A Land Where Charity Is Illegal

I still subscribe to the hoary conventional wisdom that increasing prosperity will, if it happens, lead to further liberalization of the Chinese political system. Gordon Chang’s account of why China’s new rich are so stingy with their charitable donations is a nice illustration of why:

But an overriding reason explains why charity barely exists in contemporary China: The Communist Party makes giving difficult. Why? The Party wants no competitors, especially organized ones. Charities, therefore, have to find government sponsors before they can register with the Ministry of Civil Affairs, and this requirement severely limits the number of them. Even Hollywood action star Jet Li, a favorite of Beijing because he makes “patriotic” films, cannot register his One Foundation, which may have to suspend operations soon.

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Don’t be surprised that as of last year there were, in all of China, only 643 foundations not run by the government. There were an estimated 300,000 so-called grassroots organizations that were operating without registering, or had registered as business enterprises. Such organizations, functioning in a highly unorthodox manner, invariably find it hard to raise funds, in part because donors cannot obtain tax deductions for contributions to them.

This seems on its face like an untenable situation. In a non-totalitarian society where you have rich businessmen, a public sphere in which issues are discussed, and some measure of open competition between political leaders a rule aimed at discouraging rich people from giving back to their community is not going to hold up forever. But the concern that a stronger NGO sector will weaken the political authorities’ grasp is perfectly reasonable.

Of course just because the current equilibrium is untenable doesn’t mean it will be replaced with a better one.