For a long time, the Chinese laws created barriers to the registration of NGOs. Many charitable organizations remained unregistered and operated in a legal grey area. Without legal protection, they encountered difficulties in conducting activities, especially fundraising. Philanthropy, like most areas of activity, is also now global and China's old law made it difficult for foreign charitable organizations to operate in China and for Chinese charities to engage and benefit fully from this international network.

Under the new law, permission for these groups to be registered takes place directly with the government departments in charge of civil affairs above the county level. This, and a simplified reporting process, are significant advances and provide greater transparency. It should lead to more unincorporated associations qualifying as legally protected charities.

Furthermore, the number of organizations allowed to register in one administrative area seems no longer to be restricted. These improvements not only simplify the registration procedure, but also will promote more effective NGOs.

Eventually, the new law will open up the private philanthropy sector and break the present monopoly of government organized or connected NGOs. However, those charitable organizations without previous privileged status will not be eligible for fundraising certificates until they satisfy a two-year waiting period after getting registered, plus proving their compliance with the charity law. Given the need and urgency for reform some argue this is overly cautious.

Although criticized as too broadly drafted in terms of vague principles, the tax provisions of the new law are also an important component of the new legal regime. It will hopefully encourage and provide greater certainty to donors and the charities themselves and lead to rapid and confident growth in this important sector. To ensure this happens, however, will require subsequent enactment of detailed regulations and cooperation among the relevant departments.

In both West and East, the philanthropic sector has too often been ignored, poorly understood and underappreciated. Yet, as the poet Henry Wadsworth Longfellow reminds us, "The life of a man consists not in seeing visions and in dreaming dreams, but in active charity and in willing service."

Eugene Clark is a columnist with China.org.cn. For more information please visit:

http://www.ccgp-fushun.com/opinion/eugeneclark.htm

Quenna Jiayi Li is a Chinese lawyer, an MPA graduate from University of Technology Sydney and student at Sydney City School of Law

Opinion articles reflect the views of their authors only, not necessarily those of China.org.cn.