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China quietly launches probe of foreign non-government outfits: media

China quietly launches probe of foreign non-government outfits: media

6:18am EDT

BEIJING (Reuters) – China has quietly begun a probe into the operations of foreign non-government bodies in the country, to prepare for tighter regulations in future, as part of a security drive ordered by a new national panel headed by President Xi Jinping.

Non-government organizations have mushroomed in China in recent years, and can have a confrontational relationship with the government, especially if they work with sensitive groups, such as sex workers or drug addicts.

Many foreign NGOs also operate in China, though they have traditionally registered as businesses as the approval process is easier. Beijing has treated some of them with suspicion, worried they may try and spread foreign values.

While the government requires all NGOs in China to register with it, the process is often difficult, driving many Chinese and foreign NGOs to operate under the radar.

The probe into the activities of foreign NGOs emerged after a website of the Yuncheng city government in the northern province of Shanxi published details this week, apparently inadvertently, which were picked up by Chinese media on Friday.

The national security commission has ordered a “nationwide comprehensive and thorough investigation of overseas NGOs and their activities, to find out the basic situation,” the city government said in the notice.

The move is intended to lay the foundation for strengthening and standardizing management as the next step, it said, adding that the campaign begun in May will run until the end of July.

The posting was removed after Chinese media, including the website of the influential magazine Caijing, drew attention to the plan.

The survey of overseas NGOs must be conducted in a responsible fashion to “safeguard the security of the national political system and social stability,” the notice said.

The national security commission was only unveiled last year, and serves as a key tool for Xi’s administration to coordinate responses to domestic and foreign security challenges, including social unrest.

Authorities in at least four other locations have announced similar plans to probe foreign NGOs.

In an urgent notice on their website last week, education authorities in Pinghe county of southeastern Fujian province demanded that schools and kindergartens do a full survey of the overseas NGOs with which they or their employees and students work.

The southern province of Guangdong announced in April that it would launch a survey of social bodies and overseas NGOs to gather information, and ease regulation of their activities.

Xi’s government has launched a sweeping crackdown on freedom of expression and association since coming to power last year, including the jailing of anti-corruption activists who have pushed for officials to disclose their assets.

 

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KB Kee is the Managing Editor of the Moat Report Asia (www.moatreport.com), a research service focused exclusively on highlighting undervalued wide-moat businesses in Asia; subscribers from North America, Europe, the Oceania and Asia include professional value investors with over $20 billion in asset under management in equities, some of the world’s biggest secretive global hedge fund giants, and savvy private individual investors who are lifelong learners in the art of value investing. KB has been rooted in the principles of value investing for over a decade as an analyst in Asian capital markets. He was head of research and fund manager at a Singapore-based value investment firm. As a member of the investment committee, he helped the firm’s Asia-focused equity funds significantly outperform the benchmark index. He was previously the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. KB has trained CEOs, entrepreneurs, CFOs, management executives in business strategy, value investing, macroeconomic and industry trends, and detecting accounting frauds in Singapore, HK and China. KB was a faculty (accounting) at SMU teaching accounting courses. KB is currently the Chief Investment Officer at an ASX-listed investment holdings company since September 2015, helping to manage the listed Asian equities investments in the Hidden Champions Fund. Disclaimer: This article is for discussion purposes only and does not constitute an offer, recommendation or solicitation to buy or sell any investments, securities, futures or options. All articles in the website reflect the personal opinions of the writer.

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