these as well as most TVEs (a large number of which had been privatized), and
a domestic private service sector, collectively produced more than half of
China’s Gross Domestic Product (GDP).
Downsizing of the central government bureaucracy (itself a drag on
economic growth) was a cost of marketizing reforms and economic
devolution, as the state lost revenues from enterprise operations to provinces,
municipalities and counties. It was logical, then, for the state to allow the
formation of social organizations in areas of business, social welfare, gender
equity, health, and especially the environment. Social organizations could
perform myriad functions of benefit to the state. They could disseminate state
policy, educate the public, employ part of the increased surplus labor force (for
example, laid off or retired public sector employees), and assist in the
resolution of social conflict. Moreover, as China’s foreign policy warmed to
international government organizations and as she participated in international
conventions, social associations provided new interfaces for communication
with other countries. Social associations were an indispensable vehicle to trap
economic assistance from foreign governments, international financial
organizations such as the World Bank, and from INGOs.
As the regime introduced economic reforms, it also loosened political
controls over the population. Although the household registration (hukou)
system has remained in effect, individuals have greater freedom to travel
domestically and change jobs and residences. Increasingly, the market and not
government controlled their options for employment, housing, education/
training, and opportunities for self-actualization. Yet social life and in
particular membership in associations remained under government scrutiny.
The continued Leninist regulation of social life is explained not only in
terms of the survival instinct of a party that sees any grouping as potentially in
opposition to the regime, but also a reflection of perceived challenges to state
authority. The Tiananmen incident of 1989, which reflected the organized
efforts of students – joined by labor and other mass elements – to liberalize the
regime, signified the need on the part of the state to closely regulate social
associations. In response, in October 1989, the state issued new regulations for
social associations which required that they be sponsored by an agency of the
state and meet requirements pertaining to their membership and financing.
In 1998, new regulations^28 from the Ministry of Civil Affairs (MOCA)
reinforced the requirement that NGOs be sponsored by a state agency (which
Chinese often refer to as a po po, or mother-in-law, because of the prospect
that the agency will interfere in associational life), and excluded the
opportunity for the social association to register as a business affiliate.
Membership in the group was limited to 50 and it had to demonstrate fiscal
responsibility. A group was required to seek separate registration in each place
it operated, which effectively prohibited the growth of national associations
ENGOs, civil society and biodiversity conservation 171