China Development Brief (Winter 2013 Quarterly)
China has become the world’s second largest economy. Alongside the development of China’s market economy and ‘going out’ strategy, Chinese economic enterprises have internationalized rapidly. However, the internationalization of Chinese NGOs1 remains rudimentary.
Internationalizing China’s NGOs can facilitate a better understanding of the laws, policies, culture, communities, and religion of different countries. It can help Chinese organizations to understand the situation of other countries’ NGOs and establish more partnerships with international organizations. Not only will this enable the development of China’s domestic NGO sector but it will also transmit information and support to China’s internationalizing business sector. Furthermore, the internationalization of NGOs also contributes to national diplomacy by improving interactions, trust, and co-operations between Chinese people and people from other nations. Through doing this is can help to answer the development conundrum posed by Xi Jinping at a press conference after the 18th Party Congress: “how can China better understand the world, and how can the world better understand China”. (“如何让中国更加了解世界，让世界更加了解中国”)
1. Defining the internationalization of NGOs
There is no clear definition of NGOs’ internationalization. There are some similarities shared with the internationalization of business corporations. For example they are both politically and financially independent from the national government, they both have transnational operations, and they both establish headquarters. However the nature of these two kinds of institutions is different: NGOs are non-profit, working on public interest issues on behalf of the international community.2
There are also similar strategies between an NGO’s internationalization and a businesses internationalization. Firstly, they operate on the international level, mainly developing projects based around the international community. Secondly, they have internationalized their organizational structure, which includes internationalizing their finance, human resources, and management. Once again, there are also many differences. These include different stakeholders, product and service models, influence exerted by their consumers, professionalism, and economic and cultural values.3
Models of NGO’s internationalization
There are various models that describe the internationalization of an NGO. The first model depicts how NGOs that are established on the national level develop gradually into regional and international organizations. Following the influence of the globalising economy, these NGOs set up headquarters in their home countries, and then branch out into other countries and regions. Another model focuses on the fact that NGOs establish partnerships with international organizations and local civil society, participating in international affairs and facilitating the internationalization of their organization. A third model is that NGOs operate projects and establish administrative offices overseas, localizing their management system. Finally another model is that NGOs expand their international co-operation partnerships by conducting regional and international research.
To summarize, these four models explain how by taking advantage of international networks and co-operations, the localization of professional talent, and the participation in international affairs, NGOs can internationalize, break free of the political influence of developed nations and enhance civil society’s participation in international affairs.
The main features of an NGO’s internationalization
Internationalizing NGO’s go from focusing on domestic affairs to international affairs and then gradually to becoming a truly international advocate and activist. From a historical point of view, the internationalization of NGO’s has developed its own special features based on the following: 1) when participating in international affairs, NGOs are influenced by donors; 2) the expansion of an NGO’s network is affected by its development stage; 3) NGOs participate in international affairs with opinions and voices that are often confrontational to both government and business enterprises; 4) autonomous alliances are formed through the participation of NGOs in international affairs; and 5) the power of civil society’s participation in international affairs and international aid has changed fundamentally. Although of course the features of NGO’s internationalization varies across different countries, the current challenges remain the relationships between NGOs and governments, NGOs and business, and NGOs and their own self-regulation and alliances.
The current situation of Chinese NGOs’ internationalization
Chinese NGOs have rarely participated in international affairs. According to a 2012 statistical report on the development of social services published by the Ministry of Civil Affairs, 556 Chinese NGOs were involved in international affairs. This represented just 0.11% of the total of 499,000 registered NGOs in China (called “social organizations”, 社会组织). Of these 556 NGOs, 499 were Social Associations (社会团体), 49 were Civil Non-enterprise Institutions (民办非企业单位), and 8 were foundations (基金会). These figures respectively counted for 0.18%, 0.22%, and 0.26% of the total amount of these types of organization in 2012. According to data from the China Foundation Centre, as of the 7th October 2013 China had 51 foundations that ran international projects, just 1.50% of a total of 3399 foundations. This included 34 public foundations (2.49% of the total of 1368), and 17 non-public fundraising foundations (0.84% of the total of 2013).
The participation of Chinese NGO’s in international affairs can be said to display four features: 1) Chinese NGOs have started engaging in international humanitarian aid; 2) Chinese NGOs have actively expressed their voices through direct membership in international NGOs, establishing networks between local and overseas NGOs and through participating in international affairs through co-operative projects; 3) Chinese NGO have strengthened co-operation with NGOs in developing countries; and 4) Chinese NGOs have actively cooperated with businesses to participate in international aid-giving.
2. SWOT analysis of the internationalization of Chinese NGOs
The first part of our survey looked at the “external environment” of Chinese NGOs’ internationalization. It focused on 11 areas. According to the responses we can see that the opportunities for developing Chinese NGO’s internationalization can be described as “political environment”, “economic environment”, “cultural environment”, “international organizations”, “international environment” and “public attitudes”. The challenges were described as “legal environment”, “policy environment”, “international relations”, “foreign organizations”, and “localized partnerships”. According to the responses, the strengths outweigh the challenges.
We also analyzed the “internal environment” of Chinese NGOs’ internationalization. As the chart below shows, five indicators represented weaknesses: “internal management system”, “leadership”, “professional staff”, “financial resources”, and “international experience” [listed in order of appearance in the chart below]. All five were described as deficiencies. This reflects the overall development of Chinese NGOs, and the results are echoed in Professor Wang Ming’s book “社会组织纲论” [click here to view].
Main hurdles to internationalization
With the rapid growth of the Chinese economy, the Chinese state has accomplished great diplomatic achievements and Chinese businesses have successfully followed their ‘going out’ strategy. However, the effective participation of China’s NGO’s in this ‘soft power’ initiative has encountered five major hurdles:
- the dual management system constrains the development of NGO’s internationalization;
- the lack of policy impedes social organizations, private non-enterprise, and foundations from establishing overseas offices or branches. The relevant approval processes and methods are also lacking;
- narrow ideas, small scope, and insufficient funding limit Chinese NGO’s participation in international affairs.
- there is a shortage of professional staff;
- governmental funding of Chinese NGOs is insufficient.
3. Strategies, co-operation models, and priorities of Chinese NGOs’ internationalization
Analysis of strategies
- According to the results from our survey, there are four feasible strategies for internationalizing Chinese NGOs:
- strengthening their co-operation and exchange with overseas NGOs. Two kinds of overseas NGOs are highlighted in this process: firstly, Chinese NGOs establish distance partnerships with local overseas NGOs (that remain in their country of origin), developing exchange programs and co-operations with them; secondly, Chinese NGOs co-operate with overseas NGOs that operate in China;
- participating in the UN multilateral system;
- participating in international conferences. Chinese NGO’s participation in international conferences creates opportunities for them to get involved in activities held by international organizations and overseas NGOs; participate in official international aid operations.
Analysis of cooperation models
Based on those four strategies proposed above, five co-operation models are suggested:
- ‘local partnership’ [属地伙伴] model: Chinese NGOs establish long-term partnerships with local overseas NGOs [in their country of origin] which supports the internationalization of the Chinese NGO.
- ‘NGO operated, Government funded’ [民办官助] model: Chinese NGOs run programs overseas that the government supports through overseas aid funding.
- ‘NGO-enterprise co-operation’ [社办联企] model: NGO run projects and then co-operate with internationalized Chinese enterprise, using networks with the international community, local NGO, and communities to achieve a “win-win” outcome.
- ‘Borrowing the boat to go to sea’ [借船出海] model: Chinese NGOs develop themselves by learning from the experiences and networks acquired from existing partnerships with international NGOs and UN multilateral organizations.
- ‘NGO-Media co-operation’ [社媒合作] model: through media, especially new media, Chinese NGOs gain international vision, which advances their ‘going out’ strategy.
Analysis of priorities
We asked those who took part in our survey about which type of projects they would list as “priorities” to work on overseas: “business service”, “agricultural and rural development”, “scientific research”, “education”, “sanitation”, “culture”, “sports”, “environment”, “social service”, “law”, “religion”, and “employment”. The results were encouraging and seven types of work received over 60% of support (listed in order of highest response): ecological environment, education, social service, sanitation, scientific research, culture, and agricultural and rural development. The five types of work that received less than 60% of support were (listed in order of highest response): employment-supporting, law, sports, business service and religion. Although “social service” [社会服务] achieved a rate of 74.19%, it is difficult to define what constitutes “social service”. Therefore, our research team suggested that more attention should be paid on facilitating internationalization for organizations working on environment, education, health, scientific research, culture and agricultural and rural development.
4. Policy recommendations for Chinese NGOs’ internationalization
The internationalization of Chinese NGOs is a significant part of Chinese soft power, and a long-term goal for those Chinese organizations’ that already participate in giving foreign aid. To achieve this not only requires the consideration of future long-term policy and legislation, but also research on current policies. We make the following three recommendations:
Recommendations on long-term policy and legislation
From a long-term strategic point of view, we need to consider legislating for Chinese NGO’s participation in foreign aid. As soon as possible The Ministry of Commerce, along with the Ministry of Foreign Affairs, Ministry of Finance, the International Department, Ministry of Civil Affairs, and other Party and government offices, should formulate specific laws and regulations for Chinese NGOs to participate in foreign aid. We need to develop a legal foundation for internationalizing Chinese NGOs to ensure that they receive legal protection when they ‘go out’.
Coordinating organizations should also be established at the ministerial level to internationalize Chinese NGOs. The current coordinating system for foreign aid at the ministerial level can be used. Special offices should be set up at the Ministry of Civil Affairs that coordinate with the Ministry of Commerce, Ministry of Foreign Affairs, Ministry of Civil Affairs,the International Department, Ministry of Human Resources and Social Security, Ministry of Finance, the National Tax Administration, State Administration of Foreign Exchange, and the General Administration of Customs.
NGO internationalization should be further strengthened by policy research, high-level planning, and national-level comparative studies, using social science research to guide policy theories. The government can assign academics and national think tanks to study how to adopt suitable strategies.
Policy mechanisms related to the government’s current outsourcing of social services to domestic NGOs should also be studied. In the spirit of the guiding opinions issued by the General Office of the State Council, the Ministry of Commerce should take the lead to cooperate with the Ministry of Finance, Ministry of Civil Affairs, the National Development and Reform Commission, and other government organizations to establish a service-contracting system for China’s foreign aid.
Long-term plans for NGO’s internationalization should be formulated. Special funds should be set up within future national foreign aid budgets to support Chinese NGOs and assist them in running projects overseas. A co-funded model between government and non-government can be used. NGOs can operate the projects while the government can work as a supervisory agency, assisting in financial management and ensuring funds are used correctly.
Policy recommendations for near-future work
Articles about NGO participation in foreign aid should be added into China’s “Regulations on the Management of Foreign Aid”, enabling Chinese NGOs to operate by rules and regulations that better develop their internationalization and forge a “NGO-Operated, Government-funded” model. The Ministry of Commerce should establish a special agency to contact with foreign aid and draft new rules and regulations for NGOs to take part in foreign aid, building up a raft of mechanisms for cooperation, exchange, and communication.
The Ministry of Civil Affairs should delegate power for authorising an NGO’s participation in overseas aid to the management board of the NGO or to a mechanism that has been established by that board (the NGO should still submit documents for filing with MOCA and it’s professional supervisory unit). MOCA should also formulate policies, and improve existing rules and regulations for overseas NGO working in China to encourage co-operation between local Chinese NGOs and overseas NGOs in China. This cooperation will form a component of the strategic alliances and support systems for the internationalization of Chinese NGOs.
Elsewhere, the State Administration of Foreign Exchange should simplify the procedure of donating funds and reduce the approvals required for exchange-rate management for NGOs that are internationalizing. The Ministry of Human Resources and Social Security should give the power to establish salary pay scales to an internationalizing NGO’s management board. Finally, the State Administration of Taxation should be advised to cut individual income tax for NGO staff, treating their income the same as the income of diplomatic staff. This will reduce double taxation and encourage NGOs to internationalize.
Recommendations for NGOs
The internal governance structure of NGOs should be standardised and strategic research for NGOs’ participation in international affairs should be strengthened. Opportunities and challenges encountered in the process of an NGO’s internationalization should be analyzed according to China’s own circumstances and feasible development solutions should be proposed. These should enable Chinese NGOs to integrate into the overall framework of China’s diplomacy, and thereby improve the projection of Chinese soft power.
The capacity of NGOs’ to participate in internationalization should be enhanced through capacity-building measures. Utilizing funding from governmental service contracting, a group of outstanding NGOs can be selected for fast-track internationalization. This group should be encouraged to develop their international communication, humanitarian aid, and human resource management skills, and thus gradually expand their scope and gain experience. A group of newly-established non-public fundraising foundations should also be encouraged to develop international exchanges and co-operatative projects. At the same time they should also compete to gain funding and support from government sources.
NGOs’ human resources should be strengthened and the overall quality of personnel should be enhanced. NGOs should take appropriate measures to improve staff salaries and equip them with the necessary knowledge on foreign affairs, communication, presentation, and social activities. This can be further improved through participation in international exchange programs. NGOs’ capacity-building measures should also be developed to guarantee their legitimacy, transparency, and accountability. Special focus should be given to their management, creation and innovation, and implementation and sustainability capacities.
Chinese NGOs should be encouraged and supported to become members of international organizations, and to expand their networks and co-operations with established international organizations, and forge exchange and communication relationships with NGOs in developed and developing countries. Three aspects should be considered: first of all, lessons should be learned from the experience of NGOs in developing countries; secondly, in order to improve research, the historical experience of expanding and developing NGO sectors within developing countries should be drawn upon, especially Asian countries like the Philippines, India, Sri Lanka, and former socialist Eastern European countries; thirdly, Chinese participants should join international and regional NGO alliances and the committees and working groups of international organizations and international NGOs. Think-tanks and coordinating organizations should be established to offer more advice and services to the management departments of national NGOs. Research should be developed to study cultural differences, development strategies, NGO’s self- and mutual-regulation, and development trajectories.
Overall, the successful internationalization of Chinese NGOs requires both support from government, business, society, international NGOs and international organizations, as well as self-development within NGOs through mutual learning, cooperation through exchanges, and development through competition. Only then will we see Chinese NGOs playing a significant role in international affairs and contributing to the advance of Chinese soft power.
The author refers to “social organizations” (社会组织) throughout this article, not “NGOs”. By doing so he is referring to organizations that are registered with the Ministry of Civil Affairs. We have translated the term as “NGOs” ↩
S. Hobb, Global Challenge to Statehood: The Increasingly Important Role of NGO”, 5, Indiana Journal of Global Legal Studies, 1997, pp 191-207. ↩
黄浩明.非营利组织战略管理[M].北京：中国人民大学出版社， 2003.4-5 ↩