The Foreign Service Journal, May 2005

Society Outpaces State Policy The development of a more plu- ralistic and open society has spawned a proliferation of Chinese civic non- governmental institutions, now total- ing over three million. However, fewer than half of these nonprofit organizations are registered with the Ministry of Civil Affairs. The rest either are not registered or are regis- tered in other categories, such as business enterprises, in order to avoid the onerous NPO registration process. These NPOs range from member- ship-based associations to private clinics and schools, charities and foundations; from consumer groups to chambers of commerce; and advocacy organizations, such as environmental and women’s legal aid groups. Affiliate institutions are springing up to do research, train or provide information services for this sector, such as the China NPO Network, which has worked with the Tennessee-based Maclellan Foundation to sponsor train- ing in accountability and discussions of standards for self- discipline within the NPO community. Some groups are faith-based. Local congregations or religious associations have spawned small-scale social service agencies, such as the Signpost Youth Club affiliated with Ningbo’s Catholic Diocese in Zhejiang province. This “virtual” club uses the Internet to pro- mote spiritual formation for younger Catholics (ages 18–30) working and studying in different parts of the province. Another example is the Holy Love Founda- tion in Chengdu. A young couple, taking pity on idle handicapped youth unable to attend school, registered the foundation in 1992 under a business sponsor. They raised funds to refurbish an old warehouse, turning it into a boarding school. Board members include a gov- ernment representative from the municipal Bureau of Civil Affairs, which then takes up to 1 percent of dona- tions for overhead. By contrast, the YMCA/YWCA in China, headquar- tered in Shanghai with branches in 10 cities, is a state- run NPO with a long pre-1949 history. The Shanghai branch is pioneering a new type of multifunctional community center to provide better services than those available from the government street offices. The competitive pressure from these organizations, especially in the area of humanitarian social services, has affected even China’s top-down nonprofits, known officially as “GONGOs” — government-organized nongovernmental organizations. The GONGOs now allow foreign participa- tion and training (in addition to fund- ing). They are learning to develop their own domestic donor bases and, increasingly, strive to promote the interests of their constituencies, not just state goals. Most Chinese citizens know that governments everywhere are cutting back the welfare state, but until recently, they were unaware of the resulting “associational revolution” that has produced a massive wave of development of nongovernmental organizations worldwide. As part of this global trend, the World Bank is seeking to empower Chinese com- munity organizations in their development projects. These pioneering groups are learning from the vibrant nonprofit sectors in Hong Kong, Taiwan and Singa- pore. At an international conference on poverty re- education in Beijing in October 2001, NPO organizers offered to act as the “vanguard” in cooperation with international counterparts, as well as with Chinese gov- ernment and business, in exploring new models for poverty alleviation. Contention over the Social Contract During the 1990s, the Chinese Communist Party encouraged citizens to seek material prosperity and enjoy greater personal freedoms — so long as they avoided political challenges to the system. This approach spurred a wave of economic and social entre- preneurialism that boosted private for-profit and non- profit activity at all levels of society. But it also encour- aged the flouting of tax laws and of auditing and regis- tration requirements, and fostered corruption and abuses of power by local government officials exercis- ing newfound discretionary powers. After the Asian financial crisis of the late 1990s, the Chinese leadership began to pay closer attention to sources of economic fluctuation, growing economic inequities and escalating incidents of mass social F O C U S M A Y 2 0 0 5 / F O R E I G N S E R V I C E J O U R N A L 41 Beijing and Washington have tacitly acknowledged the mutual need to avoid bilateral crises and focus on common interests.