New draft law strengthens overseas NGO oversight

A new bill requiring overseas nongovernmental organizations (NGOs) to gain approval from the Chinese government before opening an office or operating programs in China will provide regulators with the legal basis and clear instructions for monitoring the activities of overseas NGOs domestically, said analysts.

The draft bill regulating NGOs based outside the Chinese mainland was submitted to the bi-monthly session of the National People's Congress (NPC) Standing Committee on Monday, reported the Xinhua News Agency.

Overseas NGOs will have to register with and be approved by Chinese authorities if they want to set up representative offices in the mainland or temporarily operate programs on the mainland, said Yang Huanning, vice-minister of public security, while describing the bill to lawmakers.

"The bill aims to regulate the activities of overseas NGOs in China, protect their legal rights and interests, and promote exchanges and cooperation between Chinese and foreigners," Yang said.

"The new law will serve as a platform for mutual understanding for both regulators and overseas NGOs, allowing regulators such as the Ministry of Civil Affairs (MCA) to know how and what they should regulate," Yang Xiaojun, a law professor with the Chinese Academy of Governance, told the Global Times.

Sources of funding are one aspect Yang pointed out that the new bill will address, as he expects the new bill will provide a legal basis for regulators to investigate the source of overseas NGO funding, so as to prevent the organizations from being used for illegal activities such as money laundering.

Both Yang and a representative from an educational NGO that has registered in both the US and Guangdong Province told the Global Times that the new bill will help to ensure consistency and standard practice in application procedures across China.

There are no official statistics on overseas NGOs in China. According to a report released in May by the Chinese Social Sciences Today (CSST), a newspaper sponsored by Chinese Academy of Social Sciences (CASS), there are currently around 1,000 overseas NGOs operating in China. That number could reach 4,000 to 6,000 when NGOs conducting short-term projects are included.

The report went on to say that inbound capital flows associated with these overseas NGOs could reach several hundreds of millions of US dollars, across fields such as poverty alleviation, environmental protection, hygiene and education.

China currently lacks laws regulating overseas NGOs, Deng Guosheng, director of the NGO Research Center at Tsinghua University, told the Global Times, saying, "the new law will help to provide the NGOs with legitimacy in fund-raising and running projects."

The Regulation on Foundation Administration was adopted in 2004, said Deng, but it does not effectively regulate NGOs, as not all of them are foundations.

"China has seen increasing numbers of overseas NGOs coming to China along with the country's reform and opening-up policy, bringing in capital, technology and management experience that has been conducive to China's development," said Deng.

But Deng also pointed out that some came with political agendas that have harmed China by inciting mass incidents or conducting illegal activities such as fraud.

The city of Guangzhou has passed a regulation stipulating that overseas NGOs which accept funding and donations from abroad should report the transfer to regulators 15 days prior to its completion. The original draft, which was released last October, suggested organizations that are mainly funded or have close links with foreign organizations will be banned.

Hu Qingyun contributed to this story