Lead Article

China’s Society Makes a Comeback

Perhaps the least known “side effect” of China’s rapid economic growth is the wholesale transformation in social structure underway. In early 2002, the Chinese Academy of Social Sciences (CASS) published the first official study of China’s ongoing shift from a homogenous rural society to a much more diverse urban society.[1] The result of a three-year research project by nearly 100 sociologists, the report provides a portrait of an “embryonic modern social structure” and classifies Chinese society into ten occupational strata.

The report was intended to justify President Jiang Zemin’s earlier recommendation that the CCP recruit from the most advanced social groups, including new entrepreneurs.[2]  After a popular reception over several months, however, the report was banned from further circulation due to controversy. Workers and farmers—the traditional constituency of the Chinese Communist Party—were placed near the bottom of the social ladder, while the first four strata (state and social administrators, managers, private business owners, and professional/technical personnel) were praised as “representatives of advanced productive forces.” This ranking fueled speculation that the Party was abandoning the newly poor for the newly rich.

How the political elite manages its complex and fluid relations with all these new social groups and addresses growing income inequalities is probably the most important challenge facing the new leadership coming into power in late 2002. In any case, the secret is out. Fifty years after the CCP nationalized the economy, destroyed all independent social groups and launched a series of experiments to create new state-dominated social organizations, the trend is being reversed.

China Joins the Global “Associational Revolution”

Along with a more open and pluralistic society and a rising middle class has come a proliferation of public institutions, which may number over 200,000.[3] These range from membership-based “social organizations” to private charities and foundations. There are consumer groups as well as chambers of commerce, and advocacy organizations such as environmental and women’s legal aid groups. Few of these nonprofits (NPOs) are truly nongovernmental (NGOs), since the state still exercises strong influence over policy, personnel and finance; however, the trend is toward greater autonomy. This article will focus on organizations that provide social services, the arena most open to faith-based involvement.

Deng Xiaoping’s reform program has aimed at economic efficiency and rapid growth.  Reflecting a global trend to downsize government and free up economies, China set a goal of creating a “small state; large society.” To lighten the heavy load of central state subsidies for social services, this responsibility was given to local governments.  They, in turn, have sought help from the nonstate sector in “burden sharing.”  NPOs have been set up as arms of the state but have also sprung up spontaneously at the grass-roots level.

Pioneer “GONGOS” (a tongue-in-cheek oxymoron for China’s “government-organized NGOs”) were set up by state agencies primarily as affiliates to raise foreign funds, which usually are matched by in kind domestic contributions (labor, land, construction etc.). However, growing competition has forced even China’s top-down NPOs to allow foreign participation, as well as funding, to develop a domestic donor base and, increasingly, to promote the interests of their constituencies, not just state goals.

State-organized institutions

The most influential ones include:

  • China Association of NGOs (CANGOS) was founded in 1991 as an umbrella organization for the nonprofit sector. Its creation was a first step toward separating nonprofit activity from government departments.
  • The China Youth Development Foundation (founded in 1985 by the Communist Youth League) and its leading charity, Project Hope, pioneered domestic fund raising for poor students nationwide. For example, in Xinjiang they helped 40,000 school dropouts return to school and built 76 primary schools and 252 school libraries from 1990-99.[4]
  • China Charity Federation, since 1994 the official “umbrella” organization for relief aid and social welfare, is an arm of the Ministry of Civil Affairs (MCA). Under the leadership of former MCA executive vice president Yan Mingfu, CCF has improved accountability and international recognition for China’s Third Sector as a whole.
  • Amity Foundation since the early 1980s has been a channel for outside funding and services from Protestant religious organizations. Amity is affiliated with the China Christian Council and registered under the Party’s United Front Department. At first, Amity focused on English teaching and eastern China. It now also has departments for rural development, social welfare, medical and health work focused on southwest China. Amity is respected by others in China’s third sector for the quality of its work.[5]

Other Faith-based Chinese NGOs

Small-scale social service agencies are linked directly to local congregations or religious associations. One interesting example is the Signpost Youth Club affiliated with Ningbo’s Catholic diocese in Zhejiang Province. A “virtual” club, it uses the Internet to promote spiritual formation for Catholic youth (ages 18-30) working and studying in different parts of the province.[6]

The YMCA/YWCA in China, headquartered in Shanghai with branches in ten 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.[7]

Charitable efforts by unregistered religious groups often are spontaneous responses to pressing needs out of good conscience. One elderly woman, for example, has taken in abandoned babies but her unregistered Protestant house church has had difficulty buying property or getting permits for an orphanage. Senior leaders of a large partnership of house church networks that met in early 2002 listed such “social ministries” among six top priorities for the Chinese church and invited foreign cooperation.[8]

An example of a registered but independent faith-based organization is the Holy Love Foundation 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 into a boarding school. Board members include a government representative from the bureau of civil affairs, which takes up to one percent of donations. The school has survived several crises with bureaucrats and developers due to the influence of grateful parents and local popularity from winning Special Olympics events.[9]

The International Factor

Outside nonprofits have made major contributions to China’s economic and social development. Authors of the Directory of International NGOS Supporting Work in China (China Development Research Services, 1999) concluded that China was receiving well over $100 million each year in project funding directly from or channeled through international NGOS (INGOs) and foundations. Gifts in kind, such as hundreds of thousands of volumes of books, would add substantially to that total. As of late 1999, there were at least 70 grant-making foundations, 70 advocacy groups, 200 humanitarian organizations, and 150 faith-based charitable groups involved in China. (The latter figure included 100 organizations working through Amity Foundation and therefore is a low estimate.)

Major actors include the Ford and Asia Foundations, which have offices in Beijing through affiliation with the Chinese Academy of Social Sciences. These and other INGOs began in the 1980s to support educational and professional development and exchanges, but branched out in the 1990s to support projects in civil society, law, and governance. The Asia Foundation sponsors monthly forums and a networking website (www.ChinaNPO.net) for the China NPO Network.

Faith-based Contributions.

The third sector has become home to many international faith-based organizations. Many church-based or denominational organizations, such as the Mennonite Central Committee, work in partnership with the Amity Foundation. Most “parachurch” and many church agencies find partners in their special functional sector or “niche.”  For example, several organizations providing teachers of English or professional skills work jointly through the Foreign Experts Bureau and state educational organs. One international institute with expertise in linguistics affiliates with state institutions responsible for minority nationalities. At several grass roots locations they help sponsor dual language schools.

The Jian Hua Foundation, CEDAR Fund, and Caritas have been pioneers among the many humanitarian INGOs that work out of Hong Kong. Along with CBN-China, based in Beijing, they do humanitarian work at all levels through China’s charities federations or Red Cross, and the government bureaus responsible for specific types of projects (see www.cbnchina.org).

Develop the West. 

Many such humanitarian INGOs got their start in providing relief to areas in China struck by disaster in the late 1990s. The Salvation Army and World Vision International (see www.wvi.org), along with Oxfam, are the largest INGOs involved in relief and antipoverty work. They have since expanded support for community development projects as the government has encouraged international participation in its ambitious ten year plan for antipoverty and development work in west China, home to most of China’s poor ethnic minorities.

Some localized efforts have been developed by expatriates responding to warm welcomes where grandparents or parents had served as missionaries. Examples include Evergreen Family Friendship Services in Shanxi Province and Gansu Inc., a US nonprofit that brings ophthalmologists to teach and perform cataract surgery for poor villagers, choosing a different county hospital base each summer.[10]

Regulatory Problems and Corruption

All non-state social organizations are heavily regulated and closely monitored. The red tape gives headaches and teaches patience to all who seek to operate within official boundaries. Specific regulations and style of implementation vary somewhat by sector and locality, but tend to share the following characteristics:

  • There is a dual control system: government registration and functional affiliation. Oversight of most nonprofits is carried out by the Ministry of Civil Affairs, but there are specialized agencies for labor, youth, religious and women’s groups.
  • Day-to-day line supervision is carried out by functional party or government agencies or their designated monopolies. Supervision is comprehensive—approval of application for registration, political and ideological work through Party branches, finance and accounting, personnel management, policy research, and external relations.
  • Before registration, organizations must meet strict standards—such as a designated work place, certified professional staff, a minimum number of members, proof that no other similar local organization already exists and that a “need” for the service is present. (Note that some of these require actions—such as renting, hiring, recruiting—before registration that are technically illegal until afterward.)

Fund raising so far has focused on outside donors; a typical Chinese NPO is funded eighty percent from overseas and twenty percent from Hong Kong. Fund raising inside China is still quite new and for the most part restricted to national GONGOs. While the 1999 law on donations allows individuals and corporations to donate money, it is not clear about the right to solicit funds, including through the state-controlled media. Tax benefits for giving are even more recent.

Like many laws and regulations in China, those for NPOs are so vague, contradictory or burdensome that they end up being circumvented or ignored. Thus, there is a large grey area of semiautonomy and semilegality in which nonprofits “press the envelope” of bureaucratic controls in order to get things done. To gain more freedom, organizations doing nonprofit work often register as businesses or register through personal relationships involving little restriction. All this can lead to either creativity or corruption!

NPOs closely tied to the government are often misused by bureaucratic supervisors scavenging for funds. Many local Charity Federations have a bad reputation, and the YMCA was notorious for corruption and abuse of power under the former director and his family. A huge controversy in 2002 over alleged illegality in Project Hope’s fund-raising efforts has forced more public attention to mechanisms of accountability in the third sector as a whole. Its sponsors at the Youth Development Foundation have requested a formal government audit to prove their innocence.[11] Accountability is a special challenge for unregistered grass-roots humanitarian efforts, given inexperience with management and auditing and the temptations of handling cash or funding through personal accounts. One now successful suburban “halfway house” ministry to “street boys” and handicapped orphans, for example, suffered an early crisis due to the founding director embezzling funds from overseas Chinese Christian supporters.[12]

As a result of all these problems, the Chinese public remains leery of giving. The chronic “catch 22” situations for Chinese NGOs also affect their partnering international NGOs and foundations.  Moreover, the long-delayed regulations for INGO operation in China—promised by the end of 2000—have yet to see the light of day.

NGOs a “Hot Topic”

The study of the nonprofit sector has become an intellectual “fever” in China. Qinghua University has set up China’s first Center for the Study of NGOs as part of its School of Public Policy and Management. The Center sponsored China’s first conference on NPOs in October 1999, and other specialized conferences have followed. The China NPO Network has registered as an enterprise with the Bureau of Industry and Commerce in order to become a for-profit provider of training and information services for the third sector.

The government plans to further privatize social service institutions as well as expand the role of nonprofits. This will expand opportunities to establish not-for-profit schools and hospitals, all of which until recently were solely state owned. In June 2002, the State Office for Public Sector Reform launched a third phase of a joint program begun in 1990 with the United Nations Development Program and China’s International Center for Economic and Technical Exchanges. Their next five year reform effort will redefine nonprofit and public institutions to clarify and strengthen their autonomy and encourage a stronger market role.[13] Policies are being introduced to lift limits on total NPO investment and offer tax breaks or exemptions as well as favorable treatment regarding customs, foreign exchange use and land use rights. As a result, both foreign and domestic corporate donors are becoming more active in philanthropy. Clearly, the structural transformation of Chinese society has just begun.


  1. ^ Lu Xueyi, ed., Dangdai Zhongguo Shehui Jiecheng Yanjiu Baogao (Research Report on Social Strata in Contemporary China), Shehui Kexue Wenxian Chubanshe (Social Sciences Documentation Publishers), January 2002.
  2. ^ See Jiang Zemin, speech at the meeting celebrating the 80th anniversary of the CCP, July 1, 2001, Beijing Review 29, July 19, 2001.
  3. ^  Josephine Ma, “Sect fears put new NGO laws on hold,” South China Morning Post, October 15, 2001.
  4. ^ Xinhua English edition, December 8, 1999.
  5. ^ Author’s interviews with Amity staff in Nanjing and other NGO staff in Beijing and Shanghai, June 2001. See: www.amity foundation.org.
  6. ^ “Young Catholics Explore Internet to Maintain Faith,” UCAN News Service.
  7. ^ Author’s interview with the director of the Asia Foundation office in Beijing, June 2001.
  8. ^ David Wang, “What House Church Leaders Discussed,” Asian Report 249, January/February 2002.
  9. ^ Personal conversations with the directors in Chengdu, 1997, and communication with supporters in the US, 2002.
  10. ^ Author’s interviews in Gansu, November 1997, and in Taiyuan and Yangqu, Shanxi, November 1997 and 2000.
  11. ^  Personal communication with a Project Hope leader, March-April 2002.
  12. ^ Personal communication from a supporter, June 2002.
  13. ^ People’s Daily, June 19, 2002 at www. china.org.cn/english/2002/Jun/34976.htm.
Image credit: China floods 2010 – Oxfam humanitarian relief by PRO Oxfam International via Flickr
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