Legacies of the Decoupling of Chinese Associations

A special contributor to Boardroom, Olivia Jia, Senior Manager of IME Consulting Co., Ltd. and publisher of the ‘China Social Organisation’ magazine, reflects on the specificities of working with associations in China.

 The first international conference held in China was the Peking Scientific Symposium in 1964 with 367 delegates, which had more of a political aspect. After the reform in 1978, China moved to join many international associations and set up several national trade associations. As a result, several international association congresses were organised with the support of the state government, such as the World Conference on Women in 1995 and the International Postal Congress in 1996. However, 1996 saw the end of this opening towards the world for the country as the State Council enforced a notice according to which there was a hold over international conferences in China.

The reason for this was twofold; firstly, it was financially challenging since most of the international congresses held in China as well as the expenses of local attendees were both sponsored by the local government. Secondly, for the duration of a conference there was not enough time for the heads of the Chinese associations, who normally also served as ministers or other kind of government officials at the time, to perform their official duties.

Finding the right local partner is key

Fifteen years later, in 2011, and with the approval of the State Council, the Ministry of Finance and the Ministry of Foreign Affairs jointly issued the notice on the strict control of international conferences in China, emphasizing again that all of the international conferences held there would fall under the jurisdiction of Foreign Affairs, hence requiring approval from the government in advance. The notice went further to ensure that no foreign organisation could hold a conference in China without collaborating with a local partner, namely state organs, people’s organisations, institutions or social organisations. A smart move as local partners could help benefit the industry of China.

Taking into account this recent restriction, it became important to choose the right local partner in order to get the permit to hold an international conference. Several umbrella associations, such as China Association for Science and Technology (CAST) & Chinese Medical Association (CMA) ,cooperated quite actively with their international counterparts securing their congress in China. In fact, by the end of June 2017, there were over 725,000 social organisations in China including 344,000 trade associations and chambers of commerce, 375,000 private non-enterprise organisations and 5,900 foundations who could serve as your local partner.

The new face of associations

In July 2015, the Central Party of China Committee and the State Council issued the “Overall Plan for Decoupling the Trade Association Chamber of Commerce from the Administration” declaring that the former should be separated from their executive branch by the end of 2018. This separation included 5 different aspects: separation of organisations, functions, assets from finance, personnel management and also separation of party building and foreign affairs. This new plan resulted in more market-oriented associations. Through a process of self-improvement, they managed to get closer to their members’ interests in an effort to be more active in the market economy. Adjusting to the Belt and Road Initiative (BRI), the decoupled associations became more active and open for communication when facing the international market.

As the international department of the ‘China Social Organisation’ magazine, we are supported by the Ministry of Civil Affairs of China and organised by the China Association for Non-Profit Organisation (CANPO). Our main readers are over 100,000 Chinese social organisations, including trade associations & the Chamber of Commerce, as well as private non-enterprise units and foundations. That is why, since the beginning of last year, more and more national associations come to us with various questions concerning their international business on, for instance, how to organise international sessions during congresses, how to invite international speakers or even how to bid for an international conference.

Tricky business

With most of Chinese associations built from the top down – with few exceptions which are built spontaneously – the majority of their headquarters, especially within national associations, are based in Beijing. This is mainly due to the fact that most of the country’s administration offices are located in the area.

As a case study proves, we now have three national liquor industry associations originating from the former Ministry of Light Industry, the former Ministry of Trade and the liquor specialised committee of China Food Industry association. This phenomenon of recurring associations also exists in other industries due to lack of communication between them. It is the result of China’s long-term implementation of departmentalised management, meaning that, in the past, an industry had a number of government departments to handle, which in turn built up industry associations for their own purposes during the process of reform. It is then crucial to be clear which government department an association belongs to.

Further reading: Filing for NGO temporary activities

  • Application conditions: If an overseas NGO has not established a representative office in China, but intends to carry out temporary activities, the NGO needs to have been legally established abroad; and will cooperate with the state organs, people’s organization, institutions and social organisations of China.
  • Application materials: Overseas NGO Representative Office Registration Form/ Provisional Activities Filing Registration Form; documents and materials proving that the NGO has been legally established overseas; “Articles of Association” of the overseas NGO; materials proving its existence for more than two years and its activities abroad; the name, purpose, geographical area and duration of the specific provisional activity.
  • Timeline: Filing the application 5 months in advance: for a conference of over 100 international delegates or for a total delegate number of over 400; for a science and technology conference, with over 300 international delegates or for a total delegate number of over 800; for a conference where ministers or higher level foreign officials or former heads of state attend the event (for any other international events, the application should be filed 3 months in advance).

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