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How Should Global Stakeholders Respond to China’s New NGO Management Law?

A ChinaFile Conversation

Last week, China passed a new law that gives broad powers to China’s police in regulating and surveilling the activities of foreign NGOs in China. The law would require foreign groups including foundations, charities, advocacy organizations, and academic exchange programs to register with the Public Security Bureau, as well as submit to a host of provisions regulating the groups’ finances, hiring practices, and activities. How should stakeholders around the world respond to the law? — The Editors

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NGOs operating in China need to make a sober assessment of their transformed legal environment and should refrain from any wishful thinking: If the NGO law is enforced in a strict way, it will disrupt and reorient a large part of the transnational societal cooperation with China that has been built up since the 1980s. NGOs must absorb the unpleasant fact that many activities related to legal aid or civic participation will have to be terminated in the near future.

  1. For the time being, however, NGOs active in China should seek to reframe projects wherever possible rather than to preemptively eliminate all seemingly risky projects (i.e., those projects that could be classified as harming national interests or security by the Chinese government). NGOs should scrutinize available official documents that may help to identify those areas of activity (such as poverty reduction, education, etc.) that are explicitly welcome and submit projects in these areas. In order to pre-empt charges of foreign or Western “infiltration,” NGOs should prove that they evidently seek to broaden people-to-people ties and social innovations, thereby bolstering the Chinese government’s efforts to foster homegrown NGOs.
  2. NGOs and foundations should proactively seek dialogue with Chinese governmental and nongovernmental actors to build trust and thereby try to moderate a potentially harsh enforcement of the law. Such active communication must include the Ministry of Public Security (MPS), which will likely open more channels for consultation with foreign NGOs. NGOs that were previously invited by the MPS to participate in discussions should take the lead in starting a dialogue with the MPS. The Chinese government, however, is not a monolith. NGOs should therefore work with other ministries and local governments that benefit from their work to ensure that different actors within the Chinese government have a concrete interest in their continued presence and their activities in China. Rather than wait until lists of permitted areas and Chinese partners are published, they should seek clarification and try to comment on pending implementation measures. Importantly, they should do so during the period before January 1, 2017, when the law officially takes effect.
  3. So as to protect their internal integrity and external credibility, NGOs and foundations need to define “red lines” to determine under which conditions it will no longer be worthwhile for them to operate in China. If these “red lines” are crossed by administrative curtailments of their activities, NGOs need to be willing to suspend or significantly reduce their activities, at least temporarily. NGOs could define “red lines” either individually or in cooperation with other NGOs that fall within the same area of activities. One “red line” should be the ability to safeguard the security of NGO employees and Chinese partners. NGOs with offices in China whose “red lines” may be infringed upon should clarify in advance of possible frictions over their activities what their legal options are for temporarily halting their activities in China without losing their registration.
  4. Part of the NGO law’s agenda is to “divide and control.” NGOs need to work against this. They should coordinate their responses to the new law and to future implementation through regular consultation meetings amongst NGOs that are operating in China. These consultation meetings should enlist the support of their respective national governments to strengthen preparedness for consular protection or even for a joint diplomatic response whenever “red lines” are crossed. When an NGO’s lawful activities are infringed upon, there needs to be an immediate, preferably concerted and multinational, non-governmental, as well as diplomatic response.

The Party’s goal in moving forward with the Foreign NGO Law is clear: to increase its control over which domestic entities get funding (as well as other forms of international support), and for what. The move is very much of a piece with Xi Jinping’s overall governing strategy, a core component of which is to reassert Party control over key elements of Chinese society, including the media, the Internet, universities, and cultural producers.

Given the very strict registration and approval requirements in the law, it seems clear that the Party wants to shape the long-term growth trajectory of Chinese civil society, to ensure that most of the cooperation with international groups happens through Party-approved—or even Party-controlled—entities. If the small number of more independent groups that have emerged over the past few years, most of which are funded by international donors, have to close their doors for lack of funds after the law takes effect, no doubt the Party would see that as an added benefit. One can guess that the Party wants to see the emergence of a more compliant, effective, and service-oriented civil society sector, and wants to ensure that rights-based advocacy groups that will represent key constituencies to push for change remain few and far between.

I would argue that this approach is, on balance, not in the Party’s own best interests. Over the past few years, the Party has experienced a crisis of governance. On issue after issue, local and even national officials have been unable to solve key problems of environmental protection, food safety, and workers’ rights, among other issues. Civil society groups that are truly grounded in their own communities, and that possess deep technical expertise, can actually work in partnership with governments to address these problems. True, for government officials, engaging with civil society groups means ceding some level of authority, but the benefits often outweigh the costs.

Effective cooperation with NGOs can bring another key benefit: political legitimacy. The Party is clearly worried that it will lose face if the Chinese public sees NGOs doing constructive things that could be done by the Party itself. And yet, local governments across China could improve their public image merely by signaling their willingness to listen to civil society voices, and, when appropriate, to respond positively to their suggestions. For a governing Party forced to pivot away from legitimacy based on economic growth, the political benefit of constructive dialogue with civil society should not be dismissed lightly.

What should international donors do? One key concern should be finding ways to support the development of human capital in the grassroots civil society sector. I have met with scores of young Chinese NGO activists over the years: all of them have impressed me with their intelligence, their commitment to advancing their cause, and, yes, their bravery in pursuing work that may get them into trouble with the Chinese government. Regardless of what happens to Chinese civil society organizations in the years to come, I have no doubt that those men and women will continue to find ways to fight for what they believe in: a more open, just, and rights-respecting China.

International donors and other partners should not give up on the next generation of activists. Instead, we should look for new ways to support Chinese civil society activists and leaders in ways that do not run afoul of the new Law. One concrete example: international donors should take a hard look at regional and international training programs, scholarships, fellowships, and other forms of individual support. Such programs, targeting grassroots civil society activists, could help young activists build the skills they need, while at the same time helping them to forge connections with activists from other countries working on similar issues.

At the end of the day, there are no easy answers. The Foreign NGO Law presents real challenges to all international groups working in China. But the solution cannot be to pivot away from grassroots civil society groups, or away from China altogether. Instead, international groups need to redouble their efforts and find new ways to engage.

I would like to add a few words about the importance of knowing your red lines going in, and always planning for the real possibility of leaving. I do think that foreign NGOs need to think closely about whether they are continuing their operations because they are advancing the cause of, as Mark Tushnet says, “the party of humanity,” or because of inertia and sunk costs. Open-ended missions and financial commitments leave foreign NGOs and educational institutions (whose exemptions remains uncertain) very vulnerable.

The foreign NGO I worked for in China had a very clear and narrow remit going in, to help China provide antiretroviral treatment to people living with HIV/AIDS, and we told our partners from the outset that our goal was to ultimately leave operations in their hands. So it was relatively easier for us to gauge the point at which we could wind down or halt our work. The calculus was clearer on the question of whether our cooperation with the Chinese government was an overall positive contribution, or whether we were hitting an inflection point. While I won’t speak for others with whom I worked, I personally felt the pull from time to time to broaden or diversify our portfolio and thereby extend the “influence” or “longevity” of our presence in China. We were garnering outside funding by virtue of being there, and we had staff whom we didn’t want to leave unemployed and domestic partners whom we didn’t wish to abandon. I remember worrying it might signify failure if we decided to leave. Of course, we all witnessed Google (though clearly not an NGO) leave China and realized that in their circumstances, leaving could signify strength instead.

I have been doing work relating to South Africa recently, and while the situations are not the same, I remain struck by the lasting legacy of the decisions universities and others made to divest during the 1980’s. But when I was on the ground in China 10 years ago, even before the current swing toward greater restriction of civil society, I found these decisions difficult to make honestly. Only looking back now do I see some calls I’m proud of, and some I’m not so proud of.

Let’s look at the Foreign NGO Law in both an historical and a contemporary context. The control of foreign activities within China has been—to one degree or another—a goal of every modern government since the late Qing. In the late 19th and early 20th centuries, foreign educational and religious endeavors established modern schools, universities, hospitals, and churches, as well as what we would now call NGOs. The YMCA hotel in downtown Shanghai is enduring, red-brick evidence of that movement. In higher education, the intellectual and architectural foundations of every leading Chinese university are international in origin.

Government efforts to regularize, control, supervise such activities began in earnest in the Nationalist period. The education reforms of 1932 led not only to greater Party (then, Guomindang) control over state-led universities, but also to the registration and restriction of the autonomy of private and internationally-funded institutions. These efforts were taken much further in postwar Nationalist China after the end of extraterritoriality.

Under the People’s Republic, the space for international educational and philanthropic efforts was limited initially to those of the socialist ‘brother countries,’ and even these were highly circumscribed before they ended altogether in the 1960s.

Indeed the big exception to the rule of strong Chinese government oversight of international ‘NGOs’ is the comparatively unrestricted flourishing of them in the 1990s and 2000s. They thrived—like many private Chinese businesses—in a regulatory grey zone, pursuing activities that were neither illegal nor fully sanctioned, and mostly without formal registration with government.

With the passage of the PRC’s new Law on the Management of Domestic Activities of Foreign Non-Governmental Organizations, the Empire has struck back. Although its formal purpose is to “standardize and guide the activities of overseas NGOs on the Chinese mainland, to safeguard their legal rights and to promote exchange and cooperation” (Article 1) its intent is also to control and limit the scope of their activities. The Public Security Bureau will monitor the locations, operations, and finances of external “non-governmental social organizations such as foundations, social organizations, and think tanks” (including those from Hong Kong, Macau, and Taiwan).

Although overseas “schools, hospitals, and…academic organizations” are covered under different laws, the law notes that they too have the same legal liability as NGOs to “not endanger the unity of China, its security…or national interests.”

If—as in the Nationalist period—we are witnessing a partial closing of the (official) Chinese mind to external social and intellectual influences, there is a difference today. In the first half of the 20th century many Chinese leaders and intellectuals still had a deep education in both the Confucian canon and modern Western thought. Today, although there is rhetorical harkening back to Chinese tradition, there is little serious knowledge of it in elite circles. And in China’s current, insular leadership, there is even less knowledge of the West. In a still-globalizing world, the limiting of external intellectual and social stimuli that the law seeks to enforce may come at considerable cost to China.

It is time for NGOs in China to fight back. NGOs have been too polite in how they operate in China and have by and large played by the rules. Now that the rules are changing yet again, NGOs lament their future ability to continue their important work. Instead, NGOs should take whatever necessary steps they can to operate outside of this new law. If they do not react quickly then the money that is flowing to civil society organizations inside China will dry up.

Foreign and domestic NGOs should immediately establish secure channels of communication that work regardless of censorship. They should work together to create financial structures and agreements that will allow domestic organizations to continue to receive funding without the knowledge of the authorities. Operational and personal security training for local Chinese civil society actors should be provided immediately and efforts should be made to "train the trainers" so this knowledge can filter down to as many groups as possible. All organizations should continue their above-the-line work in China and work with the authorities where appropriate. But they also should keep the rest of their work as silent as possible.

If NGOs decide to wait for bilateral negotiations or a change in the sentiment of government officials for an improvement in the current situation, the authorities will have won and it will take decades to restore the gains that civil society have already made in China.

The Non-Mainland NGO Management Law is a national security legislation. It emerged in the context of establishment and development of what I call the “national security framework” comprising ideological, institutional and bureaucratic dimensions over the past three years. The law signals a fundamental change in China’s regulation of overseas NGOs to a national security-focused model. The paradigmatic shift will alter almost every essential dimension of China’s relations to the outside world, even if existing commentary has been primarily focused on implications for civil society in China. The Chinese government has just joined other authoritarians such as Russia, Bolivia, Azerbaijan, Pakistan, Sudan, Venezuela, and Egypt in discouraging foreign NGOs’ presence and activity.

To be or not be in China; that is the question, especially for foreign stakeholders from liberal democracies. It could be suggested that the new law would disincentivize non-Mainland nonprofits from promoting meaningful programs in China. However, I would not be convinced that China’s civil society would be severely impaired because of a possible sharp decrease in foreign funding or other types of material support. Civil society I use here means a metaphorical space which is composed of grassroots NGOs with no substantial ties to the Chinese government. My observation is based on research by Anthony Spires, an expert on civil society in China, which reveals that despite American “funders’ rhetorical emphasis on NGOs and civil society organizations, in reality, the vast majority of funding has gone to government-controlled organizations, including academic institutions, government agencies, and government-organized NGOs.” Although the period of funding by U.S.-based foundations to Chinese grantees he examined is between 2002 and 2009, I venture to assume that the pattern has persisted over the past five years. Thus, I would infer that the new legislation and its implementation would probably result in a decrease or no significant increase in foreign funding for government-controlled nonprofit entities. However, it would not deal a heavy blow to China’s civil society, at least in funding terms. I should make clear that I do not imply that the latest enactment will not reduce space for Chinese NGOs; instead, I would simply argue that a real or potential fall in overseas funding for civil society in China would not be a major factor.

Moreover, I would not believe that there would be many viable options available for international stakeholders to effectively respond to “the new normal.” However, I would suggest that foreign commercial companies (including those registered overseas as for-profits) and individuals play a significant role in helping strengthen civil society in China. Over the past decade, there have been an increasing number of American and European multinational corporations that have carried out public interest programs such as corporate social responsibility initiatives and projects that are designed to partner with Chinese NGOs in making a positive impact in local communities across China. I do not suggest this would be the risk-free alternative response to the tightening atmosphere for foreign NGOs, but such approach should not be overlooked.

There is a big picture behind Beijing’s new law on the activity of foreign NGOs in China.

Even in the 1980s, when the first foreign NGOs, such as the Ford Foundation, came to China there were concerns: would they really help China to modernize or would they push China on the frightening path of “heping yanbian” (peaceful evolution, the Party code-word for moving out of socialism)? But then, pragmatism prevailed. As long as they helped China modernize, and spread money around, NGOs were good.

The present law on NGOs, introducing new restrictions on their operations in China, is a dramatic break from the old practice and results from basically three sets of anxieties:

  1. There are too many NGOs in China and it is growing harder to check and control what they do
  2. Foreign NGOs were allegedly involved in the various color revolutions that toppled regimes in the former Soviet empire or in the Middle East, they are thus suspected of hosting sometimes treacherous nests of foreign spies.
  3. There is a change of mood in Beijing about what the West wants for China. Some 30 years ago ultra realist Beijing’s leaders believed the U.S. had an interest in helping China as a piece of its grand anti-Soviet strategy; now many of those leaders think the U.S. has an interest in stopping or slowing down China’s growth, as this could challenge American “world dominance”.

Point No. 3 is crucial as it feeds, and is fed by, self-fulfilling rhetoric that moves back and forth on both sides of the Pacific that either posits China as a threat to the global status quo (in America) or has the U.S. wanting to stop China’s challenging rise (in China).

This thinking is most difficult to unravel and even to cope with, as it may have some elements of truth on either side. It would take too long to address the issue here, but suffice it to say that the general mood of China on the West has changed and so has the Western mood on China. China certainly needs a new, real cultural revolution to begin to think of the world in a diverse way but, in the meantime, we have to wait to see how the new law will be implemented.