China's move toward restricting foreign NGOs spurs anxiety in many organizations

When a massive earthquake struck Nepal in April, Chinese nongovernmental organizations rushed in to provide help, making camp on the grounds of the national palace museum and distributing water, food and tents.

A Lions Club chapter in Guangdong province pitched in; so did the China Foundation for Poverty Alleviation, among others.

But Chinese nonprofits are not just engaging with neighbors during disasters: They have helped build hospitals in Sudan and organized educational exchanges with African lawyers.

The nascent coming-out reflects China's economic and social development, as well as a recognition that such activities are a means to enhance the country's image.

But even as Chinese NGOs have started casting their gaze overseas, international nonprofits working in China are feeling a chill. Draft legislation under consideration could, for the first time, put foreign nonprofits under the direct supervision of China's security apparatus and impose a range of restrictions. Among the proposed rules: requiring half of all staff to be Chinese and forbidding direct recruitment of volunteers.

The legislation apparently would cover philanthropic groups such as the Gates Foundation and Doctors Without Borders, environmental organizations such as Greenpeace, educational entities and nonprofit trade associations such as the U.S. Meat Export Federation and the Motion Picture Assn. Overseas entities such as orchestras and museums that want to do tours or other short-term activities in China would need consent from security officials.

China says the aim of the legislation is to bring foreign nonprofits out of a legal gray area; many are now essentially registered as businesses on the mainland because China has lacked clear national regulations for foreign NGOs (aside from a few dozen overseas foundations registered with the Ministry of Civil Affairs). The draft law "is part of our effort to rule the country according to law, and also part of our effort to align China with the international community," Foreign Minister Wang Yi said in an interview.

Wang said the new law would not create obstacles to NGOs that are "dedicated to promoting exchanges and cooperation with the Chinese people in accordance with Chinese laws." But the proposed legislation comes in wake of the establishment of a new National Security Council, the drafting of a new national security law, and rising government rhetoric warning against the pernicious influence of "Western values."

The legislation says foreign NGOs must not endanger China's "national unity, security or ethnic unity" nor "harm China's national interests" nor "illegally engage in religious activities" and cannot raise money within China.

The proposal has inspired significant anxiety among foreign nonprofits — some of whom say they may be forced to curtail their activities or withdraw from China altogether — as well as many Chinese partner organizations, who worry that their overseas funding and professional support could be cut or criminalized.

Representatives of 10 major foreign nonprofits operating in China, contacted for comment, refused to be quoted by name or organization for fear of antagonizing Chinese authorities. "People are so skittish right now," said Anthony J. Spires, an associate professor of sociology at the Chinese University of Hong Kong whose research focuses on civil society and NGOs in China. "It's really a big deal."

But 45 foreign trade groups and professional organizations, including the U.S. Chamber of Commerce, the Recording Industry Assn. of America and the American Bar Assn., wrote an unusual letter last month to Chinese authorities, warning that unless revised, the legislation would have a "significant adverse impact on the future of U.S.-China relations."

Foreign industry associations, universities, environmental groups, science and technology groups and other NGOs, the 45 signees said, are key to businesses' research, market development, information sharing, innovation and corporate philanthropy activities. The legislation would even seem to limit Chinese engineers from participating in international professional societies, it said.

As drafted, the law would "negatively impact the ability of companies to do business in China, as well as U.S.-China commercial and people-to-people exchanges," said James Zimmerman, chairman of the American Chamber of Commerce in China. "This is increasingly important as China globalizes and its companies and NGOs expand overseas."

Exactly how many foreign NGOs operate in China is unclear; Spires put the number at 200 to 300, though some estimates range as high as 6,000. Fewer than 30 foreign foundations are registered with the Civil Affairs Ministry. China has more than 4,000 domestic foundations as well as 600,000 registered domestic NGOs, many of which have significant government participation, despite engaging in NGO-type activities.

The draft legislation calls for foreign entities in China with nonprofit parent organizations abroad to find a Chinese government agency to serve as their "sponsor"; the government is to publish a list of authorized sponsor agencies. But finding a sponsor may prove difficult, experts said, because government officials may be wary of vouching for a foreign entity.

"This would be a political risk, a personal risk" to one's career, Spires said.

But more concerning, Spires said, was the possible "ripple" damage to links between Chinese civil society groups and foreign nonprofits — cutting off funding, inhibiting mentoring and closing off the exchange of ideas.

"The law basically would prohibit any entity in China from receiving funding or doing partnerships with any non-approved foreign NGOs," said Huang Xuetao, a Chinese attorney who works with grass-roots organizations. Huang said she believes Communist Party authorities fear that foreign NGOs are promoting "Western values" and ideology.

"For Chinese authorities, this is a real threat; they view Western influence as undermining their role," she said. "But from a legal point of view, it's hard to regulate value systems. Laws can mostly only regulate actions.… So they have drafted this law to take away as much freedom as possible and hand it to police."

A staff member of a foreign nonprofit who has 30 years of experience in China said she believed there were several triggers for the concern among Chinese authorities — including the U.S. surveillance activities revealed by Edward Snowden; the U.S. "pivot" to Asia; and last year's "Occupy Central" pro-democracy protests in Hong Kong, which some mainland Chinese authorities said were instigated or supported by foreign "black hands."

"All of this has fed a real worsening of bilateral [U.S.-China] relations that is about the worst I've ever seen," she said.

A monthlong comment period on the draft legislation ended in early June, but no Chinese or foreigners working in the sector expressed any optimism that major revisions would be made. Still, several said the real clarity will not come until Public Security authorities begin implementation and enforcement.

"It's incredibly comprehensive in its approach," one representative of a European-based nonprofit said. "But we need to see how much micromanagement they do. For example, when they say they want to review our plans yearly, does that mean general plans or something very specific? Nobody knows yet."

julie.makinen@latimes.com

Tommy Yang in The Times' Beijing bureau contributed to this report.

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