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Foundations and NGOs: CAI paragraph causes concern
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China’s sometimes thuggish approach to foreign NGOs and foundations is now also enshrined in the investment agreement with the EU. Civil society is excluded from better standards, such as those achieved for companies. Beijing is thus sending a clear signal, as Amelie Richter reports. For more on the impact of the agreement on German and European market participants, read our China.Table analyses on the CAI.

Tensions in USA-China relations won’t ease even under the new US president Joe Biden, Felix Lee predicts. There will be undiplomatic bluster in front of the cameras, as at the meeting in Alaska. Moreover, Washington is forging new and old alliances to contain China. On the other hand, Jörg Wuttke, President of the EU Chamber of Commerce in China, writes in the Opinion that sanctions from the US side will not hurt Beijing. Xi Jinping enjoys strong support in the party and therefore has no pressure to give in to foreign demands.

China’s banks have become the largest in the world in recent years. But many experts wonder how many bad loans are lying dormant on their balance sheets. While China’s former finance minister Lou Jiwei urges a further reduction of credit risk, the rating agency Fitch attests Beijing good progress, as Gregor Koppenburg and Jörn Petring report.

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Nico Beckert

Feature

Foundations and NGOs: concern about CAI sales

In the annexes to the investment agreement between the EU and China, there is also a paragraph dealing with NGOs in the People’s Republic. The fact that such a passage can be found in the CAI comes as a surprise to politicians and those affected. Not only is it similar to the already strict NGO law of 2017, but China also reserves the right to fill leading positions with Chinese. There is also criticism of the fact that foreign investment for non-profit projects in China is still prohibited. For more on the impact of the agreement on German and European market participants, see our China.Table analyses on the CAI.

By
Amelie Richter

Working for foreign non-governmental organizations (NGOs), such as environmental movements and foundations, in China is already tough. Since the beginning of 2017, a strict law has been in force in the People’s Republic that severely restricts the possibilities of NGOs. Among other things, it has since placed the work of all foreign NGOs under the supervision of the Ministry of State Security, which is known for its often rude and arbitrary approach. Previously, the much more moderate Ministry of Civil Affairs was responsible.

It is therefore all the more surprising that a corresponding passage has now been included in the investment agreement between the European Union and China (CAI).

Tightening of the existing rules

The CAI also details the treatment and thus crackdown on foreign NGOs by Chinese authorities – foreign investment in the organizations remains banned, as expected. China is using the text of the agreement to reserve further pressure on Chinese appointments to leadership positions. German foundation representatives consider this to be highly questionable.

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