June 3, 2015 |
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21st Century China Opinion
Draft law on Regulation of Foreign NGOs in China: Implications for Educational Institutions  
From the source

"Western governments and foreign non-profit groups are pressuring China to revise a proposed law they say would severely restrict the activities of non-government organizations, business groups and universities, according to people familiar with the matter." 

 
 
Source: Reuters
Our take
 

The Chinese legislature National People's Congress Standing Committee recently released a second draft legislation on the regulation of foreign nongovernmental organizations (NGOs) in China. This controversial piece of legislation is likely to have a profound impact on the kind of NGOs allowed in China and the scope and nature of their operations. Chinese media reports cite about 1,000 foreign NGOs currently active in China. Add the number of organizations that oversee short-term projects in China, and the number of NGOs active in China reaches 4,000-6,000. The draft law defines NGOs as "non-profit and non-governmental social organizations that are established overseas." 

NGO registration, even for domestic organizations, has been problematic in China. Many either choose to remain unregistered or register as business entities. This regulation targets foreign NGOs by laying down the requirements for registration while imposing draconian provisions that will sharply narrow the space for foreign NGO registration and operation. Noncompliance could subject NGO personnel to financial penalties, dismissal and detention. 

Educational entities seem to be exempt from this law (there is a separate law that governs educational cooperation with foreign institutions), but this law will make it difficult for the mainland educational institutions to collaborate with foreign NGOs and think tanks. It is also not clear if university-affiliated organizations, such as alumni associations, may be subject to increased regulation. 

The most disturbing aspect of the current draft law is that it metes out different treatments to the "foreign" NGOs and domestic ones. While domestic NGOs register with the Ministry of Civil Affairs, foreign NGOs are required to register with the Ministry of Public Security and they must also have Chinese sponsors acting as supervising agencies. It is clear that the foreign NGOs are viewed as potential security risks to China, and that they are governed as such. In this sense, one can view the draft law as part of a larger policy trend in China that aims to tighten the government's control over information and social organizations. 
 
As it stands now, the draft law has caused much concern among the international NGO community. It will impact China's international exchange beyond commerce and government relations. It is also not inconceivable that the law may even expose China's own nonprofit organizations that operate in foreign countries, e.g., Confucius Institute, to international backlash.

Field Notes from China:
Selections from
the
Chinese-language Media
10 questions for Ashton Carter on the
South China Sea
南海，十问美国防长卡特
  

Summary: Luo Yuan, an outspoken hawk holding the rank of major general in the People's Liberation Army Navy has become well known over the past decade for his strident opposition to U.S. foreign policy. Using his perch as a regular contributor to the Global Times, Yuan has made increasingly belligerent threats against a host of countries, including India, Japan, Vietnam and, of course, the United States. As the war of words over the South China Seas has escalated in the past few weeks, Luo has made several controversial statements. In a recent commentary for the Global Times, he posed 10 questions for U.S. Secretary of Defense Ashton Carter after his stern speech taking China to task for its island construction.   

 

Excerpt from the story: "If China and the U.S. are to lay their cards bare, can the latter be said to have an absolute assurance of victory over the former? It should be known that China is continuously preparing for victory in a modern war, especially in the domains of preparing for a war of information technology, including both equipment and strategy. This war would happen on China's doorstep, and thus many of China's military disadvantages could be overcome. The U.S., on the other hand, would be fighting a war half way around the world, and thus many of their advantages would dissipate. 

The above words are not meant as a threat, but rather as a goodwill reminder for Defense Secretary Ashton Carter after his 'fierce words.' America is a pragmatic country, and I believe it will carefully consider the ramifications of any actions before taking them." 

 

Source: Global Times

Chilean institutional investors get RMB 50 billion quota
RQFII试点再扩容 可投资额度超万亿

 

Summary: China has been remarkably cautious in opening up its capital market to outside investment. As is often the case with China's model of liberalization, it starts with a series of trial programs and, if successful, expands from there. A recent article appearing in Caixin discusses one such program in Chile, which allows investors there to invest in Chinese stocks and bonds with RMB holdings.

 

Excerpt from the story: "China has granted a RMB 50 billion quota to Chilean institutional investors in a new program allowing foreigners to buy stocks and bonds with their RMB holdings. This brings the total amount that overseas investors can spend on securities in Chile to more than RMB 1 trillion. Known as the Renminbi Qualified Foreign Institutional Investors (RQFII), the program was launched in 2011 so that foreign investors would be able to use their RMB holdings to buy stocks and bonds in the Chinese market, which, owing to restrictions on cross-border capital flows, they are denied access to. On May 25, the central banks of Chile and China signed the agreement, making Chile the first country in Latin America to join the program."

 

Source: Caixin

China Talk: Interviews, Lectures and Events
Chinese nationalism: confrontation or manipulation? 
At a recent talk at the School, UC San Diego alumnus and Yale University Political Scientist Jessica Chen Weiss discussed the findings from her blockbuster 2014 book "Powerful Patriots: Nationalist Protest in China's Foreign Relations." Click on the image to launch the audio.

 

School of Global Policy and Strategy
(formerly School of International Relations and Pacific Studies)
21st Century China Program
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