Flora Sapio: Response to Larry Catá Backer on China's New Foreign NGO Management Law: A Start at Commentary and Analysis

(Pix provided by Flora Sapio 2016)

"Over more than three decades, foreign nonprofits, foundations, and universities have played an important role, usually welcomed by China, in the extraordinary transformation of the country’s society and economy. The drafting of this new law, and the centralization of control in the MPS [Ministry of Public Security], threatens balanced and effective partnerships built up over decades and has raised fears that a sharply tightened environment in China means a closing to the world — or at least the most significant retrenchment since reforms began in the late 1970s." 

So writes Mark Sidel in, "It Just Got Harder to Make a Difference in China," an article for Foreign Policy 29 April 2016. This nicely summarizes much of the reaction outside of China to the 28 April 2016 enactment of the Foreign NGO Management Law (FNGOML) [中华人民共和国境外非政府组织管理法（草案)]. (See also Shawn Shieh,  Overseas NGO Law FAQs, NGOs in China 1 May 2016; 中国立法授权公安部门管理境外NGO).

Earlier drafts of the FNGOML distributed for comment in 2015 had generated a storm of negative criticism, especially in the West.  But not just in the West, and not just to further the interest of Western states in the work of their public and private NGOs (For my commentary on the draft see Here and Here ; Here for the Commentary of Flora Sapio; and Here for Background Briefs; Here for discussion of regulatory architecture of NGOs in China). Chinese internal commentary was not uniformly positive (see, e.g., Jia Xijin, "Legislation for Foreign NGOs; how will the second boot land?" originally in Chinese in Caijing; English version here).

In this short series we post  the following

1. Introduction to China's Foreign NGO Management Law

2. Flora Sapoio on the FNGOML

3. Larry Catá Backer on the FNGOML. 

4. Flora Sapio Response to Larry Catá Backer on FNGOML.

This post includes Flora Sapio's Response to Larry Cata Backer's comment, "Walls and the Symbolic Barrier in the Era of Reform and Opening Up."

A Critical Response to "Walls and the Symbolic Barrier in the Era of Reform and Opening Up."
Flora Sapio

In this post, I present a critical evaluation of “Walls and the Symbolic Barrier in the Era of Reform and Opening Up”. While I agree with the first part of the essay, and with the statement that the context of physical and regulatory barriers to the free movement of persons enables to approach the symbolic power of the Foreign NGO Management Law (FNGOML), I see the symbolic power of the FNGOML in a radically different way. My different take on the symbolic power of the FNGOML should not come as a surprise: there exist many different ways to interpret a symbol, as the FNGOML, and different interpretations in turn depend on the exegete's framework of reference.

A core component of the prevailing interpreting framework of Chinese law is the belief that CCP ideology is static. The scleroticism of CCP ideology is what makes it incompatible with the ideologies of Western countries. Much of the Western criticism of CCP ideology, and indirectly the FNGOML, has been premised on these assumptions, or beliefs. Reliance on this interpretive framework produces the reading of the FNGOML that “Walls and the Symbolic Barrier...” offers. The difference between the views expressed by various authors (see here) and media reports (as this one, and this one) and those stated in “Walls and the Symbolic Barrier” are merely rhetorical.

The dynamism and adaptability of CCP ideology are all too well-known. That CCP ideology is dynamic and adaptable does not enable to make predictions, or to project scenarios, as to its possible evolutionary trajectory. Accepting this fact instead enables one to understand the significance of the FNGOML in relation to the changes in CCP ideology, as these changes are taking place now; as they are manifest in the FNGOML; and as they will presumably influence the making of international norms on civil society.

The strength of Western ideologies, and the weakness of the PRC, as such weakness is allegedly signaled by the FNGOML are mere perceptions unsupported by facts. Perceptions can take a life of their own – until the point when they constitute a parallel reality. The creation of a parallel reality, one entirely made of perceptions, is not a problem per se. However, the existence of a divide between perception and reality can be more or less problematic, depending on the observer's goals and priorities. This divide is the most harmful to those who, either in China or in "the West" manage or are employed by development cooperation programs. This constituency includes not only foreign and Chinese CSOs, but also all those who have contributed to drafting the FNGOML. The second part of “Walls and the Symbolic Barrier" seems to suggest that Chinese lawmakers have taken the Western point that CCP ideology is static seriously. And, in drafting the FNGOML they responded to Western perceptions, more than to the the needs of the CCP/PRC, Chinese society, and foreign non-governmental entities.

For the sake of clarity, I am expressing the point in an even simpler language: the enactment of the FNGOML would prove how “the West” has tricked China into making a legislative move that goes against the country's best interest.

I find this hypothesis very difficult to accept, and for the following reasons:

1. It is not true that the FNGOML proves China's lack of confidence in managing its own political space. misrepresents the potential of the FNGOML, which goes well beyond allowing for a “greater engagement with foreigners”.

A “greater engagement with foreigners”, is possible only if legal personality is bestowed on those non-governmental, no-profit organizations established by foreigners either outside of China, or inside of the country. Being recognized as a legal person under the law is a necessary condition for foreign NGOs to exist and operate in China. As I have already pointed out, the FNGOML makes it possible for foreign NGOs to work in China, while before the legal form of “foreign non governmental organizations” was absent from China's law.

If they didn't have legal personality, foreign NGOs would exist and operate in a legal limbo – not too differently from those persons whose fundamental rights are not recognized, once they move to a different country. A life lived in a legal limbo, whether it be the life of an NGO, a company, or a person who has had not other choice but leaving her own country, is a life exposed to the whims and abuses of all those public and private agents who enjoy a minimum of administrative power. The FNGML allows to protect foreign NGOs from the whims of local bureaucrats, as well as public and private security agents. Therefore, it contributes to creating a more stable and predictable environment for social entrepreneurship.

2. It is not true that “it is hard to square the FNGOML with a robust application of the reform and opening up element of the CCP line”.

The reform and opening up element of the CCP line is a composite element, of which Party work is an important part. A better and more effective Party work in NGOs is already being ensured by the Opinion on Party Building in Social Organizations. Under Chapter 9 of the CCP Constitution, Party leading groups or committees must be created in any central or local economic or cultural institution, or non-Party entity. Article 2 of the Opinion further develops this provision, as it mandates the creation of Party Groups in social organizations. “Social organizations” does not designate any specific legal category under Chinese Law. It is an umbrella terms that applies to all non-governmental entities. Neither the Party Constitution nor the Opinion make a distinction between domestic and foreign non-governmental entity. Therefore, the creation of Party group in foreign NGOs will be a natural development, which will check the vested interests of local organs and individuals. As program managers know, sometimes the views, priorities and policies of the Central Party Committee might be misrepresented by local bureaucrats eager to advance their carreer, and further their narrow personal interest at the expense of Chinese and international stakeholders. At times, those interested in getting material and symbolic gain may go as far as providing false representations of their relation to the Chinese Communist Party, and/or its leaders. The creation of Party groups, and their supervision by discipline organs, will curb these and other similar trends.

More importantly, the presence of Party groups in foreign non-governmental organizations will pose an entirely new set of challenges. If met, these challenges will contribute to developing management and regulatory principles and systems. These will in turn contribute to the further development of the Party line and ideology.

3. A state's choice to place a legal entity under the management of public security organs does not suggest civil authorities' weakness, and it does not prove China's inability to suppress foreign NGOs.

Proponents of the view that management by public security organs means that civil affairs organs are weak seem to refer to outsiders' impressions. Outsiders' impressions are what they are: impressions. Those impressions are not shaped by an analysis of the institutional, historical, political, and policy factors that contributed to the making of this institutional arrangement. At minimum, those who see civil affair organs as weak should support their statement with substantial evidence. The choice of placing foreign NGOs under the management of public security organs, rather than civil affairs organs has depended on a variety of institutional, historical, political and policy factors. To date, no systematic analysis of these factors has been produced.

The question of whether management by public security organs means that foreign NGOs are seen as a threat, and therefore they have to be isolated because the state is too weak to suppress them entirely, misses one fundamental point. The power to suppress an unwanted entity does not depend on vague notions as a state's “strenght” or “weakness”. Such power depends only on the power to make legal rules, and to enforce them. Historically, a step preliminary to the suppression of organizations and individuals has been placing those individuals outside of the law, and creating a domestic consensus on their undesirability and dangerousness. China has instead brought foreign NGOs inside of the law, and while domestic media is placing an emphasis on the rights and obligations of NGOs, neither foreign citizens nor foreign NGOs as a group have been portrayed as dangerous, threatening or unwanted.

What is not clear is the reason why a social enterprise should want to subtract itself from the very same monitoring, surveillance and administration that everyone else – companies, citizens and state organs – accepts. Advocacy for different and much less transparent regulatory regime could be interpreted as signalling a will to hide foreign NGOs, their personnel and operation from the eye of the law. A wish to hide may be read as signalling a lack of capacity to operate according to the rules followed by foreign citizens, and foreign for profit enterprises.

Even worse, such an advocacy may be interpreted as testifying to an half-hearted commitment to the value of transparency. MANGO, an NGO focused on strengthening the financial management and accountability of other NGOs, has pointed out how an NGO

must be open about its work, making information about its activities and plans available to relevant stakeholders

According to the anti-bribery principles MANGO has developed with Transparency International

“NGOs need to act, and be seen to act, in a way that is honest and transparent.”

There are many, different ways to act upon the value of transparency - accepting subjection to the same kind of monitoring that already applies to all other legal entities, included Chinese civil society organizations, is one of them.

4. It is not true that FNGOML “isolates civil society elements” and avoids that foreign civil society is embedded into Chinese life.

On the contrary, the FNGOML makes a powerful statement in favor of value pluralism. The FNGOML acknowledges that some of the values expressed by foreign NGOs may not be the same as some the values promoted by the state. The values that inspire the work of foreign NGOs may conflict with those values expressed by the CCP and by the PRC yet, these different systems of values are allowed to exist together.

The FNGOML does not impose the CCP and the PRC value system upon foreign NGOs. In this respect, the FNGOML differs substantially from other legislation that regulates foreign CSOs; attributes political or ideological tasks on foreign social enterprises, and creates political duties that these organizations should fulfil. The most recent and well-known instance of such legislation is given by the Charity Law.

The Charity Law poses no distinction between foreign and Chinese charitable organizations, subjecting both entities to the same legal regime. Under this legal regime, the state has the task to encourage and support the practice of Socialist Core Values, and of the traditional values of China's ethnic peoples (中华民族) by natural persons and legal persons (Article 5, Charity Law). The legal persons who should be encouranged to practice the Socialist Core Values are to be understood as including all charitable organizations (慈善组织, art. 8 Charity Law). Charitable organizations include foreign charitable foundations (基金会) and charitable social service institutions (社会服务机构). It may be objected that the Charity Law does not yet specify how foreign charities should practice the Socialist Core Values, and the traditional values of China's ethnic peoples. This would be a weak objection: a specification of how foreign charitable entities should practice Socialist Core Values is not necessary. The matter has been already regulated by the General Office of the Central Committee of the CCP. It can be imagined that Party groups within foreign and Chinese charitable organizations [Art. 2, art. 5, here] will play a fundamental role in encouraging these entities organizations to live by the standards set by the Twelve Socialist Core Values.

Differently from the Charity Law, a law that has been publicized as opening the door to foreign cooperation, the FNGOML is notable for the lack of provisions that subject foreign NGOs to the duty to promote the Socialist Core Values. The FNGOML has carved out a space of autonomy where foreign NGOs and their personnel are free to promote their own value systems. Interaction beetween the value systems promoted by different foreign NGOs and the value system of the CCP and the State is allowed. Some may believe such interaction to be entirely artificial, in that it does not involve the fundamental fields of political activities (Art. 5, FNGOML). This belief would ignore how a substantial distinction exists between NGOs on the one hand, and political parties or organizations on the other. According to the definition most NGOs give of themselves, NGOs are apolitical, non-partisan actors. Given that they refuse to involve themselves in politics, keeping a rigorously neutral stance, political activity is not one of the goals of NGOs. It is difficult to see how the FNGOML could be criticized for prohibiting an activity that is not among the activities performed by bona fide NGOs. Even more generous provisions have been made for foreign academic organizations (FNGOML, art. 53), which enjoy a distinct regulatory regime.

The hypothesis that the distinction between domestic and foreign NGOs may serve the purpose to create a safe space for the values expressed by foreign NGOs has never been entertained. While those values will have to be expressed in culturally acceptable ways, the acknowledgment that different value systems can exist side by side is important, in light of my next point.

5. It is not true that the FNGOML has established a base line that can be used against China's go Out policies.

On the contrary, the FNGOML contains two very important mechanisms that can be used to support China's Go Out policies. In turn, China's Go Out policies can contribute to shape emerging international norms on civil society.

One of these mechanisms is the value-autonomy given to foreign NGOs, (but not to foreign charitable entities), and their consequent freedom from Party groups' ideological leadership. In short, the Party has retreated to a position where the Party supervises foreign NGOs but it neither micro-manages them, nor does it guide them ideologically. The introduction of a system to supervise and manage the work of foreign NGOs (FNGOML, art. 7) should be welcomed as a sign of greater conformity between China's legal order and the emerging global governance of foreign NGOs. If interaction between the United Nations and NGOs is governed in part through an inter-agency coordination mechanism, there is no reason why a sovereign state should not replicate a similar governance mechanism in trying to govern interaction between public security organs, civil affairs departments, NGOs, local governments and other stakeholders.

The partial retreat of the Party, and the slow introduction of governance mechanisms inspired to those existing at the internatioanl level is a very subtle move. This move will slowly allow Chinese NGOs, and other civil society actors, to absorb the principles of: 1. transparency; 2. accountability; 3. integrity; 4. efficiency; 5. fairness; 6. participation; 7. ownership.

As it has been admitted by Chinese authorities, despite China's long tradition of philanthropy, the NGO sector is still relatively young. The youth of NGOs is not a prerogative of China: in Europe, the emergence of the modern NGO sector can be dated to the period that immediately preceded World War I. Thus, European and China's civil society are of a roughly comparable age.

In absorbing those seven principles, Chinese NGOs will inevitably reinterpret them according to the social and cultural framework where they exist. Given how any act of interpretation is inevitably an act or re-making and re-creating, the effort to understand and use those principles will aid China's contribution to the global governance of NGOs. Such an effort, however, will not be sufficient to turn China from a recipient to a maker of international norms. Other factors will be needed. One of them is given by the Go Out policies China is pursuing.

6. It is not true that the “FNGOML substantially weaken its ability to fulfill the CCP's mandate of moving China to a more prominent role in global affairs.”

The FNGOML ehnhances China's ability to shape, or at least contribute to shaping, the legal forms non-governmental, non profit entities can take outside of China. This mechanism is contained in article 2 of the FNGOML, and it has gone totally unnoticed.

Article 2 states:
This law applies to foreign NGOs carrying out activities within mainland China.
"Foreign NGOs" as used in this law refers to not-for-profit, non-governmental social organizations lawfully established outside mainland China, such as foundations, social groups, and think tank institutions. (Chinalaw)

The FNGOML does not regulate entities established inside of China, according to Chinese legislation on civil society. What the FNGOML does is regulating entities that have been established in the legal systems of foreign countries, and reading foreign legal forms through the lense of China's law. Paragraph 2 of article 2 provides a definition of what NGOs are, and determines what kinds of NGOs can be established outside of China, and be allowed to operate in China.

NGOs are “social organizations” such as foundations, social groups, and think thank institutions.

The legal form of foundations exists in the legislation of EU countries, the US, and Australia. Foundations are regulated both by the Charity Law and the FNGOML. Foreign foundations have a choice of whether to constitute themselves as charitable foundations, or as not-for profit foundations, depending on the regulatory regime they prefer.

The legal forms of social groups (shehui tuanti) and think thanks (zhiku jigou) seem to be specific to Chinese law, and to lack any equivalent in the legislation of EU countries at least. Article 2 does much more than posing a definitional problem. It projects China's legal forms on the legal systems of Russia, Europe, America, and Australia. Foreign NGOs are established in each one of these jurisdictions, according to rellevant legislation. Do the legal forms of 'social organizations', 'social groups' and 'think thank institutions' exist under the law of each one of the EU member states, the US or Australia? 'Social organizations', 'social groups' and 'think tanks' are more likely to exist in Russia's legal system, in the legal systems in the OBOR countries, and of some EU member countries.

The FNGOML has introduced an element of competition among international NGOs. For the moment, the NGOs of Russia and OBOR countries may be favored, which is somewhat consistent with “moving China to a more prominent role in global affairs”. It is possible to imagine that European, American and Australian civil society organizations and groups may constitute themselves under the name of 'social groups', or 'think tank'? After all, in Western countries freedom of association allows the most diverse forms of CSOs to exist, regardless of whether they enjoy legal personality (in some cases), or whether they fit any of the existing legal forms. The emergence, in the West, of civil society organizations roughly modelled after Chinese legal categories would allow such CSOs to operate in China, and circumvent some of the limitations that affect entities as foundations, but perhaps not 'social groups' or 'think thanks' – which seem to be entirely unregulated. Besides, it would allow Western countries to better compete with OBOR countries, and testify to China's increasing global influence.

The answer to the question of “what does the FNGOML do?” is simple. The FNGOML allows foreign NGOs to serve the interest of the state where they chose to run their programs. This is nothing extraordinary: after all, the state is but one of the stakeholders in cooperation programs. Service, after all, is one of the fundamental values that motivate NGOs and their staff to run cooperation programs. The activities prohibited by the FNGOML are, by admission of NGOs themselves, not among the activities normally conducted by organizations that are entirely distinct from the state, but also from political parties, for profit entitities and criminal groups. That the interests of Chinese citizens, beneficiaries, and stakeholders as the state may involve efforts to strengthen China's role in the making of global norms on civil society should be regarded as a natural development of China's global economic clout.

What warrants a 4,000 words response to “Walls and the Symbolic Barrier” is the effort to provide a reading of the symbolic element of the FNGOML that breaks free from those factors that result in the creation of symbolic barriers. Whether these symbolic barriers are barriers erected against foreign NGOs, or a blindfold some are wearing before their eyes is for my readers to decide.