Navigating China’s New Era of Civil Society Regulation

This year has already seen the passage of new laws governing domestic charities and foreign NGOs. The latter in particular, despite some softening during a lengthy public consultation process, has alarmed many in the sector with its heavy emphasis on national security, and a broad chilling effect is widely anticipated. Reflecting on the recent anniversary of the June 4th, 1989 crackdown at his in China blog, China Labour Bulletin’s Shawn Shieh points out remaining steps in an “unprecedented” wave of civil society regulation, and highlights its apparent political purpose:

In Beijing, the Communist Party of China has chosen to brush out the past, or perhaps more accurately to use the past as a guide to what should be avoided in the future. It is more interested in shaping the future, in particular the future of China’s , in a way that will strengthen CPC rule and prevent the reoccurence of the 1989 movement. Memory is used in the service of keeping alive Xi Jinping’s “China dream” which is a dream rooted in the future rather than the past.

The year 2016 could be said to be the year that future starts. It is the Year of Regulation when two national regulating the nonprofit, NGO, social organization sector were passed within the space of two months – the Law in April and the Overseas NGO Law in May. These are the most consequential nonprofit laws passed in the history of the PRC. […] The former defines the scope of domestic nonprofit, charitable work in China, and regulates the establishment and operation of domestic charitable organizations and the sources and uses of charitable property and services. The Overseas NGO Law regulates the operations and activities of overseas nonprofit, non-governmental organizations and their represenative offices in China.

If these two laws had been the only legislation passed this year, one could still legitimately claim 2016 as the Year of Regulation. But we now have news that there is more on the way. In late May, the Ministry of Civil Affairs issued draft revisions of regulations for registration and management of two of the three types of “social organizations” (the Chinese term for nonprofit organizations): Civil Non-Enterprise Institutions (CNIs, 民办非企业单位) and Foundations (基金会). (Note: These draft revisions are being issued for public comment [….) …] […] [Source]

English versions of the newer regulations are available at China Law Translate.

While many campaigners continue to push for the law’s repeal, other players have turned to attempts at mitigating its impact. Among them is German Chancellor Angela Merkel, who announced an “early warning system” for problems involving German NGOs on Sunday during a visit to Beijing. From Andreas Rinke at Reuters:

Merkel told reporters that she and Chinese Premier Li Keqiang had agreed to stay in close touch about potential issues once the new law goes into effect on Jan. 1.

The law grants broad powers to Chinese police to question NGO workers, monitor their finances, regulate their work and shut down offices. German rights groups and political foundations have said they fear that the law will hamper their work.

Merkel said Chinese officials had agreed that the work of the NGOs benefited both sides, and it was important to avoid negative consequences from the new law.

“That is why we … agreed to be in close touch with each other via the foreign ministries or other organizations. I think that is the right way to react initially,” Merkel said. [Source]

Merkel and Li also discussed trade issues including China’s demand for WTO market economy status, while the Chancellor extolled the political and commercial importance of rule of law in a speech to students.

Ahead of the visit, German Justice Minister Heiko Maas discussed the foreign NGO law with Deutsche Welle’s Amrita Cheema, alongside various other legal issues:

DW: What do you make then of the new law that was passed in April restricting the activities of NGOs, which will also affect German NGOs working in China. You were very critical of the law when it was under discussion last year. Now it has been passed – what consequences will that have?

This is a topic, which unfortunately pertains not only to China, but also to other countries, like Russia, or Israel for example. They have NGO laws which are called transparency laws. What they mean is they want to see who is behind NGOs, who has interests there and who can exert pressure. We have always been critical of that and it is also going to be a topic in the consultations that are coming up. But, as is always the case, at the end of the day we will not be able to convince the Chinese government not to do things that are not in keeping with our understanding of the . But that does not mean that this topic will be pushed aside. We want independent organizations and German foundations who work in China to pursue their activities there. [Source]

Despite the volume of recent regulation, various implementation details remain undefined. Shawn Shieh has argued in the past that this uncertainty allows room for NGOs to maneuver towards a relatively benign regulation regime. This point resurfaced this week in a conversation on his blog with Fordham law professor Carl Minzner, in which Minzner argued that “the determination of a much more hardline approach has already been made,” while Shieh expressed hope that “the China I’ve known and loved all these years isn’t going to change overnight.”

Minzner: […] So here’s the tactical question: given [the lack of clarity], what’s the correct response from foreign organizations? I can see two different possibilities.

The first is to go in and raise the issue loud and clear with (say, the State Council or PSB) – hey, what does this mean? Can you please clarify this in your implementing regulations? I’m pretty sure that this is exactly the approach that a bunch of American lawyers in various general counsel offices are are likely to adopt.

Now, there’s a risk to that: you might end up getting a more hardline interpretation. And such an interpretation (once codified into law or regulation) would effectively tie the hands of lower authorities/limit the flexibility of some Gansu or Guangxi provincial or municipal bureau who might be inclined to wave their hands and say – oh, sure, go right ahead, it looks like we’ve got everything we need.

The second is the reverse – note the possibility of interpreting that language in different ways, and hold ones tongue. Perhaps raise the general idea of how important US-China exchanges are, how many US organizations will feel very uncomfortable about engaging in projects in China given the general nature of and lack of clarity of the law, and how bad it would be if the entire spectrum of them were disrupted. But avoid a narrow, technical focus on specific provisions that could potentially get interpreted in a negative way.

Shieh: My sense is this is going to be a complex give-and-take process between the PSB [Public Security Bureau] and INGOs [International NGOs], and that PSBs in some provinces will have a different approach than others in implementing and enforcing the bei’an process, so even though some sort of standard procedure will emerge, there will be local variations in how it’s carried out. Both sides though will be seeking to come up with a workable process which I have to believe will require negotiation, and not just the PSB or SC just laying down the law. I think this is one of those “crossing the river by feeling for stones” moments where the PSB is trying to do something they haven’t done before. In that spirit, I would advise INGOs to approach the process as a negotiation and not try to establish clear terms or demands at the outset. Instead, work on establishing some good will with the PSB and start a discussion on how the two sides can make this process work. [Source]

Shieh will speak on these issues at a Wilson Center event in Washington D.C. on June 28th on the question, “Is China’s Door Closing?”

Another relatively optimistic take on the new law has come from the Australian National University’s Flora Sapio, who has suggested that “NGOs benefit from a substantial autonomy in the values they embody and promote through their programs,” provided that these are “not seen to pose a political or security threat to the prevailing value system.” In an exchange on Sapio’s blog, her ANU colleague Elisa Nesossi objected:

I am afraid, I cannot share your optimism. […] I cannot see in the law any single article that promotes pluralism in values, nor any specific interests to preserve other than those of the Chinese state, perhaps unsurprisingly. How can that then be reconciled with optimism and opportunities? We both know all too well the background political climate in which this and other recent laws have been passed. This is one of the reasons why I cannot identify any positives. This law is a product of its times and of a specific political design. The claim that the Law provides opportunities for China is certainly correct: the problem is that, to me, it exclusively provides opportunities for the Chinese state. In your brief commentary I could not detect any specific references nor clear practical examples of the opportunities that a foreign NGO can grasp in order to operate “on equal footing”. A practical analysis of that kind would probably be more helpful to those NGOs workers who cooperate with Chinese partners and who are trying to understand whether and how they can continue to operate in the country. At this stage the law is still very vague (and the many grey areas are extremely perilous, as we both know) and will need more explanations and clearer rules of implementation. It is precisely because of the political context it spawned from and how it reads right now that this legislation, based on my experience on the ground, prevents me from entertaining any positive thoughts or hints of optimism.

Following Sapio’s response that “precisely because of their vagueness, grey areas are dense with new interpretive possibilities,” Nesossi continued in a comment:

When I assess PRC laws, including the Law on , I tend to ask why such evident, open ambiguities are left there, and consequently reflect on the dangers that they pose. And herein lie both the problem and the explanation at once: laws such as the one we are discussing are not an articulation of some social contract. Some of those ambiguities could be easily avoided, but they are not because they are in line with the spirit and practical purposes that inform this specific law. In a system where we know who and how is interpreting the law and according to which interests, ambiguities can and will pose real dangers to people’s lives and it is this first and foremost consideration that should spring to our mind when we reflect upon a piece of legislation. [Source]