The number of domestic NGOs registered in China has shot up to 511,000, with 19,000 Chinese NGOs added in 2013 alone, thanks to new laws that make it easier for social organizations to register with the government. However, over-regulation and a lack of tax benefits are still constricting the overall growth of China’s social sector, reports China Daily.
Reforms to China’s NGO registration process came into effect in March 2013. The new laws loosened registration requirements for industrial associations, charities, community service organizations, and organizations promoting technology, eliminating their need to find an official government monitor before starting up. In the past, the requirement to find a government affiliate often proved too burdensome for many nonprofits, leading many groups to register as a private company, or simply not register at all.
With the new process in place, direct registration now only takes about 7 days. Zheng Xiaojie, secretary general of the Beijing Hongdandan Education and Culture Exchange Center, said to China Daily, “When we acquired a legal identity as an NGO, it felt as though the bonds that had constricted us had become looser and we were no longer worried or concerned about our awkward identity.” She had been trying to register her organization for over ten years before the reforms came into play.
The loosened requirements are part and parcel of the Chinese government’s efforts to engage more with the social sector. In addition to making it easier for certain types of organizations to work officially, the government said it would also allow nonprofits to act as service providers and it has been sitting on an idea to make charitable giving mandatory for all income-earning citizens. So far, the government has also “invested around 400 million yuan ($64.5 million) to support 470 projects run by social organizations.”
China’s support and recognition of the role NGOs can play in development is certainly good news for those monitoring the country’s blooming social sector, but domestic nonprofits say that there is much more the government could do to help the sector grow. At present, only a limited number of nonprofits in China are able to give their donors tax receipts, so expanding nonprofits tax-deductible status could help boost their funding. Additionally, Chinese laws only allow administrative costs to take up to 10% of a foundation’s expenses, so it is very difficult for nonprofits to pay their staff decent wages and attract new talent. In this aspect, deregulation could actually prove extremely helpful to the local nonprofit sector’s capacity building efforts.
Source: China Daily