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A stringent new law regulating foreign nongovernmental organizations in China could potentially constrain the activities of overseas higher education institutions in a variety of ways.

The law, approved by China’s legislature late last month, requires foreign NGOs conducting activities in mainland China to register with police agencies and to operate under the supervision of approved Chinese sponsoring organizations. The law requires foreign NGOs engaging in activities in mainland China to either conduct them through registered representative offices or register activities of a temporary nature with Chinese partner entities that agree to serve as sponsors.

The law, which critics contend gives overly broad latitude to the police authorities charged with enforcing it, has been widely seen as chilling by foreign NGOs and some governments. U.S. Secretary of State John Kerry issued an April 28 statement expressing his deep concern that the law “will negatively impact important people-to-people ties between our two countries and the development of civil society in China.”

While noting that the final version of the law includes improvements from the original draft, Kerry said it nonetheless “creates a highly uncertain and potentially hostile environment for foreign nonprofit, nongovernmental organizations and their Chinese partners that will no doubt discourage activities and initiatives.”

It’s not just foreign NGOs in the traditional sense -- nonprofits like Amnesty International or Greenpeace -- that are facing a “highly uncertain and potentially hostile” regulatory environment in China. Experts say the vagueness of the law, which goes into effect Jan. 1, leaves many unanswered questions for foreign, nonprofit universities conducting activities in China.

The Relevant Provisions

First, a primer regarding the provisions of the law that directly or indirectly address its scope with regard to foreign universities. The following excerpts are quoted from an unofficial translation of the law by China Law Translate. (The official Chinese text, for readers of Mandarin, is available here.)

Article 2 of the law defines foreign NGOs as “not-for-profit, nongovernmental social organizations lawfully established outside mainland China, such as foundations, social groups and think tank institutions.” Universities can take heart they’re not explicitly included on the list, but the “such as” formulation underscores the fact that they’re not explicitly excluded, either. A different translation, done in-house by the multinational law firm Hogan Lovells, adds an “etc.” at the end of the above list (after “think tanks”).

Article 53 of the law -- the second-to-last provision -- refers explicitly to foreign schools and suggests that certain forms of educational exchange or cooperative activities, at least, could be exempt from the registration requirements of the foreign NGO law and governed by other laws instead. The two-paragraph article reads:

“Where foreign schools, hospitals, natural science and engineering technology research institutions, or academic organizations carry out exchanges or cooperation with mainland Chinese schools, hospitals, natural science and engineering technology research institutions, or academic organizations, it is handled according to the relevant national provisions.”

“Where activities carried out within mainland China by foreign schools, hospitals, institutions and organizations specified in the preceding paragraph violate Article 5 of this law, legal responsibility is pursued in accordance with law.”

Thus Article 53 brings the reader back to Article 5, which stipulates that “foreign NGOs carrying out activities within mainland China shall abide by Chinese laws; must not endanger China's national unity, security or ethnic unity; and must not harm China's national interests, societal public interest and the lawful rights and interests of citizens, legal persons and other organizations.”

Article 5 also bars foreign NGOs within mainland China from engaging in or funding for-profit, political or religious activities.

A group of United Nations human rights experts said in a statement that the “broadly crafted restrictions” of Article 5 “fail to comply with international human rights norms and standards relating to freedom of association and freedom of expression.” The human rights experts also observed that the failure to define “political activities” in the law opens the way for arbitrary or broad interpretations.

The Questions

The text of the law raises a number of questions for foreign universities.

“Right off the bat we’re asking the question, what is within the realm of activities defined as exchanges and cooperation?” said Xinning Shirley Liu, who, as president of the Florida-based XL Law and Consulting, regularly advises universities about their activities in China.

In a post for the National Association of College and Universities Listserv, Liu wrote that it appears from the text of the law “that certain academic ‘exchanges and cooperation’ between Chinese and foreign schools, hospitals and research institutes would continue to be governed by existing laws, and thereby exempted from this new law. For foreign colleges and universities, this likely includes Chinese-foreign cooperatively run schools and programs, which will continue to be regulated by the 2003 Regulation on Chinese Foreign Cooperation in Operating Schools and its 2004 implementation measures. Those programs aside, needless to say, much clarification is still lacking on what activities fall under ‘exchanges and cooperation.’”

Liu wrote that “gray areas for colleges and universities include those programs between foreign schools and Chinese entities who do not operate schools (e.g., third-party providers of study abroad programs or student internships), and unilateral programs of foreign schools (e.g., a faculty-led short-term summer program that is organized without affiliation with any Chinese partner).”

Steven N. Robinson, a partner and head of the education practice in China for Hogan Lovells, has flagged the question of whether the law could affect the ability of foreign universities to freely engage in incidental activities -- things like alumni gatherings or even student recruiting. A Hogan Lovells analysis of the law's possible impact on schools, hospitals, research institutions and academic organizations asks the question: "Is a foreign university that comes to China to recruit, or to have liaison meetings with its alumni, required to either register as a representative office of a foreign NGO (not likely for only incidental activities) or work with a Chinese cooperative body and secure an approval and record filing for temporary activities from relevant Chinese authorities (likely difficult to obtain)?"

Other questions Robinson identified speak to the prohibition in Article 5 on for-profit activities -- would that apply to, say, a profit-generating executive education program that a foreign university might run in China? -- and the way in which wholly foreign-owned enterprises, or WFOEs, a type of corporation that some foreign universities have established in China, might fit into the regulatory regime. The law also bars foreign NGOs from fund-raising within mainland China, and Robinson said it’s unclear whether that’s intended to apply to universities.

The good news, Robinson said, is that the law is not effective until Jan. 1. “Hopefully there’s some time to sort some of these things out,” he said. “There will need to be implementing rules for this whole regime to work. That’s typical of a lot of laws in China -- first the law comes out and then the implementing rules come out. Whether they’ll clarify things enough in those to deal with the concerns people have we’re not sure.”

The Context

A Chinese state media report published May 4 notes that the Ministry of Public Security “has promised to work out detailed protocols and publish this code of conduct as quickly as possible so that overseas NGOs will have enough time to prepare for registration.”

“When the new law takes effect in January, overseas NGOs will walk out of the shadow they have long stood in,” the report from the news outlet Xinhua said. “Those with solid reasons to operate in China will have a legal identity, a clear code of conduct and protection of their rights and interests from the government and legal system. They will also be subject to supervision, just like their domestic counterparts are.”

The Xinhua report objected to characterizations of the registration and regulation system as “a hostile setup,” describing it instead as “a pragmatic arrangement to ensure an efficient and professional service.”

China's foreign NGO law was first introduced as part of a suite of three bills focused on national security and counterterrorism. It was passed at a time of tightening political controls and heightened suspicion of Western influences within China, including in the higher education sphere.

“Universities are not the direct target of this particular law, but some of the projects that universities are engaged in could easily be collateral damage. I don’t think it’s unintentional,” said Carl Minzner, a professor of law at Fordham University and an expert on Chinese law.

Minzner said he worries about a potential “chilling effect where U.S. schools decide out of self-preservation to limit their presence in China because they're worried about the potential impact. That is a very real possibility.”

“The reaction I hear from Chinese authorities is ‘don’t worry, this won’t be used against you.’ I’m not sure they understand that many U.S. actors, general counsels for U.S. schools, would say because we’re uncertain about where the line is we would rather not take the risk.”

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