and

other ethnic minority villages. These include Buddhist and Islamic

organizations, as well as Christian organizations.

I will leave for discussion a point that I want to make, that there

has been significant impact from these outside organizations working in China with new ideas and new ways of operating. The modeling effect, in particular, has really started to change the way local

officials are working with society and their own NGOs. This trend

is going to accelerate in this decade.

Policy implications include, first, pay attention to what is going

on at the grassroots in China and to social and cultural bilateral

relations, not just to political and economic relations. I commend

the Commission for doing just that.

Second, do no harm. Recognize that the role of the Federal Government is limited in this arena. Change does not come overnight.

It will be driven from the inside, and the outside actors will be primarily non-governmental or even business through corporate social

responsibility [CSR] and so forth.

Third, I would just recommend the Commission pay attention to

and even check on whether there is a ‘‘level playing field’’ in the

use of taxpayer money for the support of civil society, rule of law,

and democratization in China. I think there may be inadvertent exclusion or discrimination in programming to the detriment of faithbased U.S. NGOs that might support Chinese faith-based NGOs.

In all the conferences on NGOs so far in China funded from outside, there is no mention of faith-based NGOs and their work. They

are off the radar screen for Chinese and American organizers and

sponsors, despite the central role of these faith-based organizations

in our own civil society. Even the modeling of inclusion in such

things as conferences, as well as projects, would in and of itself

5

promote Chinese officials to take a different, more positive attitude

toward the role of religious organizations in Chinese society.

Mr. FOARDE. Carol, thank you very much.

Let’s continue with Professor Ma Qiusha, who is assistant professor of East Asian Studies at Oberlin College and research associate at the Mandel Center for Non-Profit Organizations at Case

Western Reserve University. An expert on Chinese NGOs and civil

society, Professor Ma’s publications include, among others, ‘‘Defining Chinese Non-Governmental Organizations, Autonomy and Citizen Participation.’’

Welcome, Professor Ma. Thank you very much for sharing your

expertise with us this afternoon.

STATEMENT OF MA QIUSHA, ASSISTANT PROFESSOR OF EAST

ASIAN STUDIES, OBERLIN COLLEGE; RESEARCH ASSOCIATE,

THE MANDEL CENTER FOR NONPROFIT ORGANIZATIONS,

CASE WESTERN RESERVE UNIVERSITY, OBERLIN, OH

Ms. MA. My focus today is on the definition, classification, and

the terminology of Chinese NGOs. Before I go into detail, I would

like to make a very general summary based on my years of research on Chinese NGOs because time is so short.

As you can see, the first two pages of my statement are a very

general argument. Basically, I would like to argue if it is possible

under China’s one-party state for non-governmental organizations

to sustain and play an important role in China. My answer is yes.

On the government side, I would like to argue that during the

past two decades the Chinese Government has played an important

and crucial role in promoting NGOs in China, although it is only

in certain areas. On the other hand, the condition of the Chinese

Government’s policy to promote NGOs is that the Chinese Government believes the state has the ultimate control over NGOs.

On the NGOs side, I would like to say that these organizations

are non-governmental organizations, although they are still quite

close to the state. They are the most important instruments for the

people to participate in public affairs, to develop their personal interests and to get their voices heard. On the other hand, the development is unbalanced and in the very preliminary stages.

So having said that, I would like to first go directly to the classification of Chinese NGOs to answer the question, What are Chinese NGOs? I would like you to see chart 1 and chart 2.

Let’s start with chart 2. Chart 2 is, in fact, a chart about American NGOs. I would like you to see how the U.S. non-profit sector

is classified in chart 2, compared with the Chinese classification in

chart 1. The difference we can see here is, in the U.S. classification,

there are two types of NGOs. One is membership organizations.

Basically, they serve members’ interests. The second and bigger

category is Public Service.

For China, on the one hand, there are social organizations. On

the other hand there is a newly created legal status called non-governmental, non-commercial enterprises, ‘‘minban feiqiye danwei.’’

First, what is the difference between the U.S. classification and

the Chinese classification? In the U.S. classification, foundations

and funding intermediaries are classified as public service. So are

6

the churches. On the Chinese side, those foundations are classified

with membership associations as social organizations.

Also, religious groups are not under either side. That means, according to the official classification, that religious groups are not

NGOs. They are not managed and registered with the Ministry of

Civil Affairs, but rather under another official agency.

Before the Communist Party came to power, China had many,

many private associations and institutions, such as private schools

and hospitals. After 1949, first, the majority of civil associations

were suppressed; and second, all the private service providers were

nationalized, following the Soviet Union’s model.

Therefore, during that period in China there were no true private

or non-governmental organizations of any type. However, social organizations continue to exist and some old social organizations,

such as the Red Cross and other professional associations, remain.

Although eventually they were nationalized, on paper they were

still called social organizations.

Since 1950, the Chinese Government has issued three official

documents regulating NGOs, in 1950, 1988–1989, and most recently in 1998. So, during these three rounds of documents, the

first two documents only have social organizations. Thus, any type

of organization that is either on paper or actually exists is nongovernmental, is classified as a social organization.

However after the reforms, the government did realize the importance of using non-governmental organizations. Social service

providers, or professional service providers are under three major

promotions. The first time was in the early 1980s. The Chinese

Government called for ‘‘shehui liliang banxue,’’ generating social

resources for education. The second time was in early 1990, the

government had a slogan called ‘‘da shehui, xiao zhengfu’’ small

government, big society. In the late 1990s, the government called

for ‘‘shehui fuli shehui ban’’ social welfare provided by the society.

Under these slogans, non-governmental social and professional

service providers surged rapidly, and since the government had no

legal term to register them, it was a big mess. A lot of these organizations registered as for-profit. Therefore, in 1998, the government

created a new term called ‘‘non-governmental, non-commercial

enterprises’’ for these non-governmental service providers.

I would like to compare the Chinese definition of NGOs with the

Western definition. In the handout you see the very popular Western definitions of NGOs contain five features. On the other hand,

the Chinese definitions really address: (1) not funded by the government; (2) these organizations should not run for profit; and (3)

they are voluntary. So, there is no emphasis on non-governmental

and no emphasis on self-governance.

There are three differences between the Western definition of

civil society and the Chinese definition of civil society. First, civil

associations, especially political civil associations, are the core of

civil society in the Western sense. However, the Chinese definition

of civil society does not include this.

Second, civil society theoretically or ideologically, in fact, citizenship, civil rights, representation, and the rule of law. However, Chinese civil society does not emphasize these aspects.

7

Third, in the West, civil society represents democracy and sometimes confrontation between state and society. However, the

Chinese definition of civil society emphasizes constructive and mutually dependent relations between the society and the state.

Finally, the NGO terminology. There are currently six Chinese

terms that are the equivalent of the English word, NGO. Most confusing are ‘‘people’s organizations’’ and ‘‘mass organizations.’’ These

organizations are high profile, well established, and highly government controlled. However, many Westerners use them to represent

Chinese NGOs. Therefore, they neglect more grassroot or community-based NGOs.

I would like to discuss this more in the question and answer session.

[The prepared statement of Ms. Ma appears in the appendix.]

Mr. FOARDE. Perfect. Let’s do that.

Our next speaker is Karla Simon, professor of law and co-director

of the Center for International Social Development at the Catholic

University of America. Professor Simon is also the co-founder of the

International Center for Not for Profit Law, and editor and chief

of the ‘‘International Journal for Civil Society Law,’’ and has published widely on these topics. She has also done extensive work on

the legal framework for civil society organizations in China.

Karla, welcome. Thanks for coming this afternoon.

STATEMENT OF KARLA W. SIMON, PROFESSOR OF LAW AND

CO-DIRECTOR, THE CENTER FOR INTERNATIONAL SOCIAL

DEVELOPMENT, CATHOLIC UNIVERSITY OF AMERICA, WASHINGTON, DC

Ms. SIMON. Thank you, John. Thanks to the Commission for inviting me. I would like to say, I am a law professor. So, some of

this terminology may be a little bit difficult. So, what I am going

to do is start by referring to my written statement. And let me just

add for those who don’t have copies of it, if you give me your card,

I can e-mail it to you.

I talk about—the topic is ‘‘Creating an Enabling Legal Environment for Chinese NPOs, non-profit organizations.’’ And when I talk

about an enabling legal environment, I want people to think about

these four different things that really need to exist in order for

such an enabling legal environment to exist. And then we can talk

about how the Chinese legal environment for NPOs measures

against this.

The first is that there should be supportive legal framework legislation, which is the legislation relating to the establishment, governance and oversight of NPOs. Second, there should be supportive

legislation regulating NPO-state relations, allowing partnerships

between state entities and NPOs to be established. And this is the

crucial point, both with respect to service provision and with

respect to policy development. There should be supportive tax legislation permitting various forms of tax relief for NPOs and their

donors, thus creating an environment in which NPOs and the business sector can work together for the good of society. Finally, there

needs to be other necessary legislation that would assist the NPO

sector in its operations. For example, there should be good fundraising legislation.

8

In the work that I have done in China—and I have also worked

in many other transition countries and developing countries—it is

very clear that the non-profit sector, the NPO sector, is one that

really does create problems for the state. It creates problems for

the state because, as both Carol and Qiusha have said, it is very

easy to attract resources from outside the country into the not-forprofit sector for purposes of service delivery, for purposes of carrying on other activities.

Second, by virtue of the fact that the non-profit sector does provide services frequently to parts of the society that are poor and

under-represented, that means that the civil society or non-profit

organizations really have access to the people, and thus to political

power. So, the combination of the two things, the economic resources coming from outside and frequently from inside—and certainly as I’ll suggest, China has been very thoughtful in thinking

this through—the economic resources with the access to the people,

and therefore, to political power makes a state that is insecure

about its own position, and particularly a state transitioning from

socialism very fretful—shall we say—about anything that may encourage the non-profit sector.

But, I think China is not alone. When one looks at some of the

other transition countries, Russia, in Central and Eastern Europe,

if you look at other countries in Asia, if you look at countries in

Latin America, in Africa, you see the same phenomenon. So, China

is not alone in treating the non-profit sector with both suspicion

and fear.

On the other hand, one of the things that my research indicates

is that China has been really smart about what it has been doing

in terms of trying to attract the resources, particularly, of overseas

Chinese, into the development of the social agenda that the state

has. Carol mentioned the fact that there has been this development

in the West. That’s actually been happening for some period of

time. One of the first big major NGOs that—I mean NGOs in the

sense that they are very closely related to government—has been

working in China is the Foundation for Underdeveloped Regions.

So, beginning in the 1980s, when there was a loosening of some

of the strictures that were placed on semi-governmental organizations—if we can use that term—through the new regulations that

were adopted at that time, in 1988 and 1989, there was a real attempt to create structures along side the state that would be attractive in particular to overseas Chinese, for purposes of bringing

in money from the overseas Chinese so that it could be harnessed

for the development projects that the state really wanted to see

happen.

So, it is true that the regulatory mechanism began to open up

in the late 1980s and then again in the late 1990s. But in large

part, I think it was in trying to find ways that would make the resources coming in from overseas Chinese more available. It was

also directed to creating an environment in which the people of

China would feel that they could make contributions to these organizations. A very good example of that is Project Hope of the China

Youth Development Foundation, which obviously, does incredible

fundraising throughout the country and brings resources from local

Chinese into projects that deal with poor children.

9

In my work in China, I have been able to see a variety of different stages. One of the things that becomes very clear to me is

that the brilliance of the Chinese Government in thinking these

things through and in actually responding to needs that occur is

now finally being aided and abetted by an openness to outside technical assistance.

Before 1998, none of the technical assistance, none of the discussions, none of this was open. In the first years, when I started

working in China, everything was done quietly and all meetings

were held at the Ministry of Civil Affairs, and when Chinese

delegations came to the United States, they were very small meetings and there was never any openness. But, beginning in 1999— and this is after the 1998 regulations were published—with a

conference that was funded by the Asia Foundation, there was

openness.

My view of this is that the Chinese Government finally thought

that it was in a position to actually take account of things in an

open fashion. The Chinese Government sent the acting head of the

NGO bureau to speak in the United States at a conference, openly.

The paper was published. There have been, subsequent to that,

several conferences held. One of the points that I make in my

paper is that these issues of creating a legal enabling environment

are going to be the subject of four conferences within the year beginning in November 2003. Four big conferences, two of which are

paid for 100 percent by the Chinese Government.

So, in my view what is happening is that there is a progressive

move toward trying to create a more open and supportive legal enabling environment. However, China isn’t there yet. In my view, one

of the reasons why there is so much openness to the outside—I am

involved right now in a translation project to make all sorts of legislation from all around the world available in Chinese. There are

many things that they haven’t been able to think through.

I suggest some of these objectives in the end of my written statement. First, the state should move away from overt control of

NPOs and their activities and toward membership and fiduciary

government structures, with continuing government oversight.

Second, more mechanisms should be provided within the law for

transparency: Good internal reporting, record keeping and accounting rules, buttressed by the development of the governance norms

previously mentioned.

Third, there should be clear accountability, but not control mechanisms. This is the hardest thing for the government. There should

be accountability mechanisms to the state for funds received and

for programs implemented. And there should be accountability to

the public. There needs to be more openness about what NPOs are

doing, and the way in which they actually carry out their

programs. There should be more thought given to a clearer tax exemption regime, as well as creating tax incentives for the working

population through workplace giving, and to rationalizing the existing incentives for entrepreneurs and business, which are really

quite good, but they are not terribly rational.

Finally, there should be better regulation of fundraising and

asset management by NPOs. That should be strengthened because

at the present time there is an effort to move some of the state

10

assets into the non-state sector, and there needs to be some clarity

about how that is going to happen.

When I spoke in 1999 at the Asia Foundation conference, I said

at that time that the government was still viewing NPOs as children to be taken by the hand. However, the NPOs regard themselves, essentially, as teenagers. At the present time—since 1999,

the government, I think, is beginning to understand that perhaps

they are growing up, but there is a long way that they need to go

to have that happen.

[The prepared statement of Ms. Simon appears in the appendix.]

Mr. FOARDE. Thank you very much.

Our next panelist is Nancy Yuan. Nancy is vice president and director of the Washington office of the Asia Foundation. She works

directly with the Foundation’s China programs in law reform, U.S.

relations and exchanges, and speaks regularly on these issues,

issues relating to the rule of law and the development of civil society in China. Since 1979, the Asia Foundation has been supporting

a wide range of programs in China, focused on law reform, civil

society development, and U.S.-China relations.

Nancy, welcome. Thanks for coming.

STATEMENT OF NANCY YUAN, VICE PRESIDENT, THE ASIA

FOUNDATION, WASHINGTON, DC

Ms. YUAN. Thank you, and thank the Commission very much for

inviting me to speak at this session. I am very pleased to do so.

One of the benefits, I think, of being the last panelist to speak is

that I can say much less than I had intended with regard to a

number of these issues.

I think in looking over the broader context of how non-governmental organizations have developed over the course of time in

China, we need to take a slightly broader perspective in looking

over social-economic developments, and why the Chinese Government feels that the non-governmental sector is of benefit in China’s

overall economic development.

I think the advent of economic reform and globalization has led

to a wide variety of demands on the Chinese Government which

they are not able to meet. The Chinese Government, like many

other governments around the world these days, has budget deficits. They are downsizing the bureaucracy. Decentralization is taking place on a very large scale. As a result, the kinds of services

that people are used to are in decline with reform of state-owned

enterprises, and services related to farmers and the countryside,

there are many services that the government can no longer deliver

and they find it of benefit to allow the activities of non-governmental organizations to continue because they provide services,

often in the health and education area, pilot projects for elder care,

and a wide variety of other areas that the government is no longer,

in some ways, able to deliver. In some respects, the collaboration

between government and non-government organization makes the

line a little bit blurred, in fact, in terms of who is actually delivering services and who is responsible for that delivery.

As a donor organization in China—as John mentioned—donors

who are involved in development in China tend to use standard criteria to look for potential partnerships to Chinese organizations,

11

that is, independence from the government, representation of their

constituents and participatory decisionmaking. Chinese non-governmental organizations aren’t necessarily that far along in terms

of their own independence, and as Carol said, many of them are informal organizations, sometimes family associations, sometimes

just groups of people in villages that get together and see a need.

So, they are not organized under Western criteria with a board, a

mandate, and a budgetary process in the way that most organizations in the West are.

That creates a dilemma for donors as we look at organizations

that we may want to partner with. What it requires is an on-theground knowledge of exactly who these organizations are, whether

or not they can be accountable or responsible for the programs that

they deliver, and in fact, if they are delivering the services that

they say they are going to deliver. There is a healthy skepticism,

I think, among donors in addition to wanting to be supportive of

the non-governmental sector, in general.

I have been asked to talk about both what international organizations and donors are doing in China, as well as what they might

consider doing in the future. The non-governmental sector has developed very quickly over the course of time. The China Development Brief—which many of you may be familiar with—looks at

non-governmental activity in China. They concluded that China is

receiving well over $100 million each year in project funding directly from, or channeled through 500 international NGOs and

foundations. It is an enormous amount of money. If you look at

gifts-in-kind, which includes books and equipment and other kinds

of donations, that adds substantially to the total.

There are also large numbers of organizations according to the

China Development Brief. Seven-hundred different types of grant

making foundations, advocacy groups, humanitarian organizations

and faith-based organizations that are providing assistance to

NGOs in China.

The Asia Foundation has been providing assistance over a long

period of time to non-governmental organizations and has now

turned its attention to groups like the China NPO Network, which

acts as a clearinghouse for Chinese NGOs, providing a monthly

NGO forum, which they do with Foundation support, that brings

together officials, business, and NGO leaders to talk about legislative issues, collaboration and problems that NGOs face in China.

One of their most recent efforts is to look at self-regulation and

what that means in terms of standards and ethics for the non-profit community. The Tsinghua University NPO Center has also received a lot of attention with regard to their research on regulatory

issues facing NGOs, as Karla mentioned in the conference the

Foundation supported.

In addition to international donor organizations, which I will

come to in a minute, multinational corporations have also supported civil society development in the spirit of corporate social responsibility. These include companies like Nike, Adidas, Reebok,

Levi Strauss, Microsoft, Ford Motor Co., General Motors, and the

U.S.-China Business Council, which support a wide range of activities in health and education, rule of law, poverty alleviation, and

sometimes in policy research as well. So, it is true that there is a

12

fairly substantial commitment from the private sector to civil society development in China.

What more can we do to support the non-governmental sector?

International organizations can play a significant role in strengthening human resources capacity, in program development, in providing opportunities for conferences, networking and exchanges,

and while donors should not overestimate the ability of NGOs to

work in sensitive or political areas, the efforts of NGOs to operate

more independently and push the envelope in some fields are

worthy of support.

In addition to strategic planning, looking at program implementation, which are sort of the jazzy things for international organizations to support, one thing we should be looking at is the

operational aspects of how NGOs really work. How do they account

for their funds? How do they do budgets? How do they decide what

their mandate is going to be? Those kinds of nuts and bolts activities will enable them to better report to donors, to be sustainable

over time in attracting other funding, as well as to comply with

international ethical standards. International organizations can

help to improve the enabling environment for NGOs, as Karla said,

this includes providing support for NGO law and improving the

overall regulatory environment, as well as support for research and

interaction with like-minded organizations.

There are quite a number of university-based research centers

for the non-profit sector. Fudan University has a new one.

Tsinghua University, of course. There are two different organizations, centers at Beida, Peking University. And there is one in

Guangdong University, and at Zhongshan University, where there

is research going on in the not-for-profit sector.

Important for you to know as members of the staff of the Commission, all of these have international donor support. None of it

is American. Which brings me to my last point.

In terms of official assistance to Chinese NGOs, the U.S. Government has lagged behind other donors. We’ve seen this in the case

of rule of law efforts previously, but this is also the case in terms

of official assistance to the non-profit sector. The only two American organizations with a resident presence and a long track record

of supporting civil society organizations in China are the Ford

Foundation and the Asia Foundation. Faith-based organizations

have had a long history, as well as other foundations, but they are

not all present in China, in terms of being resident in China, and

their activities are sporadic depending upon their focus.

There is a marked absence of American groups working consistently on the ground to develop the capacity of Chinese organizations. On the other hand, other international donors, namely the

European Union, Canadian International Development Agency

[CIDA], and Australia Aid [AusAid] each provide more than a half

a million dollars a year in multi-year grants to support civil society

development in China. These donors, among others, have a commitment, not only to the civil society sector, but they also provide

funding as well as attention—and by attention, I mean they have

dedicated staff in the embassies who follow civil society development.

Official U.S. assistance to the civil society groups, as I said, has

been limited. If the U.S. wants to support the positive trend toward

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NGO development, funding should be provided to knowledgeable

groups to do so.

Thank you.

[The prepared statement of Ms. Yuan appears in the appendix.]

Mr. FOARDE. Thank you very much, Nancy.

Four excellent presentations and lots of food for thought. We will

go directly to our question and answer session.

Exercising the prerogative of the chair, I would like to begin with

a question to Professor Ma, if you would please. I am very interested in the link between existing Chinese NGOs and government

organizations at the national, provincial, and local level. How

strong, in your view, are those continuing links? And what types

are they? Are they financial? Or in terms of policy guidance? In

terms of personnel? How do those links work? I take it that for

some NGOs, those links are more tenuous than for others. And I

would like your views on all of those questions, if you would,

please.

Ms. MA. There are high profile NGOs. In fact, we call them

GONGOs. They have close relations with the government. Basically, like in the term, they are people’s organizations, and the

mass organizations. At the national level, there are 19 of them, and

nationwide 200 of them. These organizations still get full funding

from the government. Also the personnel get all the fringe benefits

of civil servants—this treatment is equal to that of government

employees.

Other organizations founded by the government in the 1980s,

like many foundations—the so called non-governmental organizations. Now the government has pushed them to what they call a

financially self-sufficient, self-governing, and self-recruiting status.

These GONGOs use a Chinese saying ‘‘pigu zhi hui naodai,’’ meaning that wherever one sits determines what one thinks. The government right now has a policy called ‘‘sannian duannai,’’ meaning

wean in 3 years. So these organizations right now have to find a

way to survive, to sustain themselves. Therefore, they are beginning to think differently than the government’s perspective.

However, personnel-wise, there is a very complicated policy for

the people who work at NGOs. For example, if you came to work

in these organizations before a certain number of years, you will

continue to receive your pension, your free healthcare, and your

government subsidized housing. However, if you are a new employee, everything starts new. You work on a contract. Most NGOs

do not provide a pension plan, healthcare, or insurance. So, there

is a wide range of autonomy or closeness with the government. I

should say for those like the All China Women’s Federation and All

China Federation of Trade Unions, these organizations will continue to be fully funded and very closely under the government’s

control. However, other organizations such as the trade unions,

previously official industrial management agencies, will eventually

leave government and serve their constituents more.

Mr. FOARDE. Very interesting. Carol, do you have a thought on

that, because I have a minute or so.

Ms. HAMRIN. I just wanted to add something to that. I think that

in the section that Professor Ma has called the People’s Organizations, these eight big organizations, that is where the religious orVerDate 11-MAY-2000 12:37 May 28, 2003 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 86861.TXT China1 PsN: China1
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ganizations also fit in. The point being that the Party controlled all

of society through overtly Party-controlled organizations, like trade

unions, and women, and youth. There was secret party control over

organizations such as religions, which really shouldn’t be run by

the Party.

But it’s the same kind of setup—very vertical control from the

Party, to the government, to these social organizations. That has

been changing. The dynamic there has been changing, in that even

those tightly controlled organizations are spawning their own

NGOs. Like the Communist Youth League setting up the Youth

Foundation, which has done this Project Hope effort, and is part

of the China NPO Network.

As they are forced to seek other sources of funding, other than

government funding, which they are being told they have to do,

then they gain autonomy. They have to start pleasing donors, not

just the government and so forth. So, the market dynamic is what

is driving greater autonomy, even though it is still very differentiated. But the dynamic is the same. Operating even under these

really tightly controlled organizations.

Mr. FOARDE. Thank you. A good point. Let me go on to my friend

and colleague, Dave Dorman, for a question or two if you have one.

Please go ahead.

Mr. DORMAN. Thanks, John. As John pointed out before, this is

my first day on the job. I, frankly, can’t think of a better way to

spend my first day than to participate in a roundtable on a topic

as important as this one, in front of a panel like this. Listening to

you share your knowledge, your research, and your learning on this

topic has been invaluable. And I thank you for that.

This is a question for anyone who would choose to address it. I

wanted to start with a quote from Professor Ma, which I found very

interesting. I saw nods of agreement, so I think there was a consensus on this. Professor Ma stated that NGOs are the most important vehicle for individuals in China to express their views. That

suggests to me that there may, perhaps, be a difference in the ability of individuals to express their views through NGOs, as opposed

to individually or through other means. Is that, in fact, the case?

Does your research show that?

Ms. MA. You want to know, besides NGOs, are there other mechanisms that people can use to express themselves?

Mr. DORMAN. Is an individual’s ability to express themselves

through an NGO somehow freer than other means? In other words,

as opposed to speaking individually? Are these NGOs set apart

somehow remarkably?

Ms. MA. Yes, especially the autonomous NGOs. They can express

their opinions, or deliver their opinions to the government. For example, there is an NGO for big companies. These organizations are

very interesting. The organization, itself, is independent. However,

all of their members are large, state-owned companies.

After the state gave them more independence, these companies

developed different interests, other than the state’s general economic policy. However, individually, they cannot tell the prime

minister, ‘‘I disagree with your opinion.’’ As an organization, they

can organize and invite experts to come and discuss very important

economic policies, and then prepare a report for the State Council

15

to show we think this way, and your requirement is unreasonable.

And the state will, somewhat, adjust to their opinions.

Ms. SIMON. I think that’s true everywhere in the world. I think

that individual voices may have some power, but certainly voices

in association have more power.

One of the interesting things that has happened in the regulations is that previously in China, prior to 1998, the only way to set

up an NGO was top-down. The state determined that it was something that needed to be done, and that was really the only way that

citizens could participate in activities.

Now, clearly if you had an idea, you could go to your local party

boss and say, well, I want to do this. But, it was much more difficult. In the 1998 regulations, for the first time, they recognized

that citizen action to come together to form an association is appropriate. Now, they require 50, and having written a couple of books

about what is good practice in the area, 50 individuals is far too

many, but there is a greater awareness of the notion that citizens

should be able to come together for citizen action, albeit not public

advocacy, but at least for a variety of different kinds of citizen

activities.

Mr. FOARDE. Let’s give Nancy a chance to make a point.

Ms. YUAN. I think it also depends on what area of interest you

are talking about. For instance, a program that the Foundation has

done that relates to migrant women workers, the problems of migrant women workers in Guangdong Province are substantial. And

people know that the factory conditions are bad. They know their

health services are bad. They know because they are illegal migrants, they don’t have any legal rights in those areas. They don’t

have rights to housing. There are a wide variety of problems.

So, I think the non-profit groups that work with them inevitably

have to work with government. And the government sees it in its

interest to listen to what these women say through these non-governmental organizations. Otherwise what ends up happening is,

you end up with instability, which is definitely what the Chinese

Government doesn’t want.

So, if it’s in the interest of the government, I think, in terms of

the environment, in terms of health policy, in terms of broader

issues, I think certainly NGOs have a voice. If your question is

leading to whether or not that leads to say, worker associations, or

labor associations, or those kinds of things, I think those things are

probably not on the table in terms of whether or not you have an

individual voice that will make a difference.

Ms. HAMRIN. However, I would add that this is something that

develops in stages. What’s happening in China right now is that for

the first time, people can organize voluntarily around personal interests and express their creative side and their organizational

side. Right now it has to be fairly non-political. But that’s new for

China. In the past, any private personal interests were considered

bourgeois. And you couldn’t join the local bird-watching club, or

anything.

So, the explosion of associations of all kinds that are voluntary

is just a major liberation for individuals and community groups in

China. Studies of development of civil society and democratization

elsewhere in the world would suggest that this trains people. It

16

helps people learn how you work together, how to organize, how to

make your voice heard, how to get to the media, and how to raise

funds. Then that develops into advocacy.

Sometimes just when the government steps into your business,

then you are forced to defend yourself. Other times when you decide it’s time to go stop the Three Gorges Dam. So, it’s a step in

development.

Mr. DORMAN. Thank you very much.

Mr. FOARDE. Very interesting. I would like to go on and recognize

a colleague who represents one of our Commission members, Senator Carl Levin. Her name is Andrea Yaffe. Andrea, do you have

a question or two? If you do, speak right into the microphone.

Ms. YAFFE. Thank you for coming to speak today. Dr. Hamrin,

I think you spoke a little about this, but I am wondering from the

others, what kind of role Congress or the executive branch can provide in encouraging the further development of NGOs or the legal

framework that you spoke about? Professor Simon.

Ms. SIMON. Well, I think Nancy made some suggestions. One of

the problems that exists is that there is not adequate funding for

civil society development in China. And as Nancy suggested, the

United States is basically not a player at all, at the present time.

Now, there are a variety of reasons for this as we know historically.

But, I think it is time that the United States recognizes that it is

in its best interest to begin funding in this particular area.

Nancy has some suggestions about the kinds of things that

should be done, using U.S. intermediary organizations, for example. But, it is sort of embarrassing when one goes to China and

does all of this work in China, and everybody else’s government is

paying for things, and our government is not. So, I would definitely

recommend that it happen.

Ms. HAMRIN. Could I just add a thought on the funding issue.

When I was still in the State Department in the early 1990s and

we were talking about a civil society initiative and rule of law initiative, many in Congress and in the media did not want to fund

anything in China, unless it was truly non-governmental, truly

independent, completely independent.

I think at that time we were kind of ignoring the fact that civil

society has these other attributes of being voluntary, being grassroots and so forth, that are important for us to take into account

when we are deciding those things. Also, I think that at that time

we were influenced by civil society analyses, from Europe’s experience after the fall of Communism, where we viewed civil society in

opposition to the state, and, you know, civil society is going to rise

up and overthrow the state. That was our paradigm.

But, that has changed enormously in research, thinking, and

writing about civil society. And I think Lester Salomon at Johns

Hopkins is one who has made the point that government funding

of NGOs is huge in America, and even more so in other countries.

So, you’ve got business, NGO, and government partnerships going

all of the time in civil societies in the West. So, why is that a bad

thing in China or other countries?

So, I think we are coming closer together, the Chinese learning

more about the importance of civil society and autonomy, but the

rest of us realizing, well, it isn’t totally black and white either.

17

Ms. MA. May I add something?

Mr. FOARDE. Yes, please. Go ahead.

Ms. MA. Because I am the one who grew up in China and experienced the Cultural Revolution and early stages of democratic

movements—I’ve seen it from a Chinese perspective and I’m a historian—so, from a Chinese historical perspective. I think it is crucial for the U.S. Government or policymakers to realize that we

have to understand Chinese civil society and Chinese NGOs, as

well as their relations with the state and the government, under

China’s historical and cultural circumstances.

That is, China has its own deep-rooted concept, which is rather

different from the Western concept of civil society. They do not see

the government and society as opponents or separate, but, the two

as a unit. Also in China, there is a different concept of citizenship.

In America, if you ask any person about citizenship, the first thing

you will hear is ‘‘What my rights as a citizen are.’’ For a Chinese

citizen, the first thing is your responsibility for being a good person, following the government, doing things for society.

So this is a difference. There are many things. China may never

reach the stage that the state and society as Western countries. So,

that’s why I introduced the Chinese concept of civil society, which

is constructive, mutually dependent relations. Thus, if the U.S.

Government does not grow out of the mentality of seeing civil society only in terms of human rights, then it will not be a positive

player in promoting a Chinese civil society.

I think this is very crucial. First you have to see the whole landscape. The human rights record is only part of the Chinese reality.

Another part is the monumental change in the grassroots of communities. I visited communities where they said, ‘‘Now that we

have the right to vote on, ‘Do we build a fence around our neighbor,

or should we plant trees?’ And ‘What do we do during the summer?’ ‘What kind of program we can organize for our children.’ ’’ These

were all government controlled in the past. So, these kinds of

things are really developing the concept in the people’s minds, of

what is a civil society, what are human rights. That is why I think

that is very important.

Mr. FOARDE. Thank you. Very useful. Also representing one of

our Commission members, Under Secretary of Commerce Grant

Aldonas, is Tiffany McCullen. Tiff.

Ms. MCCULLEN. Thank you, John. I would like to thank the panelists for providing us with so much useful information today. I

have a question if Professor Simon might want to start, and the

other panelists would like to answer, I would appreciate that.

Noting that the regulations governing Chinese NGOs are supposed to be revised soon, do you think it will change the management of foreign NGOs in the areas of taxes, hiring procedures,

legal status, or their ability to open branch offices in other areas?

Ms. SIMON. Well, a couple of things are happening. When they

promulgated the new regulations, there were three, in 1998. They

did not promulgate regulations in the area of foundations or in the

area of foreign organizations. They had drafts of each of these.

They took them off the table.

Let me just say about foundations. There has been some activity

in that area. They had a conference in that area in December and

18

there—as I was talking about other forms of fiduciary obligation,

I think there is going to be some progress. There is nothing that

has come forward anytime recently that I know of that anybody

even thinks that there is a draft with respect to foreign organizations.

In large part, that is because the regulations that they had originally promulgated were ones that distinguished foreign organizations from domestic organizations, and the legal experts throughout

the government say, ‘‘Well you can’t do that now, because of our

obligations under WTO. We have to have a ‘level playing field’ between the domestic organizations and the foreign organizations.’’ That called a false stop to the attempt to get the regulations out.

And where they are on that, I’ve been trying to find out, and I literally have no idea. So, it is very hard to answer your question. It

is something that I am quite interested in as well, and I haven’t

been able to get any answer from anybody. And, I know a lot of

knowledgeable people there, and nobody seems to know.

So, I suspect that what they are trying to do is do something that

won’t over-regulate the foreign organizations, will permit foreign

organizations to set up branches, but that is some ways down the

road.

Ms. MCCULLEN. OK. Thank you.

Ms. MA. My most recent e-mail communications with Chinese officials indicate they are trying to give foreign NGOs an equal status with Chinese NGOs. Previously, there was no law for foreign

NGOs. The foreign NGOs, in fact, have to follow basically every

Chinese regulation used for Chinese NGOs, plus something else.

So, right now it’s sort of like an unofficial channel—they said the

new regulation will treat all current foreign NGOs exactly as Chinese NGOs. That’s what I heard recently.

Ms. MCCULLEN. Thank you.

Mr. FOARDE. Our practice at these roundtables has been to invite

our own CECC staff colleague who is most responsible for the issue

being discussed to ask a few questions, and so I am delighted to

call on our friend and colleague, Andrea Worden, who was the chief

instigator of this particular event, and did all of the heavy lifting.

Andrea.

Ms. WORDEN. Thank you, John. Thank you all for coming. It was

fascinating to listen to each of your presentations. You all seem to

be in agreement that we need to understand civil society differently

with respect to China, compared with how we might understand

the concept in the United States, or in Western and Eastern Europe. That is, civil society does not include a confrontational relationship with the state. But, I am curious about political limits, if

you will, of NGOs functioning in China.

For example, we are all aware of Wan Yanhai, the AIDs activist

and leader of an HIV/AIDs NGO, who was detained last summer

for about a month and then released. I am curious if you all might

address this question of the political limits of activism in NGO civil

society. Are you aware of any other NGO activists who have been

detained, or imprisoned, or if any NGOs have been de-registered

for political reasons? I address this question to all of you.

Ms. HAMRIN. One of the problems with the very vague legal and

regulatory environment is that it leaves a lot of discretionary

power in the hands of government officials. And, they can sort of

19

arbitrarily decide what is permitted and what isn’t on a case by

case basis. Sometimes it’s purely a matter of what is happening

around the world or in China.

For example, the National People’s Congress, or the Party Congress is going to be held, and so someone who published embarrassing information at that time is in trouble, but they might not

have had trouble if they have done it the year before, or a couple

of months later. It is so arbitrary. And that is one of the things

that is really hampering the development of this whole sector, because you are always playing guessing games and playing pingpong politics. You know, graze-ball politics. You want to hit it on

the edge of the table and press the envelope, but stay on the table.

So, that is one of the reasons that I think the NGO community

is very insecure. They are being told they should provide more social services. The government is just heaving off its responsibilities

to social forces, but not providing the environment they need to

really survive and succeed. How can you raise funds to do what the

government tells you you now should do? It’s really a mess.

Ms. YUAN. It is really a mess. I think for organizations that work

in China, one of the most important things you have to do is to listen to your partners. People who work in this area and have to live

with these political dynamics really know how much risk they want

to take at any given time. Sometimes they move a little bit forward, and sometimes they pull back.

I think as you talk to people who either pursue lawsuits or are

engaged in some kind of activity that could be sensitive related to

labor or the environment, they have a tendency to know when the

time is going to be right, or it is not going to be right. And if they

miscalculate, they are the ones who are going to suffer. So, I think

there is just so much that we as foreigners can push. But at the

same time, I think there are some very courageous people who are

going to be out there and they are going to get their hand slapped.

Ms. SIMON. I have been impressed at the openness in the four

that I was talking about, of people being willing to criticize the government’s policies with respect to NGOs. It was really quite astonishing to sit in this conference in November where I made a lot of

the same points that I made here and Chinese lawyers and civil

society activists were getting up and making the same points. They

were saying, as Professor Simon said, we should do this. Very

openly. Very strongly. So, I think it just depends on, as Nancy

says, what the issue is.

One of the things that is also true is that, former government officials who are now in the private sector working for NGOs, or

working for universities are very strong critics of the government’s

policy—Yan Mingfu, for example. People like that who have credibility are out there criticizing the government for what it is doing

in this area, and not paying attention to the freedoms that are necessary. There is even going to be a freedom of association seminar

at Beida in May.

Ms. MA. I agree with Nancy and all the panelists. The timing

and the issue is very crucial. In certain times, for example, the anniversary of Liu Si [June 4] that is definitely a taboo. It is not just

the timing, but timing is an important factor, because it was the

20

time that Canada issued him an award. It is also the same time

China has the CCP’s Central Committee meeting.

Also, the issue is crucial. For example, for a while the Ford Foundation was in trouble because the Ford Foundation made a statement about a sensitive issue. So, there are certain issues you

cannot touch.

Fortunately, most Chinese NGO leaders—fortunately and unfortunately—know the rules of the game. They grew up in that environment. They know not to touch the grenade. They know where

the wrong button is.

When I interviewed these people, they said there are just so

many things we can do. For example, an activist for the Chinese

environment, when I interviewed him, said that when he founded

the Friends of Nature, his first intent was to influence government

environmental policy. Later, he thought, if that is our mission, we

will accomplish nothing. Therefore, we decided we wouldn’t do that.

Then we switched to education, educating children, and educating

the public, to be more aware of the environment. Therefore, they

do accomplish a lot in that area.

Unfortunately, it is too practical of Chinese. So there is not great

achievement of them in the political and policymaking area.

Mr. FOARDE. Thank you very much. I would like to go on to our

friend and colleague, Steve Marshall, senior advisor with the Commission staff. Steve, do you have a question for the panel?

Mr. MARSHALL. I found all of this extremely fascinating, and

there are some recurrent themes that keep coming up over and

over again: Paradox, contradiction, differentiation—I will try to

break away from that, even though it fascinates me so much.

Dr. Hamrin, you specifically mentioned western regions, which

also interest me a lot, Tibet, Xinjiang, areas that are very poor,

very much in need of outside support in just about every area. Yet,

these are the most politically sensitive areas as well, where any

support, for example, from the U.S. Government, might raise eyebrows. Can you suggest to us how we could put a positive foot forward in terms of helping local people, but not cause anyone trouble

or risk in doing so?

Ms. HAMRIN. The sensitive issue there is the independence of

Tibet. Independence advocates, when they mention Tibet, usually

are talking about a different entity than the autonomous region of

Tibet today. They are talking about the former kingdom of Tibet

which took in large areas of five provinces, current provinces of

China. I think many Americans aren’t fully aware of that.

So, there are many organizations working with Tibetan areas,

both in Tibet and in these other provinces of Tibet. I found it quite

amazing how much is actually going on in terms of anti-poverty

work, health, education and so forth. These are considered non-political, and they are considered anti-poverty. The officials that you

end up dealing with are people whose job it is to get something

accomplished in these areas, and it seems that there is a lot more

that can be done.

Now, whether the U.S. Government can do something on that

front, it’s work for non-governmental organizations to do, primarily.

I don’t fully understand the funding connections between government and non-governmental organizations, but it does seem to me

21

that when we put together our policies, bilateral political policies

with China, when we decide on our Tibet policy, that we have to

take into account all of these things that are going on that we normally are not aware of and factor that in. And make sure that

whatever policies we have are not going to pull the rug out from

under those efforts.

Mr. MARSHALL. What if you add religion into the mix, whether

it is in Xinjiang or Tibet? That would, of course, make things a bit

more sensitive, but by rights that should be non-political. Would

you agree with that?

Ms. HAMRIN. As I understand it, U.S. Government policy has

never been to officially promote independence of Tibet politically,

but has been exactly based on human rights concerns. We want to

see that the culture of these areas, including Tibet, is preserved,

and that means religious culture for almost all of these ethnic

minority areas: Tibetan Buddhist, or Muslim, or there are some

Christian minority groups as well. So, you can’t distinguish between culture and religion.

One of the reasons that our religious freedom policy is so sensitive in China, is that Chinese think of religion as the ethnic

minority group’s religion. And so, it touches on their worry about

separatism in those areas. So, it seems to me that the international

religious freedom and human rights policy that we have, in general, should be very front and center to our policy in talking about

these areas, that we could make a distinction between that and

promoting independence or separatism. Usually, we don’t make

that very clear.

Mr. MARSHALL. Thank you.

Mr. FOARDE. I would recognize our friend and colleague, Lary

Brown, who is our specialist on labor issues. Lary, do you have a

question or two for the panel?

Mr. BROWN. I do. Both Professor Hamrin and Ms. Yuan made a

passing reference to the impact of U.S. companies, corporate social

responsibility programs on the NGO sector. I was wondering if either of you or the other panelist would care to elaborate on what

you think the impact of the money U.S. companies are spending on

CSR is having on the development of NGOs and civil society in

China, and in particular, whether you think it is going to have a

substantial impact?

Ms. YUAN. The support is not usually given to develop civil society in China. It is usually given for a program that advances some

particular interest that the company happens to be interested in.

I think, indirectly, it supports civil society. Usually, it is given directly to a Chinese NGO, or it is given to an intermediary organization like the Asia Foundation to work with the Chinese NGO.

It’s to do something very specific with funding, so they have to

do the project, plan for the project and report on the project afterward to show how they’ve used the funding. That in and of itself

is developing the capacity of the organization. But, I would not say

that it is necessarily directly to support civil society development.

Now, whether or not it has a broader impact is very hard to tell

at this stage. I would say that in theory it does—whatever the

project is, it does something good at the time. That they deliver the

service or whatever it happens to be and it is a good project,

22

whether it has broader implications for a trend or movement in any

way depends on whether or not it is going to be a one-off project,

or it is part of a series of projects.

It depends on what the goal or objective was for the project to

begin with, whether it had a broader goal, such as improving the

rights of women in China, or if it was to help these particular

women in this particular factory to improve their air quality. So,

it really depends on the circumstance.

That said, I think it is all to the good. Anything that companies

want to do in this area, I think, helps the environment showing

that American companies care about Chinese organizations, that

they care about the Chinese people, and that they actually want to

improve the environment in which they do business.

Ms. HAMRIN. I’ve just started to look into this area a little bit,

so I don’t know enough about it yet. But, I did see some statistics

that show American and Japanese monies going into China are

heavily weighted toward educational scholarships and fellowships,

and areas that would then help provide good future employees like

the IT [information technology] companies putting money into IT

departments in universities and so forth.

I was with a foundation executive in January, in Beijing and

Shanghai, and we met with committees in both Chambers of Commerce, American Chambers of Commerce, to talk about this issue,

and I was fascinated. It seems to me that there is some new thinking going on there. That they want to do things differently, not just

these ad hoc, goodwill sorts of efforts, but they really are beginning

to see that they could do more and have a bigger impact. This executive I was with gave a speech in Shanghai at their monthly luncheon and was suggesting there was a lot more that they could pass

on, besides funding, like their expertise in so many areas, how to

run an NGO, how to do accounting or auditing. They were very interested in cooperating with that kind of training effort in the NGO

community. So, I think they are just starting, and there are going

to be two events going on, one in Beijing and one in Shanghai in

May in this area.

So, I believe the Department of Commerce is going to be involved. I think perhaps the DRL [Democracy, Human Rights, and

Labor] at the State Department is involved.

Ms. SIMON. Yes, I have the agenda for the Beijing conference

with me. I can give it to you.

Mr. BROWN. Thank you.

Mr. FOARDE. Our time is getting very short here. So, I would give

the last set of questions to Andrea Worden, if you want. And then,

perhaps, each of the panelists would say a final word before we adjourn. So, Andrea, you have 5 minutes for questions, and then we

will get a final statement from everyone.

Ms. WORDEN. I think each of you has addressed the issue of

funding; that funding for NGOs in China is inadequate. Besides

international funding, and Chinese Government funding for NGOs,

where do Chinese NGOs get their funding? Is there a sense of philanthropy in China; are there individual donors? How does that all

work?

Ms. MA. In terms of state funding, there is a very interesting

twist to understanding what the meaning of NGO is. Both the ChiVerDate 11-MAY-2000 12:37 May 28, 2003 Jkt 000000 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 86861.TXT China1 PsN: China1
23

nese Government, as well as Chinese NGOs, whenever they emphasize the autonomous nature of NGOs, they will say there is no

government funding. So, in this case, that means that the Chinese

Government does not fund real NGOs. This is a big problem for

Chinese NGOs.

However, international funding is crucial for the grassroots and

the real NGOs. The real key is here. I recently studied Yunnan

NGOS, and I also visited many NGOs in other areas. Lots of NGOs

emphasize that their biggest problem and difficulty is funding.

However, none of the Yunnan NGOs said they have a problem of

funding, because international NGOs want to give money to Chinese NGOs. As Nancy said, they need to find the right partner.

Right now, Yunnan NGOs’ development is under that kind of culture. They understand international grants distribution organizations. They need a good partner. They need a good project. As long

as you have good projects, you can get international funding. Right

now there is $100 million dollars from private resources internationally that go to China. There are a lot of independent NGOs

that are almost 100 percent funded by international sources, which

is not healthy. However, that is the only way they can get money.

Ms. SIMON. I think that the law in China, the donations law and

the tax law really do encourage donations by entrepreneurs, and

there is a lot of money coming in from locally based entrepreneurs.

In my experience, projects that are extremely worthwhile—I mean,

Project Hope did have a scandal. But, back when Project Hope was

really a good project, a lot of just ordinary Chinese people contributed.

There was recently an article in China Daily, which members of

the Tenth National Peoples’ Congress-Chinese People’s Political

Consultative Conference talked about these issues. So, I mean this

is becoming a big deal, and people are becoming more and more

aware of the fact that it is important to have legislation and also

that it is part of the social system that people do it.

Ms. HAMRIN. For the most part, there hasn’t been domestic fund

raising until very recently, and it is still very difficult. Even the donations law which says that you can donate to charity doesn’t actually say that charities can raise funds. Can you go ask, or is that

illegal? Do you have to wait until somebody sends you a check?

There are all kinds of little glitches like that that catch you up.

And, there hasn’t been much tax benefit for giving. It’s something

like maybe 30 percent for individuals, but only 3 percent for corporate donors. So, it is small. There are a lot of glitches in trying

to make it actually function.

But, I also think that there are only a certain limited number of

national large GONGOs, trusted groups that are really allowed to

do this kind of nationwide fundraising. So a lot of the philanthropy

that has come into China has been through overseas Chinese, global networks of all kinds, including faith-based networks where

people are following traditional channels of philanthropy and giving to their hometowns and their schools and so forth. So, there is

a lot of that.

Hong Kong has been a major channel of funding for NGOs. It is

a base for many of the international NGOs operating in China. And

24

it has been a real big model to show the Chinese what can be done

in this area.

Mr. FOARDE. Let us draw this to a close by giving each panelist

about a minute to make a final comment if you would like to. And

maybe we will start with Nancy Yuan, if you would. I can come

back to you, if you like.

Ms. YUAN. Two seconds.

Mr. FOARDE. OK.

Ms. YUAN. I wanted to thank you all for doing this. I think it is

a very useful activity to be able to get these ideas all on the table,

get it on the record and have an opportunity to clarify some of

these issues. I think there is a lot of misunderstanding about the

development of civil society and NGOs in China, and I think that

this is very helpful. Thank you.

Mr. FOARDE. Carol.

Ms. HAMRIN. I would just say that when we look at the picture

in China, if we look from the top-down, we see a lot of abuses,

where the government is restricting the development of civil society, restricting religion and so forth. And that is part of the truth.

But, if we look at the bottom of society and look bottom-up, we

suddenly discover all kinds of things going on as people push back.

So, we’ve got to have both parts of the picture when we are looking

at policy, and we need to keep in mind our social and cultural relations with China, which are not governmental, but which the government is duty-bound to try to promote or defend.

Mr. FOARDE. Karla.

Ms. SIMON. I would also like to thank the Commission for doing

this. I think it is extremely important and we do need to clear out

a lot of the cobwebs in our thinking about these issues.

But, I think also there is just a tremendous amount of really

hopeful stuff happening. The government is going one step forward,

two steps back consistently in this area as well as in others. But,

there is just no connection between working there 10 years ago and

working there now. It is just completely different. Much more open.

Much more willing to engage.

And I think that that message is a message that the members

of our government and the Members of the Congress really need

to know. The American people don’t know it yet, but hopefully

Members of Congress can find out and that would, I think, change

some of the attitudes about funding for China.

Mr. FOARDE. Professor Ma.

Ms. MA. Yes, I think the period from 1995, when the World Conference on Women was held in Beijing, to 1998, the most recent

Chinese Government regulation, should be considered as the turning point in Chinese NGO development. Right now, I suggest, as

Karla said, a lot of really positive things are happening. The U.S.

Government and Congress should seize the opportunity to be an

active and positive player, and I think Chinese people—from the

Chinese NGOs perspective, they like not just money—they call donations blood transfusions, rather, they like the technical help, the

theoretical training, capacity training, those kinds of new perspectives, which not only work in the U.S. and other developed countries, but it is very effective in developing countries.

25

Mr. FOARDE. Thanks to all four of our panelists, and on behalf

of the Chairman and Co-Chairman of Congressional-Executive

Commission on China, Congressman Jim Leach, and Senator

Chuck Hagel and all of the members of the CECC, thanks to the

panelists, to the staff panel, and to all of those who attended, particularly those who waited the extra half hour because of our evacuation glitch. Thank you for coming. We look forward to seeing you

next Tuesday afternoon at 2:30 in this room for another issues

roundtable. Thank you.

[Whereupon, at 4:40 p.m. the roundtable was concluded.]

(27)

A P P E N D I X

28

PREPARED STATEMENTS

PREPARED STATEMENT OF QIUSHA MA

MARCH 24, 2003

NONGOVERNMENTAL AND NONPROFIT ORGANIZATIONS AND THE EVOLUTION OF

CHINESE CIVIL SOCIETY

1. GENERAL SUMMARY

What are Chinese NGOs? Is it possible that, under China’s one-party state, nongovernmental organizations can sustain and play important economic, social, and

political functions? My answer is Yes. The last two decades have witnessed the dramatic increase of Chinese NGOs in number, size and influence. Barely extant before, these new organizations carry out many social, economic, and cultural tasks

previously controlled or neglected by the government, from establishing centers for

abused women and abandoned children, to organizing community recycling programs. These institutions are by far the most powerful instruments through which

Chinese people participate in public affairs, develop personal interests, and make

their voices heard; they indicate a more active and engaged citizenry than ever before. The development of NGOs in the past twenty-odd years is a key step in the

evolution of a civil society in China.

Given China’s current political condition and her historical background, its development of NGOs is very unbalanced and still in the preliminary stage. This is reflected in the uneven growth of NGOs in different regions and subjects. Though

NGOs and civil associations are very active in economic development, poverty alleviation in poor regions, and community building, others in politics, religion and advocacy play an insignificant role in the overall rise of NGOs. Their involvement in

policymaking is also very limited.

Under China’s current political system, without the government’s approval and

encouragement, the upsurge of nongovernmental organizations would be impossible.

Since the opening of China in 1978, the government’s policy toward NGOs has

generally been positive. Understanding the political consequences of NGOs, the government is still convinced that NGOs, with the support of the general public, private

sector, and international nonprofit sector, can provide much needed social and professional services, as well as intermediary mechanisms for economic and social

transformations. By legalizing and promoting NGOs, especially those related to the

economic and social development, the government has played a crucial and positive

role in NGO growth in China.

However, during these years, the official attitude toward NGOs has been inconsistent and self-contradicting, volleying between encouragement and restraint. A requirement of the government’s promotion of NGOs is its belief that the State has

ultimate, especially political, control over NGOs. The Chinese Communist Party

(CCP) and the government’s concern about the political risk of promoting NGOs has

been intensified during different periods and as related to different issues, and the

government has not hesitated to suppress these organizations or their activities if

it believes they form a threat to national interests and security. All NGOs have to

follow political principles in order to legally exist. In this sense, all NGOs, no matter

how grassroots or self-reliant, do not enjoy complete autonomy. Yet, we must recognize the significant gap between the rhetoric of the party-state’s intention and what

actually can be enforced by the government. In reality, the NGOs in China enjoy

much greater autonomy than may appear on paper.

In the following sections, this article will discuss China’s official NGO classification, definition and terminology, based on Chinese official documentation, the author’s interviews of Chinese officials, NGO leaders and scholars, as well as English

and Chinese NGO literature.

2. THE OFFICIAL CLASSIFICATION OF CHINESE NGOS

What are the Chinese NGOs according to China’s legal documents and official policy? Many western as well as Chinese studies of nongovernmental organizations in

China have taken the term ‘‘social organization’’ to be equivalent to the western

term ‘‘NGO’’ or ‘‘NPO’’ without recognizing that Chinese ‘‘social organizations’’ constitute only part of the full range of the country’s NGOs. This is largely because

until most recently the Chinese government itself used ‘‘social organization’’ as a

unified term for organizations that are NGOs in the Western sense and refused givVerDate 11-MAY-2000 12:37 May 28, 2003 Jkt 000000 PO 00000 Frm 00032 Fmt 6601 Sfmt 6621 86861.TXT China1 PsN: China1
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1 Xin Chunying and Zhang Ye, ‘‘China,’’ in Thomas Silk, ed., Philanthropy and Law in Asia.

(San Francisco, CA: Jossey-Bass Publishers, 1999), p. 91. 2These documents are: ‘‘Regulations of Registrations of Social Organizations (SO)’’; ‘‘Temporary Regulations of Non-governmental and Non-commercial Enterprises (NGNCE, minban

feiqiye danwei)’’; and ‘‘The Temporary Regulations of Non-commercial Enterprises (shiye

danwei).’’ According to the author’s interview with an official in the Bureau of Nongovernmental

Organizations, 2001, Beijing, China, a revised document on regulation of the foundations and

a new executive document on foreign NGOs in China are forthcoming. 3The NGNCEs are income-making institutions that do not produce products but provide services. The 1998 Regulations for the nongovernmental and noncommercial enterprises clearly stipulates that the NGNCEs must be established with non-state funds, and engage in not for profit

social services. 4The Ministry of Civil Affairs, ‘‘The Provisional Measurements of Registration of Nongovernmental and Nonprofit Enterprises.’’ Dec. 1999.

ing legal status as NGOs to a vast number of private not for profit service providers

such as non-state-run schools, hospitals or other professional institutions. In a recent study of Chinese NGO law, the authors still state: ‘‘NGOs are usually defined

as ‘social organizations’ ’’ 1 (Xin and Zhang, 1999, 91).

Not until 1998, were a great proportion of private nonprofit organizations in

China excluded from the official classification of non-governmentally run organizations. The latest Chinese government regulatory documents, issued in 1998, provide

by far the most comprehensive system in PRC history, covering a highly diverse

nongovernmental sector; they are the key documents establishing the Chinese definition of NGOs.2 According to the new official classifications, NGOs include two

general categories: social organizations (SOs, shehui tuanti, or shetuan), and nongovernmental and noncommercial enterprises (NGNCEs, minban feiqiye danwei).

(See Chart 1.) 3 Under these two general categories, Chinese NGOs are officially

divided into different types according to either their organizational forms or professional missions. The SOs are academic, professional or trade associations, federations and foundations, while the NGNCEs are divided into ten general types:

education, health care, cultural, science/ technology, sports, social welfare, intermediary services, employment service, legal service and others.4

Since the establishment of the People’s Republic of China, the government has,

in 1950, 1988–1989, and 1998, issued three rounds of documents regarding the classification, registration and regulation of organizations outside of the government

system. The first two rounds classified all types of associations and institutions that

are nongovernmental into a single category: social organizations. In the early 1950s,

the government—following the Soviet Union model—nationalized all private schools,

hospitals, charitable organizations and other service providers. From then on until

the dawn of the reforms in 1978, no private nonprofit service providers existed in

China. Therefore, before the reforms, social organizations were basically membership associations. Then, starting in the mid-1980s, the government founded a number of ‘‘nongovernmental’’ foundations and charitable organizations to generate

international and Chinese private money for certain public causes. As there was no

existing category for this type of organizations, they were, and still are up today,

officially classified as social organizations, even though they are not membership

entities.

The term NGNCE was created by the government in 1998 to provide legal status

and unify the official management of rapidly growing private nonprofit service institutions. After the opening reforms of 1978, there was a pluralization of cultural, social, and economic interests, which created large-scale needs that the government

was no longer able to deliver. It has since become clear that state-owned schools,

nursing homes, healthcare and social welfare providers, as well as research institutes no longer suffice. With the state’s permission and encouragement, all kinds

of non-state-owned or private social and professional institutions emerged to fill the

gap.

30

5Guojia tongjiju ed. (national bureau of statistics), Zhongguo minzheng tongji nianjian (China’s civil affairs statistical yearbook) (Beijing: China Statistics Publishing House, 2001). Also,

private interviews with MOCA officials, Beijing, 2001.

CHART 1: CHINA’S OFFICIAL CLASSIFICATION OF NGOS

Under China’s current dual registration system, all private organizations have to

have a supervising government body in order to register with the Ministry of Civil

Affairs (MOCA). Chinese NGOs call these bodies ‘‘mothers-in-law.’’ Both social organizations and NGNCEs are required to register with MOCA and its local branches.

According to the 2001 official statistics, 136,841 social organizations of all levels registered nationwide. Although officials at MOCA estimate that there are about

700,000 NGNCEs in China, in 2000, only 20,000 were registered with MOCA.5 As

many private providers and institutions have difficulty finding appropriate bodies

to serve as their mothers-in-law, they have to either register as for-profit enterprises

under the bureau of industry and trade, or as non-corporate organizations. It was

due to this inadequate classification system that the government created the

NGNCE category in 1998. This classification is similar to the category of ‘‘public

service’’ in the United States. (See Chart 2.)

31

6This chart is taken from Lester M. Salamon ‘‘Scope and Structure: The Anatomy of America’s Nonprofit Sector,’’ in J. Steven Ott, The Nature of the Nonprofit Sector (Boulder, CO: Westview

Press, 2001), p. 24. 7Lester M. Salamon, & Helmut K. Anheier, ‘‘In search of the nonprofit sector I: the question

of definitions,’’ Voluntas, 3.2 (1992): 134. 8 Julie Fisher, Nongovernment: NGOs and the Political Development of the Third World,

(West Hartford, CT: Kumarian Press, 1998), p. 5. 9Zhonghua renmin gongheguo guowuyuan (the State Council of the People’s Republic of

China), ‘‘Shehui tuanti dengji guanli tiaoli’’ (the regulations of registrations of social organizations), People’s Daily. Oct. 26, 1998. p. 3. 10Zhonghua renmin gongheguo guowuyuan (the State Council of the People’s Republic of

China), ‘‘Minban feiqiye danwei dengji guanli zhanxing tiaoli (the temporary regulations of nongovernmental and non-commercial enterprises. People’s Daily. Oct. 26, 1998. 3.

CHART 2: ANATOMY OF THE NONPROFIT SECTOR6

3. DEFINING NGOS AND CIVIL SOCIETY IN CHINA

The term ‘‘NGO’’ is widely used to refer to various types of organizations outside

of State systems, including advocacy organizations, nonprofit service-providing institutions, religious groups and social welfare organizations. Lester Salamon and

Helmut K. Anheier, two leading authorities on international NGOs, list the key features of NGOs as follows: they are formal, private, non-profit-distributing, self-governing, and voluntary.7 This set of characteristics includes the most important and

generally recognized features that distinguish the private nonprofit sector from the

governmental and the for-profit private sectors. Within different cultures and political systems, the meaning of the term ‘‘NGO’’ varies. In Western Europe, for example, an NGO often refers to a nonprofit advocacy or service organization that is

active internationally. In East European countries and republics of the former

Soviet Union, NGO tends to designate all charitable and nonprofit organizations.8

What are the nongovernment and nonprofit organizations in China today, and

how does the Chinese government define them? This question is the very first step

toward our understanding of Chinese NGOs, and two major aspects need to be clarified. As the next section will further explain, according to the 1998 official regulatory documents of the NGOs, the Chinese government classifies all institutions

into two general categories: social organizations and nongovernmental and noncommercial enterprises (NGNCE). In ‘‘The regulations of registrations of social organizations’’(1998), the government offered a definition of social organizations. ‘‘Social

organizations,’’ it states, ‘‘are nonprofit organizations that are voluntarily founded

by Chinese citizens for their common will and operated according to their charters.’’ 9 Another official document in the same year announced that, ‘‘nongovernmental and noncommercial enterprises are social entities engaging in nonprofit

social service activities, and they are founded by for-profit or nonprofit enterprises,

social organizations, other social forces or individual citizens, using non state-owned

property or funds.’’ 10

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11Private interviews with a former director of the Division of Social Organizations at MOCA,

Beijing, 1996. 12Private interview with the vice director of the Division of Social Organizations at the

MOCA, Beijing, 1996. 13Gordon White, Jude Howell, & Shang Xiaoyang, In Search of Civil Society: Market Reform

and Social Change in Contemporary China. (Oxford: Clarendon Press, 1996), pp. 3–4. 14Deng Zhenglai and Jing Yuejin, ‘‘Jiangou Zhongguo de shimin shehui’’ (build a Chinese civil

society), in Deng Zhenglai, Guojia yu shehui (the state and society) (Chengdu, China: Sichuan

People’s Publishing House, 1997), pp. 1–22.

Comparing the Western and Chinese NGO definitions, the most obvious distinction is that the Chinese official definition of NGOs does not mention self-governance, a key criteria of Western nongovernmental organizations. Still, we should give

the Chinese government credit in their effort to catch up with the international

standard in their governance of NGOs. First of all, for a long time, the government

did not know what the definition of social organizations should be. Thus, instead

of giving a clear definition, the 1989 official regulation only listed all types of associations and institutions that the government recognized as ‘‘social organizations.’’ 11

The 1998 documents, for the first time, provided not only a clear description of the

meaning of ‘‘social organizations,’’ but also created a new legal status—NGNCEs—

for private service providers. Second, even though the Chinese official definition of

NGOs did not include self-governance, the Ministry of Civil Affairs (MOCA), since

the 1990s, has been pushing the ‘‘three selves of polity’’: financially self-sufficient,

self-governing, and self-recruiting (sanzi zhengce).12 Yet, one must recognize the gap

between ‘‘talking the talking’’ and ‘‘walking the walking.’’ As mentioned earlier, how

much autonomy Chinese NGOs enjoy is still the most controversial issue.

In the time span of several hundred years, many philosophers and thinkers have

left their marks on civil society, and the debates continues today over the definition,

meaning and function of civil society. The conceptual evolution of civil society in the

West has left a great profusion of interpretations and models. This concept today

is used, in a simplified form, to indicate people’s expression of their opinions and

interests, usually via civic associations, and the mechanisms that enable them to

participate or influence policymaking. In their study of Chinese civil society, Gordon

White, Jude Howell, and Shang Xiaoyang define civil society in general as

An intermediate associational realm situated between the State on the one

side and the basic building blocks of society on the other (individuals, families,

and firms), populated by social organizations which are separate, and enjoy

some degree of autonomy from, the state and are formed voluntarily by members of society to protect or extend their interests or values. . . . The political

conception, which derives mostly from the Anglo-American liberal tradition of

political theory, equates ‘civil society’ with ‘political society’ in the sense of a

particular set of institutionalized relationships between State and society based

on the principles of citizenship, civil rights, representation, and the rule of

law.13

Contrastingly, Deng Zhenglai and Jing Yuejin, two leading Chinese scholars of

civil society, describe a Chinese civil society as ‘‘a private sphere where members

of society engage in economic and social activities voluntarily and autonomously, according to the rule of contract. It is also a nongovernmental public sphere where

people participate political and governing activities.’’ 14 The concept of civil society

in the West has a long history of representing democracy and the confrontation or

even antagonism between the State and society. However, it is widely agreed among

Chinese scholars who participated in debates during the 1990s on building a Chinese civil society that the relationship between the State and (civil) society in China

should be constructively and mutually interactive.

4. CHINESE EQUIVALENTS OF NONGOVERNMENTAL ORGANIZATION

Table: Chinese Terminology of NGOs

English Term Chinese Term Examples of Organizations

Social Organizations ................................. Shehui tuanti ... A general term for member-serving associations and foundations.

People’s Organizations* (19 at the national level).Renmin tuanti .. ‘‘The eight big organizations,’’ such as: All China Federation

of Trade Unions, Chinese People’s Friendship Association,

All-China Federation of Returned Overseas Chinese.

Mass organizations* ................................. Qunzhong zuzhi All-China Federation of Trade Unions, Chinese Communist

Youth League, All-China Women’s Federation.

33

15The eight organizations are All-China Federation of Trade Unions, the China Communist

Youth League, All-China Women’s Federation, China Federation of Literature and Art, China

Association of Science and Technology, China Writers Association, China Law Association, and

All-China Journalists Association. The first three organizations were established during the revolution period and have been the most loyal to the CCP ever since; others were also close to

the CCP before 1949. 16The people’s organizations and mass organizations are under the direct management of the

Central Committee of the Chinese Communist Party. Currently, there are 19 of them. See,

ZJBWB. 17 ‘‘The Temporary Regulation of Registration of Social Organizations’’ (1950) clearly classified

these organizations as people’s organizations.

Table: Chinese Terminology of NGOs—Continued

English Term Chinese Term Examples of Organizations

Folk Organizations ..................................... Minjian zuzhi .... All-China General Chamber of Industry and Commerce,

China international Chambers of Commerce.

Nongovernmental Organization (NGOs) ..... Fei zhengfu

zuzhi.

Usually referred to as foreign NGOs, but some Chinese NGOs

adopt this term.

Nonprofit Organization (NPOs) .................. Fei yingli zuzhi New term for Chinese SOs and NGNCEs.

Shehui tuanti or shetuan (social organization) is the most commonly adopted term

for organizations outside the state. In classical Chinese, ‘‘she,’’ ‘‘hui,’’ and ‘‘tuan’’ all

mean associations or groups. The term ‘‘social organization’’ predated the establishment of the PRC, and some scholars believe that the earliest forms of Chinese social

organizations can be traced back to the Spring-Autumn period (770–476 B.C.). However, the term refers primarily to modern forms of private associations that first appeared at the beginning of the 20th century. Since 1949, the PRC government has

continued to use this term, and three of its regulatory documents on this subject

(1950, 1989 and 1998) all use the term shehui tuanti for entities that outside the

State system.

Whereas ‘‘social organization’’ is adopted by the government as a general term for

organizations outside of the state, the remaining four terms are also used officially,

but more specifically. Renmin tuanti (people’s organizations) appeared in the 1954

and 1982 Constitutions and other government documents. Though Qunzhong zuzhi

(mass organizations) has never been used in any legal or official regulatory documents, it has been used officially on many occasions. Only a small number of prominent organizations have ever been classified as either ‘‘people’s organizations’’ or ‘‘mass organizations.’’ The so-called ‘‘eight big organizations’’ (ba da tuanti) are all

people’s organizations, and some of them are also mass organizations.15 The two

terms are not exclusive, and the Chinese Communist Party (CCP) uses them according to its political agenda. The All-China Federation of Trade Unions (ACFTU), the

Chinese Communist Youth League (CCYL) and the All-China Women’s Federation

(ACWF) are mass organizations in structure, but they are also referred to as people’s organizations to indicate their prestigious status. These two types of organizations, although are also categorized as social organizations, do not register with

MOCA, nor are they under MOCA’s supervision.16

The questions here are: what are the meanings of these two terms? Why are they

still in use today? Why do we need to know about those two types of organizations?

Chiefly because they help us understand the way the Chinese government employs

social organizations as tools of political struggles. The people’s organizations and

mass organizations have significant political implications and historical backgrounds, although no official documents have ever defined them. One must turn to

China’s contemporary history and the CCP’s political vocabulary. The term ‘‘people’s organization’’ was created by the Nationalist Party (Guomindang) in the 1920s and

is still used in Taiwan today. After 1949, the PRC government accepted the term,

but employed it, especially in the early period of the PRC, to refer to organizations

that participated in the First Chinese People’s Political Consultative Conference

(CPPCC) in September 1949, a month before the establishment of the PRC.17 In

fact, the CCP organized quite a few organizations around that time to unify various

political forces joining the revolutionary cause. They have been China’s most influential organizations ever since, and are the backbone of the United Front

represented by the CPPCC.

In contemporary CCP political vocabulary, the word ‘‘people’’ is the opposite of the

word ‘‘enemy’’ or ‘‘CCP’s enemy,’’ and its meaning changes from one political period

to another, depending on the specific targets of the revolution. For instance, during

the anti-Japanese War (1937–45), the landlord class was included in the category

of ‘‘people,’’ while during the land reform movement (late-1940s to early-1950s), they

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18 ‘‘The 1950 Regulations’’ particularly stated that all people’s organizations did not need to

register with the government. This practice has continued even though the new regulatory document (1989) has no such item. 19 Alan Liu, Mass Politics in the People’s Republic: State and Society in Contemporary China,

(Boulder, CO: Westview Press), p. 91. 20Wang Yongxi, ed., Zhongguo gonghui shi (A history of the Chinese Trade Unions) (Beijing:

Publishing House of History of Chinese Communist Party, 1992), pp. 345–379.

shifted to ‘‘enemy.’’ Shortly before the establishment of the PRC, Mao Zedong published an important article, ‘‘The Dictatorship of the People’s Democracy’’ (1949). ‘‘Who are the ‘people?’ ’’ Mao asked. ‘‘At the present stage in China, they are the

working class, the peasant class, the petty bourgeoisie, and national bourgeoisie.

Under the leadership of the working class and the Communist Party, these classes

united together to form their own State and elect their own government [so as to]

carry out a dictatorship over the lackeys of imperialism—the landlord class, the bureaucratic capitalist class, and the Kuomintang [Guomindang] reactionaries.’’ Mao

continued, ‘‘The democratic system is to be carried out within the ranks of the people, giving them freedom of speech, assembly, and association.’’ Consequently, the

Chinese (and all organizations as well) are divided into: leading classes, the United

Front (classes that are the CCP’s allies), and the enemy.

The CCP wanted to enlist ‘‘people’s organizations’’ in the fight against the

Guomindang, and support from non-CCP organizations helped convince the Nation

that the CCP truly represented the people. As a reward and to ensure future support, the CCP offered many political privileges to the organizations, including exemption from registering with the government.18 Since this term carries substantial

political weight, very few organizations have obtained this title later on. When organizations do use this title, their missions are usually related to the United Front.

For instance, during the early 1950s, the former chambers of commerce and other

merchant and entrepreneurial associations were joined in the All-China Federation

of Industry & Commerce (ACFIC). The ACFIC is a ‘‘people’s organization;’’ its purpose, as stated in its charter, is to strengthen the United Front.

The term ‘‘mass organizations’’ also carries significant political implications. The

word ‘‘qunzhong’’ means ‘‘groups of individuals’’ or ‘‘the majority.’’ But in the CCP’s

political vocabulary, the word conveys several specific meanings. First, it is used to

distinguish people as either non-party members (qunzhong) or CCP members

(dangyuan) and thus directly affects people’s political status and their daily lives.

Whether one is a dangyuan or a qunzhong has significant consequences in matters

such as academic or job opportunities, and in how one is treated politically as well

as socially. Second, in the CCP’s ideology, the masses and the Party are two essential elements in a ‘‘union of contradiction.’’ The CCP recognizes the masses as the

foundation of its rule, the object of its service, and defines its own actions as the

‘‘cause of the masses,’’ ‘‘mass movement,’’ or ‘‘mass struggle.’’ At the same time, the

Party requires the masses to follow its lead as the head of the revolutionary cause.

Accordingly, the political meaning of ‘‘mass organization’’ is twofold. On the one

hand, it indicates the position of mass organizations in the CCP’s political system.

The CCP defines itself as ‘‘the vanguard of the working class’’ and ‘‘the core force

of the mass movement,’’ with mass organizations on the periphery around the Party.

Since the Party represents the people’s interests, these organizations should follow

the Party’s leadership. It does not allow mass organizations to challenge its authority. The political struggle between the ACFTU’s leaders and the CCP during the

1950s over the independence of trade unions set a clear example for other mass organizations on the periphery around the Party. By 1949, Chinese industrial workers

had experienced thirty years of autonomous union actions, so Chinese workers in

major cities understood the meaning of solidarity and unionization. Many unions

were non-Communist organizations. This tradition was the first casualty of the

CCP’s policy toward the mass organizations after 1949.19 Union leaders who made

assertions about the workers’ unique interests and the unions’ independence were

criticized as ‘‘anti-party’’ and ‘‘anti-people,’’ and many were punished severely by the

Party.20

On the other hand, the CCP relies on mass organizations to reach out to different

groups of people; this was true during the revolutionary period and is still the case

today. These organizations provide a bridge between the CCP and the people. Before

1949, many mass organizations were grass-roots organizations fighting directly for

their members’ interests. After 1949, the CCP became the ruling party, and workers

unions, women’s federations and youth leagues became governmental organizations

entirely dependent on and closely controlled by the government. The interests of

their members have been ignored, or, in the CCP’s phraseology, individuals obey the

State and Party’s interests, and their duties switched to that of propagating ComVerDate 11-MAY-2000 12:37 May 28, 2003 Jkt 000000 PO 00000 Frm 00038 Fmt 6601 Sfmt 6621 86861.TXT China1 PsN: China1
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21 In the past two decades, the real value of government funds to these organizations has fallen considerably due to serious inflation. Thus, they are under strong pressure to seek other financial resources. Like all social organizations (except the foundations), these organizations also

are allowed to run for-profit businesses to supplement their incomes. But government funds are

still their major revenue. For example, the Youth League is a fully funded government organization, but the government allows it two for-profit enterprises with 1,150 employees. 22 Interviews with a participant in drawing up a ‘‘social organization law,’’ 1996, Beijing, and

an official in the Bureau of the nongovernmental organizations, MOCA, 2001. 23The original name of the agency was the Division of Social Organizations. It was not just

renamed; the rank of new agency was also escalated from a division (chu) to bureau (ju). 24 Ibid. 25The Chinese names for these organizations were ‘‘fei zongjiao da tongmeng’’ and ‘‘fei jidujiao

tongmeng.’’

munist ideology, assisting the Party, and recruiting CCP supporters. The government has entrusted them with important administrative functions and has accorded

them the privileged status of government agencies.

In short, the term ‘‘people’s organization’’ implies a mission for the United Front,

and the term ‘‘mass organization’’ indicates a close but subordinate relationship

with the Party. From a historical perspective, these classifications reveal the CCP’s notion of non-party organizations and its changing agenda in different periods. Although the conditions of nongovernmental organizations have altered tremendously

since the 1980s, the official policy toward these two types of organizations remains

almost unchanged. In order to downsize, in recent years the government has pushed

previously government-funded organizations to become self-sufficient. However, the

people’s and mass organizations are too important to the CCP’s political power to

grant them independence. Instead, the government continues to furnish them with

financial and personnel support.21 This situation has created a major dilemma for

the government in its effort to apply a uniform regulatory and managerial policy

to all social organizations. This is also an important reason for the reluctance to formulate a clear social organization law (shetuan fa).22

Two other terms for nongovernmental organizations, minjian zuzhi and feizhengfu

zuzhi, too, have their own origins and political connotations. In Chinese, minjian

means ‘‘ As a rather old Chinese term, minjian zuzhi is an antonym of ‘‘governmental organization’’ (guanban or zhengfu zuzhi) and highlights the very nature of

self-organizing. In the early 1950s, nine religious organizations (minjian zongjiao

tuanti) and their branches nationwide were identified as ‘‘anti-revolutionary secret

societies’’ and officially banned. As a conspicuous political event, the dismissal of the

minjian zuzhi sounded a clear signal, and eventually ‘‘minjian zuzhi’’ vanished in

China. From then until the 1980s, this term was only used to refer to foreign nongovernmental organizations that functioned as very important channels between

China and the outside world. Not until the 1990s was the term minjian zuzhi revived. In 1999, the governmental agency in charge of all national NGOs under

MOCA was renamed Minjian Zuzhi Guanliju (literally translated as, the Managing

Bureau of Popular Organizations, though its official name is the Bureau of the Management of NGOs).23

The term fei zhengfu zuzhi is not authentic to the Chinese language but is a

transliteration from English ‘‘nongovernmental organizations.’’ When China hosted

the 1995 Fourth World Women’s Conference (WWC) in Beijing, the Nongovernmental Forum made this term well known to the Chinese. To prepare Chinese women’s organizations to understand the meaning and practice of fei zhengfu zuzhi, the

All-China Women’s Federations launched a campaign to train women leaders at all

levels. Over 8,000 workshops and seminars nationwide trained 1,910,000 women

leaders and activists, most of whom learned the term fei zhengfu zuzhi for the first

time.24 Since then, ‘‘fei zhengfu zuzhi’’ , and later, ‘‘fei yingli zuzhi’’ (nonprofit organizations) have become formal terms in the Chinese political vocabulary.

Foreign NGOs are commonly called fei zhengfu zuzhi; Chinese social organizations, however, are reluctant to call themselves fei zhengfu zuzhi. In Chinese, the

word ‘‘fei’’ means ‘‘not,’’ but also ‘‘wrong’’ or even ‘‘anti.’’ For example, during the

May Fourth Movement (1919), the Chinese name for the ‘‘Great Federation of AntiReligion Movement’’ used fei for ‘‘anti.’’ The same held for the ‘‘Federation of AntiChristianity.’’ 25 Instead of choosing fei zhengfu to indicate their nature, many new

Chinese NGOs prefer to use NPOs (nonprofit organizations.)

5. CONCLUSION

In summary, since the late 1980s, the government has undertaken substantial

measures to improve the legal and political environment for the growth of NGOs

and to strengthen governmental control over them at the same time. The promulgation of a series of regulatory documents since 1998 indeed has provided a much

36

26There are two hundred of these types of organizations nationwide, including 19 national organizations fully funded by the government. Several of them were organized after the 1980s;

the most well known are the Soong Ching Ling Foundation and the China Federation of Handicapped People. See, ZJBWB (1996).

clearer and unified status to most organizations outside of the State system. However, these efforts are not without obstacles and costs. While new organizations are

seeking more autonomy, many well-established social organizations are reluctant to

change. People’s organizations and mass organizations stand to lose political power,

privilege, and security with a fundamental change in the status quo. At present, the

government is rethinking the roles and statuses of these two types of organizations,

which number 200 nationwide.26 However, these political bodies are too important

to the CCP’s power to let them become independent.

The confusion and inconsistency in the classification of social organizations is reflected in the uncertainty of the government’s policy towards NGOs as a whole. This

reveals problems more profound than the clarification of categories or social organizations terminology. The government faces a great challenge in letting organizations

become autonomous in financial and managerial matters and takes the political risk

of losing control entirely. Without a comprehensive and long-term policy, how can

the government define the term ‘‘social organization,’’ change the status quo of the

people’s organizations and mass organizations, or offer Chinese social organizations

the rights that international NGOs enjoy? The future roles of the Chinese organizations remain in doubt.

PREPARED STATEMENT OF KARLA W. SIMON

MARCH 24, 2003

CREATING AN ENABLING LEGAL ENVIRONMENT FOR CHINESE NPOS

An ‘‘enabling legal environment’’ for the non-government, not-for-profit (NPO)

sector—also known as civil society—in any country consists of the following:

• Supportive ‘‘legal framework’’ legislation—the legislation relating to the

establishment, governance, and oversight of NPOs; • Supportive legislation regulating NPO-state relations, allowing partnerships between State entities and NPOs to be established (both with respect to

service provision and policy development); • Supportive tax legislation, permitting various forms of tax relief for NPOs

and their donors, thus creating an environment in which NPOs and the business sector can work together for the good of society; and • Other necessary legislation affecting NPOs and their operations (e.g., fund

raising legislation).

Most developing and transition countries have struggled with the issues involved

in creating such an enabling legal environment, in large part because they are fearful of the consequences of creating a truly independent NPO sector, with economic

resources as well as access to the people by virtue of meeting important social needs

(in other words, possible political access coupled with economic resources). Thus,

China has not been alone in dealing with NPOs out of suspicion and fear.

Yet the Chinese government has been very clever in seeking step-by-step to create

a more open and supportive legal environment for NPOs. Since the late 1980s the

government has had in place policies to encourage certain types of NPOs to come

into being. Although these organizations have at times been affiliated with the Chinese Communist Party (CCP) structures, such as the All China Youth Federation

and the All China Women’s Federation, many of them have also been independent

of the CCP, if not the state. In fact, in the 1980s the government made a clear decision to encourage certain semi-independent organizations to come into being, by

adopting regulations that permit both associations (social organizations) and foundations to be formed, albeit with rather stringent government control and oversight.

The types of organizations that were created in those years (top-down, rather than

bottom-up) include the various foundations for the poor and for struggling communities (such as a Foundation for Underdeveloped Regions, the China Charity Federation, the China Youth Development Foundation) as well as such organizations

as the Amity Foundation, a Chinese Christian organizations that supports rural development, one of the few organizations that can claim a sort of independence from

the state. These various foundations and federations were perceived from the outset

as a means to attract donations from overseas as well as PRC-based Chinese to help

the State implement programs it perceived to be necessary; for example, to raise

37

1Falun Gong scared the Chinese government—it is a non-government organization that operates outside the normal regulatory structure. Thus, government attitudes toward Falun Gong

briefly affected thinking about how government should deal with NPOs and civil society more

generally.

funds to help victims of the Yangtze floods (China Charity Federation) or to develop

resources to support school children in poor communities (Project Hope of the China

Youth Development Foundation). While not true NPOs or civil society organizations

because of their linkage to the State and their top-down creation, many staff members who work for these entities nonetheless have become powerful spokespersons

for the creation of more independent entities, which might grow away from state

control.

Most recently the government has begun to experiment with regulations that permit more autonomy for NPOs. While the 1998 regulations on associations (social organizations) and non-state, non-commercial institutions have continued the dual

oversight structure present in the 1980’s regulations, they at the same time show

that the government and the CPC are beginning to be aware of the need to free

such organizations from overly stringent types of controls. The 1998 association regulations permit, for example, 50 citizens to come together to form an association—

something that was never allowed in the past, when top-down creation of organizations was the norm. In addition, more has been made about ‘‘self-management’’ by

NPOs, something that received little emphasis in the past. And, perhaps most significant in terms of the evolution in government/CPC thinking, recent discussions

of possible new foundation regulations suggest that the state and the CPC are moving in the direction of freeing such entities from invasive government oversight by

recognizing more Western forms of fiduciary responsibility.

A further sign that the government has an interest in a more enabling legal

framework for NPOs can be seen in the adoption of laws that allow better tax incentives for charitable giving. This goes hand-in-hand with the awareness that China’s

increasing private wealth (made possible under Deng Xiaoping Theory) should be

better harnessed to contribute to social and economic development. At present, the

Donations Law and the Income Tax Law permit deductions of up to 30 percent of

net income for individual entrepreneurs and up to 3 percent for corporate donors—

both domestic and China-based foreign donors. More recently, members of the 10th

National Committee of the Chinese People’s Political Consultative Congress

(CPPCC), were quoted in China Daily as being in favor of more broadly based incentives for charitable giving. In addition, the government is aware that it must create

more a more appropriate tax exemption regime for NPOs.

There is also more openness to input from other countries about the way in which

the legal system can be more enabling for NPOs; this is true despite the ‘‘Falun

Gong setback’’ in 1999.1 In 2003–2004 the government will have organized or participated in four conferences or workshops to discuss various aspects of NPO regulation and governance (two in fall 2003 and two in spring 2004), and the International

Society for Third Sector Research (ISTR) plans to hold its Asia Region meeting in

Beijing in October 2004. After publicly opening up to foreign technical assistance in

this area in 1999 at Asia Foundation and Ford Foundation/UNDP sponsored conferences (there had been a great deal of pre-1999 technical assistance, but it was

never discussed in public fora), the government seems to have become increasingly

aware of the need to develop a legal framework that will give more freedom to

NPOs. In fact the two events held in the latter half of 2003 were paid for solely

with government funds and involved significant non-Chinese participation.

What this all will lead to is not clear. It may all be ‘‘eye-wash,’’ but I doubt it.

The government knows full well that it must relinquish controls and create more

independent civil society partners if it is going to survive. The social and economic

problems China currently faces cannot be solved by government alone—but how fast

or slowly the changes occur will depend on many factors that have nothing at all

to do with technical legal reform efforts. Nevertheless legal reform is necessary, because without it many organizations will remain in a legal twilight, described in a

recent US Embassy-Beijing briefing paper—to avoid the strictures surrounding registration and oversight as an NPO (association, social organization) many register

as ‘‘corporations’’ under current law. While this has been tolerated for organizations

that are not particularly sensitive from a political standpoint, such organizations

are still subject to corporate tax and may face other difficulties.

Recent developments suggest that the government has become aware that legislation is needed, not just regulations, which have a more temporary character and are

not tied into the proposed new Civil Code. But the underlying theoretical issues remain: how should the legal reforms take account of increasingly troublesome social

38

and economic realities; how should they reflect the need to modernize Chinese society, to make it more fully participatory? Certain objectives are clear:

1. The State should move away from overt ‘‘control’’ of NPOs and their activities and toward membership and fiduciary governance structures, with

continuing government oversight;

2. More mechanisms should be provided within the law for transparency (good

internal reporting, recordkeeping, and accounting rules) buttressed by the development of the governance norms previously mentioned;

3. There should be clearer accountability (not ‘‘control’’) mechanisms—to the

State for funds received and programs implemented; and to the public and

beneficiaries as well, because they should have ultimate oversight of these

issues;

4. There should be more thought given to a clearer tax exemption regime for

NPOs as well as to creating tax incentives for the working population (through

workplace giving) and rationalizing the existing incentives for entrepreneurs

and businesses; and

5. Regulation of fund raising and asset management by NPOs should be

strengthened, so as to protect the public and the non-state assets devoted to its

welfare.

In addition to these crucial aspects of the written law, it is also essential that the

laws (or the current regulations) be applied in a fashion that supports rather than

stifles civil society. Naturally that involves a change in mind-set for many government bureaucrats—principally those in the NGO Bureau of the Ministry of Civil Affairs—but recent experience suggests that such a change is occurring. In the first

place, government personnel from all over China came together in November 2002—

in a public setting for the first time—to discuss the issues I am raising here today.

Second, the government is earnestly seeking to train its personnel so as to engender

more supportive attitudes among them. Younger staff members of the NGO Bureau

of the Ministry of Civil Affairs have attended trainings in the United States and

other countries, which expose them to ways of looking at civil society that are more

open than what they see at home. Third, the new upper echelons of the Ministry,

both in Beijing and the provinces, seem determined to learn about how they can

work more closely with more independent NPOs—they are seeking training and access to more information about how this is accomplished in other countries.

Writing in 1996, one of the chief American scholars on civil society in China, Dr.

Richard Estes of the University of Pennsylvania noted as follows:

Chinese legislative authorities simply have not had sufficient time, nor have

they accumulated sufficient administrative experience, in knowing how to frame

an integrated [set of laws] that effectively deals with the various roles, functions, tax status, accountability procedures, and similar issues [for] a rapidly developing, quasi-independent, social sector.

In the intervening years, administrative practice has become much more developed, and knowledge of the ways in which the laws and oversight of other countries

address NPO legal issues has increased immeasurably. In July 1999, at the Asia

Foundation sponsored conference in Beijing, with government officials (from MOCA

as well as other oversight agencies), legal academics, and NPO leaders in the audience, I suggested that the regulations and regulators view Chinese NPOs as little

children that need to be led by the hand. NPOs, on the other hand, view themselves

at least as teenagers and want to be allowed to do things on their own. It may still

be that the view of NPOs as children—and possibly unruly children at that—remains. But my sense is that the government is slowly coming to the realization that

the NPO sector is in fact growing up. And it is my hope that the next few years

will be ones in which the essential issues—both of the law and of its application—

are addressed so that the legal environment for China’s civil society can become

truly enabling.

PREPARED STATEMENT OF NANCY YUAN

MARCH 24, 2003

BACKGROUND

China has become Asia’s fastest rising economic power. Two decades of economic

liberalization and now entry into the WTO, have resulted in improved economic indicators, a growing trend toward legal reform, and an expanding influence throughout Asia. Economic growth and reform has also had a significant impact on China’s

39

domestic social and political development, creating more opportunity and prosperity,

but at the same time, daunting challenges.

Large scale unemployment as a result of State owned enterprise reform, and rural

unrest among farmers as a result of falling prices and rising corruption by local

officials, has led to well publicized demonstrations in some parts of China. Without

adequate social safety nets, unemployed workers are left without basic health care,

education or housing, all formerly provided by their employer. Income disparity has

widened sharply between China’s coastal areas and the western provinces, accentuating the gap between the rich and the poor. The official estimate shows that between 1990 and the end of 1999, household income of the wealthiest 20 percent in

China increased 4.2 times more than that of the lowest 20 percent. Other problems

include environmental degradation and pollution, public health issues such as HIV/

AIDS, and corruption among officials.

While there are some signs of democratic progress, albeit small, in the election

of village committees, experiments with township elections and even public hearings

in provincial and municipal legislatures in selected areas, fundamental political reform is not truly on the table. It is true however, that while economic progress has

not necessarily led to more democracy per se, there is a developing rights consciousness among Chinese citizens, and a better awareness among government officials

that they must be more responsive to the rights and material needs of the people.

While circumstances vary across China, given the size of the country and the differences between regions, it is clear that the government must address these problems, or risk instability and chaos.

CURRENT STATE OF CHINA’S NGOS

One of the most significant developments in China over the past two decades has

been the emergence of civil society organizations. In 1949, when the Chinese Communist Party came to power, all independent civil society groups were eliminated,

and all remaining social organizations were brought under the Party’s control. China’s rapid economic reforms have led to a fundamental change in the relationship

between the party and the state. The population is weary of ideological campaigns,

and there is an increasing gap between the party and the functions of state, as well

as between the State and the general population. China’s modernization and economic liberalization combined with a growing, more educated middle class, and serious income disparity between the coastal and interior provinces, have led to citizen

demands for more services, less corruption and more accountability in government.

As such, China has gradually moved toward a more pluralistic society, with increased decentralization of authority and services managed by lower levels of government, and recognition of the rule of law, including the rights of the individual

to protection under the law. These developments have left space for other actors,

thus laying the basis and need for civil society organizations.

There are many reasons why the Chinese government has come to see some benefit in the development of a civil society sector in China. As Nick Young, editor of

China Development Brief, notes in an August 2001 special report on China’s NGOs,

‘‘government faces a daunting mix of service gaps, increased demand and fiscal constraints.’’ The CCP places the highest priority on national cohesion and stability,

and while still nervous about the unharnessed power of civil society, it has still

come to the conclusion that civil society organizations can contribute toward this

goal.

There are many types of nongovernment organizations (NGOs), with few completely independent or structured under laws as defined in Western countries.

Progress in legal regulation of NGOs in China has been uneven and the application

and enforcement are often guided by political imperatives, such as the restrictive

rules that were passed post-Tiananmen in 1990, and most recently, enforcement of

more restrictive regulations because of concerns over the Falun Gong. Donors engaged in development efforts in China tend to look for NGOs that are independent

of government, representative of their constituents and participatory in their decision making as qualifications for partnership. While these concerns are pertinent to

China’s situation, no single definition is sufficient in characterizing the current

State of China’s NGOs. Chinese NGOs cannot yet be defined as an ‘‘independent

sector,’’ but should be seen in the broader socio-economic development perspective

of China’s changing social and political dynamics.

Under Chinese law, laws and regulations exist to govern application and registration processes, and guide the scope of activities of NGOs. These require NGOs to

register with the Ministry of Civil Affairs or its provincial or municipal affiliate.

This supervisory role of government over NGOs encourages a close link to government. However, because of the lack of enforcement and underdevelopment of the

40

legal system, some NGOs have bypassed this rule and instead registered with the

Bureau of Industry and Commerce as enterprises, so they do not fall under the

same reporting rules or supervisory standards. Today, in Beijing alone, there are

dozens of NGOs that have registered as for-profit commercial entities or claim to

be second tier organizations under a government agency. These groups are playing

an increasingly important function, which is sometimes different from those organizations involved in humanitarian activities. These include groups such as the China

Non-Profit Organization (NPO) Network, which acts as an umbrella group that

serves the nongovernmental sector; environmental groups such as Global Village

Beijing which raises awareness of environmental issues; or Rural Women Knowing

All, affiliated with Rural Women Knowing All Magazine and Rural Women’s Training School, which provides education for rural women in both economic subjects and

legal education.

Over the last decade, there has been a transformation of traditional mass based

government sponsored organizations, such as the All China Youth Federation and

All China Women’s Federation, from party instruments to organizations that increasingly represent the interests of their constituents. In addition, the space created by the economic reforms of the 1980s allowed the development of more players.

While these organizations have traditionally had an affiliation with government in

order to operate, and despite the fact that they must register with the government

agency, many have become more independent, both in program and funding, and are

more active in representing the needs and interests of their constituents through

active programs that address issues of their local communities. Even the largest national organizations, such as the China Charity Federation and Poverty Reduction

Foundation have ties to the government. These government organized NGOs

(GONGOs) are becoming more independent in management and fundraising. These

are often supported through local ‘‘donations,’’ indigenous philanthropy through

community, and even overseas Chinese resources. Because of their ability to deliver

services at the local level, there is a growing recognition of their positive role in society. Nongovernmental organizations are seen as filling gaps left by government

budget shortfalls, providing social and other welfare services at local levels, such as

elder care, education, and health care services. On occasion, organizations come together to collaborate, particularly in service delivery to the poor and disadvantaged.

Regardless of the status or affiliation of the organization, nongovernmental groups

nonetheless perform an important, and potentially critical function in the context

of a changing Chinese society.

THE ROLE OF INTERNATIONAL ORGANIZATIONS

The nongovernmental sector in China has evolved quickly. Through technology

and globalization, they have been able to make contacts with many international

NGOs, either those working in the same field, or those looking to provide financial

and technical support. This includes a wide range of donors, private foundations,

private corporations operating in China and other like minded NGOs. China Development Brief concluded that China is receiving well over $100 million each year in

project funding directly from or channeled through over 500 international NGOs and

foundations. Gifts in kind, such as hundreds of thousands of books and equipment,

add substantially to that total. As of 2000, there were at least 700 grant making

foundations, 70 advocacy groups, 200 humanitarian organizations and 150 faith

based charitable groups, all foreign, operating in China.

Over the course of China’s history, international organizations have played a supporting role in the development of social organizations and civil society in China.

After normalization of relations between the U.S. and China in 1979, American

foundations with historical links to China returned to support Chinese institutions.

These included the Rockefeller Foundation, China Medical Board and the Lingnan

Foundation, the Luce Foundation , the Ford Foundation and The Asia Foundation.

Faith based organizations also reestablished relationships, such as the United

Board for Christian Higher Education in Asia, and other church based or denominational organizations, such as the Mennonites and Maryknoll Brothers.

The Asia Foundation began supporting nongovernmental entities over two

decades ago, supporting the development of human resources, program and research

activities and building capacity through grants. This included early grants to social

organizations and NGOs such as Rural Women Knowing All, as well as recent efforts to encourage linkages between NGOs in China. The China NPO Network

conducts a monthly NGO forum with Foundation support, which brings together officials, business and NGO leaders to discuss legislative issues, and to promote collaboration between organizations. Recently, the NPO Network has worked with

other organizations, including foreign NGOs, on understanding standards for NGO

41

self-regulation. The Tsinghua University NPO Center is another organization that

has recently received considerable attention for its research on regulatory issues facing NGOs. The Foundation has provided support for the first international conference on the non-profit sector and development at Tsinghua University in 1999,

as well as their research on professional associations. The Foundation has, with

other organizations, provided input on NGO law and registration issues based upon

its active role in the Asia Pacific Philanthropy Consortium, a regional group which

promotes Asian philanthropic giving and better understanding of legal and regulatory frameworks governing NGOs in Asia.

In addition to international nonprofit groups and foundations, multinational corporations have made major investments in China’s civil society organizations in the

spirit of corporate social responsibility. These include companies such as Nike,

Adidas, Reebok, Levi Strauss, Microsoft, The Ford Motor Company, General Motors,

Microsoft, and the U.S. China Business Council, among others. Companies support

a wide range of activities from health and education programs, to rule of law efforts,

poverty alleviation projects and policy research.

Another role that Chinese NGOs can play relates to cross-straits relations. With

common language, culture and single State systems, organizations in Taiwan and

Mainland China have many similar concerns and have collaborated on activities.

These include research activities on economic development, disaster relief and

humanitarian aid, and exchange programs. The Asia Foundation in Taiwan has

funded several delegations of academics, NGO leaders and legislative officials from

Taiwan to China to discuss issues including NGO legislation, internal governance

and fundraising strategies.

WHAT MORE CAN INTERNATIONAL ORGANIZATIONS AND DONORS DO?

International organizations can continue to play a significant role in strengthening civil society organizations, and building capacity in human resources, organization and program development. China’s economic growth and reform will likely

accelerate in the coming years, leading to increased pressure on government

resources, with more and more responsibility for social welfare devolved to lower

levels of government. Chinese NGOs have taken advantage of the space available

for independent action by providing needed services at local levels, filling gaps in

education, health, eldercare, legal aid and education, and many other areas. Future

support will continue to be necessary for Chinese NGOs to begin to develop the

capacity to sustain their activities, conduct programs that meet the needs of the

population that they serve and eventually, act as advocates for the causes they

represent.

International organizations and donors can also continue to help try to improve

the environment in which NGOs operate, opening up more space and providing

more opportunities for expansion into different fields. This includes support for

changes in the NGO law and the overall registration process, as well as support for

research and networking with like-minded organizations both in and outside of

China. For instance, university centers focused on civil society research and development have proliferated in recent years. All receive international support. These

include Fudan University’s new Social Development and NGO Research Center

(funded by the Himalayan Foundation in Taiwan), three NGO research institutions

at Beijing University, the Research Center for Volunteerism and Welfare (funded by

UNDP), The Non-Profit Law Research Centre (funded by the Ford Foundation and

Oxfam) housed in the Law School, and the Center for Civil Society Studies, housed

in the Institute of Political Development and Governance. Zhongshan University

also has a new Center for the Study of NGOs, housed in the Zhongshan University

Research Institute for Guangdong Development. It is a joint venture with the

Chinese University of Hong Kong.

International support for the development of China’s nongovernmental sector is

important to its future. In addition to a friendly regulatory environment under the

law, other areas require support. The recent scandal related to Project Hope China

has given donors pause. How do donors determine the credibility and financial accountability of Chinese nongovernmental organizations? Donors must be assured

through due diligence that the organizations that they fund are genuine in their

mission and delivery of services while at the same time, Chinese organizations will

have to ensure that funds and programs are managed responsibly. In order for this

to happen, international assistance can, and should, not only support strategic planning and program implementation, but also the operational aspects of nongovernmental organization management in China. Chinese NGOs need training to raise

and account for their funds, commit to transparency in all aspects of operations,

report to donors and comply with international standards. This increased and recogVerDate 11-MAY-2000 12:37 May 28, 2003 Jkt 000000 PO 00000 Frm 00045 Fmt 6601 Sfmt 6621 86861.TXT China1 PsN: China1
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nized role of NGOs creates an opportunity for reform that will improve the environment for NGOs through clearer legal status, more transparency and accountability

in their operations, and progress toward a more meaningful independent sector in

China.

In the category of assistance to China’s NGOs, U.S. Government assistance has

lagged behind other donors. The only American organizations with a resident presence and long track record in supporting civil society organizations have been the

Ford Foundation and The Asia Foundation. There is a marked absence of American

groups working on the ground to develop the capacity of local organizations. Official

American assistance programs for civil society groups in China has been extremely

limited. The European Union, the World Bank, UNDP, Canadian International Development Agency (CIDA) and Australia’s aid program (AusAid) provide levels of

funding from half a million to several million dollars for civil society development

in China. These donors, among others, have made a commitment to support and advance the growth of China’s civil society organizations, not only in the significant

amount of funding they provide, but also in the attention they give to their programs, by setting up small grant funds to be given directly to NGOs (not through

government agencies) and designating specific staff to focus on civil society developments. If the U.S. wants to support the positive trend of NGO development in

China, funds should be provided to knowledgeable groups who can help build the

capacity of Chinese organizations.

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