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China 2.0

In China, Why Even Some NGOs Are Counterfeit

Chinese President Xi Jinping meets delegates attending the 10th general congress of the Red Cross Society of China in Beijing.
Chinese President Xi Jinping meets delegates attending the 10th general congress of the Red Cross Society of China in Beijing.
Hu Jiayuan

BEIJING — China's copycat culture is so deeply ingrained that along with the mock mobile phones, counterfeit clothing and faux food packaging, there is also an abundance of supposedly civic minded NGOs that are also effectively counterfeit knock-offs.

Last week, the Chinese Ministry of Civil Affairs published a list of 203 illegitimate civil society organizations. Most of these so-called associations use the words "China," "Chinese" or "National" in their title. They exist in various sectors, including medicine, education and food services. And some even duplicate letter-by-letter the names of legal organizations that have been properly registered.

The exposure has opened these phony organizations to a heap of criticism. It is also prompting the legitimate associations — the ones who've had their names unfairly absconded — to have to defend their innocence.

There is no doubt that the lawless associations exist mainly for the purpose of extorting money, including fees for membership, licensing or for conducting training courses. Other tricks include blackmail, or giving out supposedly important awards and prizes. They often target companies, but also individuals.

Some people are fooled by the gimmicks. But others willingly play along so that they can meet whoever they want to meet, appear in photos with powerful officials, or obtain certificates and awards that may boost their careers or business. From their perspective, the legitimate and illegitimate associations serve the same purpose.

If that is indeed the case, then China's formal associations ought to take a hard look at themselves too. It is obviously a good thing that the Ministry of Civil Affairs is looking into the situation and cracking down on illegal organizations. But we should take this opportunity to ask why people are so drawn to them in the first place?

Drawn to power

The answer is that people believe that joining an association — any association — will always win the favor of power and attract the benefits that come from closer proximity to the core of official authority. The informal organizations feed off that illusion, but they didn't create it. The real source are the legal, though not necessarily law-abiding, associations.

As noted in the 2014 National Audit Office's annual report, certain associations and their affiliates rely on the administrative resources of central government departments to demand non-compliance fees, to give out appraisal standards or to provide paid information. Take the Chinese Medical Association for example. Between 2012-2013, it organized 160 academic conferences and received as much as 820 million RMB ($123 million) of sponsorship from pharmaceutical companies.

A member of the Chinese People Consultative Conference said during the group's recent annual meeting that some technology startups join as many as 17 different associations, either actively or passively. Doing so means shelling out big money for services that rarely are worth such steep fees. So why pay? Because associations often act as intermediaries for meeting with powerful businessmen or officials who can influence government policy.

If even legitimate associations collude with power and ignore their own duty, or act as mercenaries, then it is little wonder that illegal associations will step in and follow suit.

In order to rectify this trend, the State Council already launched a program last year to keep government officials away from chamber of commerce and industry associations. It's not at all rare, the project bluntly pointed out, for officials to be too close to certain associations and ignore their supervisory duties.

The underlying problem, of course, is that China's governmental intervention in the private sector is omnipresent. The result is that people worship power, and have a contempt for the law of the market. In that sense, associations — legal and illegal alike — are simply assistants to the authorities.

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