China’s New Laws on Foreign NGOs

Operating in China just became a bit more complex for foreign nongovernmental organizations （NGOs）. China’s new “Law on the Management of Foreign Non-Governmental Organizations’ Activities within Mainland China”， which was passed at the 20th meeting of the Standing Committee of the 12th National People’s Congress on April 28， 2016， centralizes the regulation of the registration， management and reporting requirements for foreign NGOs with the Chinese Ministry of Public Security （MPS）.

The law applies to “foreign NGOs”， which are defined in the law as social organizations including foundations， social groups and think tanks. The law allows foreign NGOs to operate in the areas of economics， education， science， culture， health， sports， environmental protection and poverty and disaster relief while expressly forbidding them from funding or engaging in any for-profit， political or religious activities or engaging in any activities that “endanger state security” or“damage the national or public interest”.

Foreign NGOs that want to conduct long-term activities in China must obtain the consent of a Chinese professional supervisory unit to register a representative office. The specifics of this process are unclear， but the MPS is expected to issue a list of approved professional supervisory units with which foreign NGOs may partner before January 1， 2017， the effective date of the new law. Foreign NGOs that wish to en-gage in temporary activities without an office or staff in China will not need to obtain such consent， but will need to enter into arrangements， including a written agreement， with a Chinese Partner Unit， defined in the law as a state organ， mass organization， public institution or social organization， and will be subject to certain reporting requirements.

In addition to the list of approved professional supervisory units， the law also requires Chinese authorities to issue “draft catalogs of foreign NGOs’activity areas and projects”. It remains to be seen how the catalog （which will presumably list approved activities） will compare to the list of approved activities that appears in the law itself and whether the catalog will be exhaustive. It is expected that regulations outlining the implementation of the law will be issued， but it is not yet clear whether or not there will be an opportunity for comment on such regulations.

The final version of the law addresses some， but not all， of the critiques received in response to two previously issued drafts， which drew a great deal of criticism for being overly restrictive and for threatening the continued growth of China’s civil society. Certain widely criticized provisions in earlier drafts were removed， such as provisions limiting foreign NGOs to having one office in China， requiring re-registration every five years and having to obtain police permits for temporary activities.

However， the final version of the law gives China’s domestic security forces even greater power than it has ever had to restrict the activities of groups thought to be working against government interests. Under the law， the MPS has the explicit right to enter an NGO’s domicile to conduct on-site inspections， question representatives of foreign NGOs and their Chinese partner organizations， examine and seal documents and seize venues， facilities or assets. The new law also has a broad prohibition on foreign NGOs fund raising in China and on any organization or individual in China accepting funding from an unregistered foreign NGO.

The MPS has acknowledged that some foreign NGOs are already operating in China， having registered under previous regulations， and has indicated that these organizations will be given an opportunity to submit additional documentation and register under this new law. The new law comes on the heels of the passage of China’s first charityspecific law on March 16， 2016， the “Charity Law”， which provides domestic NGOs with some clarity in an environment that has historically lacked accountability and predictability. The Charity Law allows domestic NGOs to register and raise funds， and even permits organizations and individuals who are not registered to raise funds by cooperating with a registered charitable organization that has obtained a public fundraising certificate.

However， the Charity Law places additional restrictions on the ability of domestic NGOs to fundraise without the approval of the government， and organizations that fundraise without receiving governmental approval could face criminal investigation. This could have serious implications for the many independent organizations that rely on crowd-funding in order to carry out activities promoting labor， health， women’s rights and the rights of people with disabilities. Public interest groups also anticipate the new law will take an immediate toll on their ability to provide legal services.

Many in the international community have criticized these two new laws as merely the latest examples of China’s ongoing efforts to curb political discourse and reduce foreign actors’ influence on China’s domestic affairs. While the extent of its impact is yet to be seen， the new law regulating foreign NGOs seems to reflect the Chinese governing authorities’complicated relationship with foreign NGOs， many of which bring important aid and relief to the country but are also viewed as a potential source of disruption.

Foreign NGOs Under Increasing Pressure in China

When the Beijing Public Security Bureau recommended that prosecutors charge Guo Yushan and He Zhengjun of the Transition Institute， an economic and social policy think tank， with conducting “illegal business activity” by publishing books and periodicals， it named four foreign nongovernmental organizations that it said had helped finance the alleged crime.

It is not illegal in China for international NGOs to provide grants to Chinese nongovernmental organizations. About 1，000 of these operate in China， while up to 5，000 more work on temporary programs， according to a China Daily article posted on the website of the State Council， China’s Cabinet.“So why are they appearing in police documents？ It’s an important question to ask，” said Geoffrey Crothall of China Labor Bulletin， a Hong Kong-based NGO that promotes the rights of workers in China.

Draft legislation currently before the National People’s Congress may increase controls over the activities of foreign NGOs in China， including the funding of local groups. But China is not the only country seeking to rein in foreign NGOs. Both India and Russia have recently done so. One of the four foreign NGOs named by the Beijing police was Probe International， a Toronto-based organization that focuses on environmental issues. Its executive director， Patricia Adams， commented in an email that the police recommendation to prosecute the two men was “perplexing.”

Here is her fuller statement：

As we understand from the Beijing Police Bureau’s written recommendation， our colleagues at the Transition Institute in China are accused of researching and writing articles and reports， and giving university lectures. From our perspective in Canada， it is perplexing that such activities would be considered illegal.

We have indeed collaborated with the Transition Institute on environmental and resource policy issues， as you can see from our website. These collaborations also appeared on the Transition Institute’s websites before they were taken down. In addition， the Transition Institute has translated some of our foundation’s publications dealing with Canadian environmental and resource policies， which it felt would be of interest to Chinese readers.

In our view， the Transition Institute has provided expert analysis on policies that are central to China’s economic development and environmental protection. Until we have a better understanding of the totality of the Chinese police’s complaints， we wouldn’t want to comment on matters that might come before Chinese courts.

After a first draft of China’s proposed law on foreign NGOs drew negative comments last year from Chinese academics as potentially too restrictive ― it suggested， among other things， that they must register with public security bureaus and not raise money domestically， according to media reports ― the government appeared to soften its approach， said Mr. Crothall， of China Labor Bulletin.

Currently many foreign NGOs operate as businesses， as do domestic ones， in an effort to avoid onerous capital requirements for a formal registration with the Ministry of Civil Affairs.“It seems the first draft was drafted by the Public Security Bureau，” one of two ministries ― the other was the Ministry of Civil Affairs ― tasked with the job， he said. “And so you saw it was very much from their perspective. And now other people have realized there are other things you have to take into consideration.”

These include the expertise and practical help that international NGOs offer， especially to local governments grappling with poverty or environmental issues.

According to the latest draft， an international NGO may set up a branch in China， if it receives the approval of the State Council.

Naming the four groups in the document was a form of pressure， Mr. Crothall said. “But the pressure is not new，” he said. “For a long time now the primary concern of the authorities when dealing with Chinese NGOs has been to see who their funders are. And， in fact， they’ve known this for a long time. It’s just now they’re putting this out into the open.”

China has in the past warned that foreign organizations could help foment “color revolutions” subversive to Communist rule. Articles in prominent state-run news outlets have accused the pro-democracy demonstrators who occupied parts of Hong Kong for more than two months of having been financed by foreign organizations， a charge the protesters denied.

Some officials in Beijing have characterized foreign nongovernment groups as “black hands” working to undermine one-party rule in the country. Those suspicions have grown under Mr. Xi.Officials have accused such groups of instigating the pro-democracy Umbrella Movement in Hong Kong and protests in Tibet， as well as trying to quietly usher Chinese society toward Western ways via what Mao Zedong called a“peaceful evolution.”

“The foreign NGO management law is like many other Xi-era initiatives： yet another tool to legalize human rights abuses，” said Sophie Richardson， the China director at Human Rights Watch.Foreign legal experts say China should have a law that approves the work of such groups. But from a civil society perspective， they say， it makes no sense for the Ministry of Public Security， rather than the Civil Affairs Ministry， to be the regulator. A few foreign nongovernment groups， including the Bill & Melinda Gates Foundation， do operate with official sanction in China now， but they will still need to comply with the mandatory police registration. Certain types of nongovernment organizations ― like groups that work with Chinese human rights activists or lawyers ― will have little chance of finding an official partner or registering with the police.

One example is the Chinese Urgent Action Working Group， which a Chinese lawyer and a Swedish resident of Beijing founded seven years ago and registered as a business in Hong Kong.The group offered legal training and assistance programs， supporting activist lawyers and grass-roots lawsuits against officials. In recent months， the police dismantled the group by arresting members. The Swede Peter Dahlin was detained in January and forced to make a televised confessionof so-called crimes before being deported.

Beijing is already suspicious of foreign and Chinese nongovernment organizations that receive funding from outside sources deemed politically suspect， like the National Endowment for Democracy and the Open Society Foundations， both based in the United States. Groups that operate here with any financing from those sources will be even more vulnerable under the new law.

U.S. Denounces Chinese Law Restricting Foreign Organizations

American leaders and interest groups have sharply criticized a new law in China aimed at controlling and limiting the work of foreign nongovernmental organizations in the country， saying it will lead to the deterioration of ties between the Chinese and people from abroad.

The statements critical of the law， reflected disappointment that China did not make more changes to previously released drafts， despite the outcry from foreign groups and governments that harsh wording in those versions provoked. More than 7，000 foreign nongovernmental groups operate in China， according to the state news media.

“The United States is deeply concerned that China’s new law on the management of foreign NGO activities will further narrow space for civil society in China and constrain contact between individuals and organizations in the United States and China，” the White House said in a statement.

“Recognizing that a vibrant civil society is a cornerstone of stability and prosperity， the administration has expressed strong support at every level for the role of civil society in China，” it added. “We urge China to respect the rights and freedoms of human rights defenders， journalists， business groups， development professionals， and all others who make up civil society， including by protecting the ability of foreign NGOs to operate in China.”

John Kerry， the United States secretary of state， issued his own statement， saying that he was “deeply concerned” that the law would “negatively impact important people-to-people ties between our two countries and the development of civil society in China.”Mr. Kerry said that he had been regularly raising concerns about the law to Chinese officials since an early draft was released last year.“The final version of the new law contains certain improvements from the original draft，”he said， adding that “it also creates a highly uncertain and potentially hostile environment for foreign nonprofit， nongovernmental organizations and their Chinese partners that will no doubt discourage activities and initiatives.”

The most burdensome requirements of the law are that foreign groups must find official Chinese partners and that the groups must register with the police， who will be permit- ted to examine every aspect of their operations， including their finances， at any time. Leaders of foreign groups in China say that many local organizations will， out of aversion to risk， avoid taking responsibility for foreigners and their activities.

The law says that academic groups and hospitals should abide by “relevant national laws，” prompting the question of whether the new law would apply to them. However， Xinhua， the state-run news agency， mistranslated the phrase in an English-language article， saying the law stated that those kinds of groups need only abide by “existing regulations.” This was among the “eased restrictions” compared with those in earlier drafts， it said.

The American Chamber of Commerce in China also expressed disappointment with the law， saying that it would harm a “huge number of NGOs” and companies with which they collaborate， according to Reuters.“Treating foreign NGOs as primarily a security threat undermines not just the ability of those organizations to benefit China， but also the ability of companies to do business here，” James Zimmerman，the chairman of the chamber， was quoted as saying.

Foreign nongovernmental groups run programs across the spectrum of Chinese society， on issues including gender equality， environmental protection and legal assistance. The police are especially wary of some initiatives， like those that support an independent judicial system or press freedoms.

The new law is to go into effect on Jan. 1. It will also apply to groups from Hong Kong， Macau and Taiwan. Many foreign groups have already begun asking how the police will carry out and enforce the law and have started looking for official Chinese sponsors， though the law does not specify who will qualify as a sponsor.

Hua Chunying， a spokeswoman for the Ministry of Foreign Affairs， dismissed criticism of the legislation during a regularly scheduled news conference in Beijing， arguing that it would strengthen the rule of law.

Ms. Hua also suggested that compromises had been made.“China fully solicited opinions and suggestions from all sides at home and abroad and made changes to relevant articles，” she said. “We hope that relevant countries respect China’s legislative sovereignty.”

Voice from China’s Official State Media

A current article published in China’s official state media： People’s Daily said， foreign media shall be more familiar with the new law rather than feeling anxious about it. To bring the management of foreign NGOs to legal system track is inevitable requirement of China’s lawbased governance. Each country has its own management system of foreign NGOs. For example， in western countries such as France， there have been rules requiring foreign NGOs to submit application in local police and get the approval of the countries’ministry of the interior.

A law like this can guarantee a smooth and orderly implementation of foreign NGOs activities in China. The new law has gained deep concerns of western countries even at its draft period. Western media shows their concerns by questioning whether China will tighten up policies of foreign NGOs’ activities in China， especially when the law requires the police to be registration and management organ of foreign NGOs.

However， humorous remarks of Guo Linmao， a legislative official from the National People’s Congress Standing Committee’s legal affairs commission， amused reporters in the news conference. He quoted a popular folk idiom： ask the police for help whenever you are in trouble， you don’t need to be afraid unless you break the law.

China is a law-based nation. To require foreign NGOs act within sphere permitted by the law is justified. In the past， China has been absent of relevant law， so this new law is just making up the loophole. Moreover， the law on the management of NGOs went through a whole year from the second review of the draft to the public announcement to the final approval. Advises given by foreign NGOs in China have been listened to specifically. The legal rights of foreign NGOs will be protected in in a more sufficient and better way under this new law.

Needless to say， for a very few foreign NGOs who operate illegally in the name of exchange and cooperation， this new law will warn and deter them. During the news conference， Zhang Yong， a member with the law work committee of NPC Standing Committee said， currently， there have been a very few foreign NGOs planned or already done things threatening stability of China’s society and national security.It’s self-evident that no normal countries will allow activities damaging national security and public interests.

Normal projects such as public welfare and exchange will not be restricted by this law. According to incomplete statistics， since China’s opening and reform， nearly 10，000 foreign NGOs have implemented activities in China. Instead of stuck in blind anxiety， foreign media shall get more familiar with the new law. China welcomes and supports all foreign NGOs’friendly exchange and cooperation with China. Activities will be well protected by the law as long as foreign NGOs follow this law. There’s nothing to be afraid of.

Understanding China’s Foreign NGO Activities Law

Western and Chinese officials have battled over the meaning of China’s new Law on Foreign Non-Governmental Organizations’ Activities within Mainland China （NGO law） since it was recently approved by the National People’s Congress（NPC）. Outside of China， many have argued that the law is designed to further restrict Chinese civil society. The White House， for example， expressed its “deep

concern” that the law would “further narrow space for civil society in China.” A joint statement from three Special Rapporteurs of the U.N. Office of the High Commissioner for Human Rights also worried that the law’s “excessively broad and vague provisions . . . can be wielded as tools to intimidate， even suppress， dissenting views and opinions.”

Chinese officials disagreed strongly， arguing that the NGO law is intended to support international organizations by providing a legal foundation for their activities in China. Deputy Director of the NPC Standing Committee Legislative Affairs Commission Zhang Yong stated that the law was designed to “facilitate the activities of foreign” and “guarantee”the “legal rights of foreign NGOs.” Xu Xianming， Deputy Director of the Legislative Affairs Commission， similarly argued that， “it is necessary to have a law to regulate and guide”foreign NGOs given their quick growth.

Other statements in Chinese media， however， suggest a slightly different motivating concern： national security. Director of the Ministry of Public Security Foreign NGO Management Office Hao Yunhong said that since a “minority” of foreign NGOs “are able to harm China’s national security interests，” “strengthening control . . . is something we should do.” Deputy Director of the China Association for NGO Cooperation Huang Haoming noted that， “the law was designed for national security.” An editorial in the Global Times， a state-run publication， also argued that the law was designed to avoid risks that NGOs might pose to Chinese security interests.

And the concern with national security is evident throughout the NGO law’s text. To understand what the law might mean in practice is it critical to analyze how it answers three questions： （1） What is a foreign NGO？ （2） What activities can a foreign NGO undertake？ （3） How will the government regulate foreign NGOs？

What is a foreign NGO？

Article 2 and Article 10 of the law stipulate that a foreign NGO must be a non-profit， non-governmental social organization legally established outside mainland China that has operated for two or more years with a charter devoted “to the development of social welfare”. It’s not immediately clear， however， which organizations this is meant to include. Article 2 mentions foundations， social groups， and think tanks， but the sentence structure suggests that this is a demonstrative， not definitive， list. According to Article 53， however， we can be certain that foreign schools， hospitals， natural science and engineering research institutions， and academic organizations are not considered foreign NGOs when they are conducting exchanges with similar Chinese counterparts.

What can a foreign NGO do？

Article 3 stipulates that NGOs are allowed to undertake activities “beneficial to the development of social welfare”. Again， the law does not articulate a definitive test for what this might mean. But by comparing this provision to a similar section of the Charity Law， it is reasonably clear that it includes activities related to economics， education， science， culture，health， sports， environmental protection， and poverty and disaster relief.

Equally important is what NGOs cannot do. Article 5 proscribes anything that would “endanger China’s national unity， security， or ethnic unity” or “harm China’s national interests [and] societal public interest”. These terms， however， are not defined in the NGO law， prior regulations from the Ministry of Public Security， or Charity Law.

The 2015 Revision of China’s Criminal Law is more helpful as a reference point. Article 103 ties “endangering national unity” to separatism， suggesting that national unity is primarily concerned with secession. Furthermore， Article 107 includes treason， separatism， armed rebellion， and subverting state power as activities that endanger China’s “national security.”Finally， assuming that it is in China’s “national interest” and“societal public interest” to prohibit activities endangering public security or disturbing public order， the NGO law also prohibits an eclectic range of activities ranging from arson（Article 114） to destroying public transit （Article 117） and“picking quarrels” （Chapter 6 §1）.

While this may seem rather confused， it is not wholly illogical. Throughout the legal code， China has used terms of art to prohibit a wide-ranging and shifting set of activities that， in a given situation， the state perceives as endangering its security. The NGO law continues that tradition.

How are foreign NGOs regulated？

Article 6 empowers the Ministry of Public Security to manage foreign NGO activities through an as-yet unspecified “mechanism.” Article 11 also requires that every foreign NGO be associated with a “professional supervisory unit”tasked with approving the NGO’s yearly work plan （Art. 19）， reporting any hiring decisions （Art. 27）， and ensuring that the NGO’s activities are undertaken lawfully，. Article 46， furthermore， creates criminal penalties for Chinese supervisory units that knowingly aid a foreign NGO in contravention of any the above provisions. There are two important unknowns here. First， there are no details regarding the “mechanism”that the Ministry of Public Security must create to register and oversee foreign NGOs. Second， the law does not define which organizations will qualify as professional supervisory units or the extent of their liability for foreign NGO activities.

What Happens Next？

It is difficult to predict the law’s effect on international engagement in Chinese civil society. Considerable ambiguity remains in defining foreign NGOs， the activities they are permitted to undertake， and the system in which they will register and operate. If past legislation is any guide， some of these ambiguities will persist （e.g.， “endangering national security”） so as to maximize the state’s discretion in applying the criminal law. It is common， however， for major pieces of legislation like this to be followed by detailed implementing regulations.

For example， the Supreme People’s Court and other state ministries jointly published a set of guidelines defining and clarifying substantial portions of the Criminal Procedure Law after it was passed in 2013. Indeed， Director Hao indicated that a detailed work plan， including lists of professional supervisory units， will be released in the coming months.

The Foreign NGO Activities law was always intended to prioritize Chinese security concerns. Implementation over the next few months will show just how significantly these concerns will impact how international NGOs interact with Chinese civil society.