Why the Business World Is Worried about China’s New Law to Regulate NGOs

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June 2, 2015; New York Times


A draft law in China aimed at NGOs has businesspeople worried, according to the Wall Street Journal. The “Foreign NGO Management Law” was described by one expert as capable of fundamentally changing the way NGOs operate.

Writing for the New York Times, Ira Belkin and Jerome Cohen assert, “If the NGO draft becomes law, the international cultural, educational, and technical exchanges that have become commonplace and so essential to China’s astonishing development may come to a grinding halt.” Most laws of this type have been more narrowly aimed at foreign-funded human rights and civil society organizations.

Why would businesspeople care when they have not spoken out when it came to similar laws in Russia, Israel, and even India? Because the proposed Chinese law has been written to include all foreign nonprofits or NGOs, even when acting in their home countries, and this could have an impact on trade associations and industry groups.

One of the most symbolic changes sparked by the law would be the requirement that all foreign-based nonprofit organizations be vetted by China’s security police before they are allowed to conduct activities in China. They would also be required to submit work plans and reports, would only be allowed to have one location in China, and would be subject to scrutiny by China even for their activities in other countries.

The new law is apparently associated with a two-year-old memo called “Document No. 9,” which urges vigilance against the “seven unmentionables”: Western constitutional democracy, universal values, civil society, neoliberalism, Western media, “historical negation,” and questioning the meaning of certain Chinese slogans. The document reads in part, “Western anti-China forces and domestic ‘dissidents’ also incessantly carry out infiltration activities in our country’s ideological sphere, and challenge our mainstream ideology,” and that “Western embassies, media organs and nongovernmental organizations act within our borders under all kinds of names to spread Western values, and foster so-called anti-government forces.”

Article 59 of the law extends the government’s monitoring authority to activities conducted outside of China that might subvert state power, undermine ethnic harmony, spread rumors, or “other situations that endanger state security or damage the national interest or society’s public interest.” In other words, as described by Belkin and Cohen, “if a student group on an American campus protests against Chinese government treatment of Tibetans, the university could be barred from activities in China, and its representatives in China could be detained and prosecuted.”

The Wall Street Journal article states that a letter is being considered by a coalition of trade and business groups but, they write, “A joint letter of concern on an issue seemingly tangential to businesses would be unusual for foreign business groups, which have tended to stick closely to matters of trade and commercial regulation and to carefully pick their battles with the Chinese government.”—Ruth McCambridge