By Jaylia Yan

JAYLIA YAN dissects China’s new foreign NGO law and its ramifications for Chinese civil society.

A new Chinese law has been universally described by world leaders and media as “draconian.” The White House is “deeply concerned;” Amnesty International states that the law would “further smother civil society.” Activists have proclaimed the law as the harbinger of the end of a more liberal growing civil society, which are the institutions and organizations working in citizens’ interests and behalf outside the government and businesses.

   What is this law? Following months of revision and international censure, Beijing issued legislation governing foreign non-governmental organizations (NGOs), which takes effect at the beginning of 2017. This law looks to regulate foreign NGOs, pulling them from a legal gray area into the purview and scrutiny of China’s Ministry of Security. The law officially defines a foreign NGO and the areas it is allowed to engage in: economics, education, science, culture, health, sports, environmental protection, and disaster and poverty relief. The law ostensibly bequeaths a clear legal status for foreign NGOs, but with a protected legal status comes government oversight on their every move. Under the law, China’s domestic NGOs cannot receive overseas funding, must release information regarding membership, leadership and funding, and deliver public annual work reports. Actions that “endanger China’s national unity” and security, or activities that support and fund religious and political causes are strictly forbidden.

   Beijing has always maintained a delicate relationship with NGOs, domestic and foreign; the government has been wary of grassroots civilian organizations following the 1989 Tiananmen Square demonstrations, so NGOs have only recently begun playing a role in civil society. Since the establishment of the first NGO registered in China, Friends of Nature, in 1994, approximately 500,000 NGOs have registered, and over 1.5 million have operated unofficially. Before the passage of the new foreign NGO law this past spring, experts estimated that the number of registered NGOs would double in upcoming years. Both foreign and domestic NGOs have filled important functions, some of which are even officially designated to them by the government. During the early 2000s, partnerships between an NGO, the Asian Development Bank, and the government were created in the Rural China Poverty Alleviation and Development Program. NGOs were able to access villages previously unreached by federal aid. As Chinese NGO expert Timothy Hildebrandt tells China Hands, NGOs “provide a service that the state needs, and therefore are allowed to exist.”

   Foreign NGOs enjoy more freedoms by working in a legal gray area, and if careful, are allowed to contend with more controversial issues, such as AIDS and other disease treatment and rights advocacy for women, the LGBT population, and workers. According to William Kirby, T. M. Chang Professor of China Studies at Harvard, by working in that gray zone, NGOs were able to flourish and pursue “activities that were neither illegal nor fully sanctioned.” This lack of a working definition for an NGO and the essentially non-enforcement of the few regulations allowed for unforeseen freedoms and risks as NGOs became more ingrained in civil society, garnering considerable influence in the relative vacuum of government interference and positive economic growth.

   In an interview with China Hands, Professor Christopher Hughes of the London School of Economics notes that perhaps Xi Jinping was prompted to call for harsher measures of control and increased internal repression upon his assumption of office in a bid to protect his economic legitimacy amid increasing political strife and decreasing economic growth. Consequently, Chinese officials proposed and amended a draft law which according to Legislative Affairs Commissioner Zhang Yong, would “facilitate the activities of foreign NGOs,” “guarantee the legal rights of foreign NGOs,” and preserve Chinese national security. The governance of the legal gray area can be extremely beneficial—according to Professor Hughes, regulating the NGOs can prevent less scrupulous organizations from taking advantage of the lack of legal restraints. Official NGO status also comes with official benefits— according to Xinhua, NGOs will be able to “enjoy preferential tax policies,” and a clearer legal status. However, Hughes concedes that such regulation is far more reasonable and far less dangerous in a more open society.

   According to Hildebrandt, by isolating domestic NGOs and institutions, the bill may also allow them to become more meaningful and independent “Fear of Western influence is still there and will always be a part of the way international NGOs are perceived,” he added. The law, especially the clauses limiting foreign donations to local NGOs, may serve to limit dependency and allow Chinese organizations to establish capabilities of that of their foreign counterparts.

   NGOs are now scrambling to prepare for the new requirements, effective at the beginning of next year. If found in violation of any provisions of the law, tax exemptions and benefits will be cancelled. Violations two years in a row result in the outright ban of the NGO. NGOs centered on issues outside of the permitted purview fear for continued existence. Even well-established NGOs that have long worked in areas of human rights are concerned. The Ford Foundation, the first international NGO to establish an office in China, primarily functions by funding local NGOs, a process that would now be expressly forbidden under the new law. The Ford Foundation declined a request for comment from China Hands.

   Several NGOs and government organizations have reached out to Timothy Hildebrandt for advice on how to contend with the new law, prompting him to describe the atmosphere of confusion and trepidation. The vague language of the law not only endows the Chinese authorities with tremendous flexibility of enforcement, but also makes it difficult for NGOs to plan for the future other than to enact upcoming “strategic adaptations”. Regardless of an NGO’s focus and its friendliness to the authorities, monumental shifts in how NGOs are run and monitored are inevitable as NGOs transition to a new status quo of control and inquiry.

Social discourse regarding sensitive issues will likely be effectively hushed as the groups and even foreign businesses that facilitated work in these areas depart. Chinese civil society has grown in tandem, though not in equal measure, with Chinese economic success. While new restrictions come on the heels of recent economic and leadership crises—could the threat towards civil society trigger further economic consequences? The extent to which the new law begets the cataclysmic changes predicted by activists is unseen—it wholly depends on how thoroughly the law is enforced. As noted by Hildebrandt, despite the new responsibilities entrusted with the Ministry of Security over foreign NGOs, the Ministry’s funding has not increased—the law may be an unfunded mandate, existing only on paper. Regardless, what is certain is that the Chinese authorities are looking to take control of the NGO sector.

Jaylia Yan is a junior at Arizona State University, currently studying abroad at the London School of Economics and Political Science. Contact her at j.yan7@lse.ac.uk.

Illustration // Zishi Li