Over the past few weeks, as commercial newspapers in China — most notably, Guangzhou’s hard-punching Southern Metropolis Daily — have been relentless in their pressure on billionaire Lu Junqing (卢俊卿) and his World Eminent Chinese Business Association, alleging improprieties with its charity activities, state media have remained quiet. All that changed late last night as China’s official Xinhua News Agency ran a lengthy “investigative” report called, “Raising the Curtain on Three Major Questions About ‘China-Africa Project Hope’.”
The Xinhua report is essentially a compilation of remarks from various sides of this story, including the Overseas Chinese Affairs Office of the State Council — which is very critical of these “so-called ‘global'” events by ostensible overseas Chinese associations — billionaire Lu Junqing (as the official representative of all of the associations facing scrutiny), and other state offices and independent experts.
Comments reported from others are interspersed with “reporters’ investigation” sections in which the writers of the story insert other facts that help clarify the case or put remarks in perspective.
The following is a partial translation of the Xinhua report. We strongly encourage readers to have a look at the full version as well.
“Xinhua Viewpoint: Raising the Curtain on Three Major Problems at ‘China-Africa Project Hope’“
September 8, 2011
Reporters Zhou Ning (周宁), Li Dexin (李德欣) and Zhang Yu (张宇)
Recently, 24-year-old Lu Xingyu has drawn fierce attention from society because she posted on her microblog that she was the “executive chairman of ‘China-Africa Project Hope'” and “managed two billion yuan in project funds.” As the incident continued to ferment, the group behind “China-Africa Project Hope”, the World Eminent Chinese Business Association (WECBA), suffered relentless questioning by the public. Was it legal for an outside association like the WECBA to hold events inside China? Was “China-Africa Project Hope” in violation of regulations? Was the fund in compliance by taking a 10 percent management fee from donations?
Concerning these three major questions, the [Lu Junqing] affair and the lessons it holds, Xinhua News Agency interviewed government authorities, the Overseas Chinese Affairs Office of the State Council, the Ministry of Civil Affairs, and parties to the “China-Africa Project Hope” affair for their responses.
Is it illegal for an overseas association like the WECBA to conduct activities inside [China]?
[Reporters’ Investigation] The State Council’s “Regulations on the Management of Registration of Social Associations” and the Ministry of Civil Affair’s “Provisional Measures on Stamping Out Illegal Non-government Organizations” stipulate that [associations] that have not registered and taking the liberty to carry out activities in the name of an association are regarded as illegal non-government organizations, and they should be suppressed and their illegal assets confiscated. The Ministry of Civil Affairs General Database on National Social Organizations does not include any registration information concerned the World Eminent Chinese Business Association.
[WECBA Chairman Lu Junqing] Our association is a global organization of Chinese businesspeople with a core comprising top-500 Chinese businesspeople and mainly composed of Chinese billionaires. It was formed in Hong Kong, with dual registrations as an association and a business, with registration names given as the “World Eminent Chinese Business Association” (legal representative Lu Junqing) and the “World Eminent Chinese Business Association Company Limited” (legal representative Lu Junqing) and Beijing representative office registration number (北京代表处注册号) 110000400160767.
Our association carries out charity activities inside [China] in the name of an association (以社团名义), and if we hold events jointly with other institutions, the association is only responsible for services on the public welfare side, and the market side of things (市场化部分) is entrusted to the Tianjiu Confucian Business Investment Group (legal representative Lu Junqing) which provides services to clients, collects relevant service fees and bears all business and legal responsibility.
The Tianjiu Confucian Business Investment Group supported the WECBA in jointly launching China-Africa Project Hope with the China Youth Development Fund [of the Chinese Communist Youth League], and committed to contributing ten million yuan every year to the China Youth Development Fund from 2011 to 2020, to be used in implementing Project Hope in various African countries.
[Overseas Chinese Affairs Office] Our office has never received any application for examination and approval for events concerning overseas Chinese from the WECBA. Our office has discovered that since 1990, a number of associations or organizations purporting to be “global” Chinese or overseas Chinese organizations, flying banners of “global,” “world” or “international” to carry out various overseas Chinese events, and these have internally impacted the normal operation of our own overseas Chinese work, doing damage to social stability in a number of local areas and to overseas cooperation . . .
Our office believes that these organizations have four principal characteristics: 1. they have names that do not reflect their real roles, and they exaggerate their membership rolls; 2. they are registered overseas, but carry out activities inside [China]; 3. they are full of bravado, often using the Great Hall of the People, the Diaoyutai State Guesthouse and other important national event sites to hold their events, and they falsely claim that they have close connections with our state leaders, and they abuse or illegally misuse the names of famous people in a bid for financial gain; 4. they accumulate wealth by dishonest means, and take the liberty of holding so-called “global” overseas Chinese activities with a clear financial motive within our borders.
For this reason, our office released a relevant document with the Ministry of Civil Affairs and other offices on January 2010 emphasizing that we would resolutely employ harsh measures to prevent so-called “global” overseas Chinese associations or organizations from holding activities in China and the abominable impact they have.
Is ‘China-Africa Project Hope’ in Violation of Regulations?
1. Is the “China-Africa Project Hope” for public good or private gain?
[Reporters’ Investigation] The official website of the China Youth Development Fund says that this fund is a public welfare fund. According to the sixth clause of the “Charter of China-Africa Project Hope” (“中非希望工程”基金章程) released by the China Youth Development Fund, the income for this fund comes not only from members of the World Eminent Chinese Business Association but also includes “donations from various corners of society.” Further, the donation hotline on the official website of “China-Africa Project Hope” give the phone number not of the China Youth Development Fund but of the WECBA, and the address given is for the Daheng New Epoch Technology Building (大恒科技大厦), which in fact is the office place of the WECBA in Beijing.
[China Youth Development Foundation Secretary Tu Meng (涂猛)] “China-Africa Project Hope” does not turn to the public for support, the source of the fund being the solicitation of members for donations by the WECBA. Donors sign a contribution agreement (捐赠协议) with the China Youth Development Fund, and at the same time directly deposit funds into the account of the China Youth Development Fund. Right now “China-Africa Project Hope” has already collected donations totaling 30.32 million yuan. The fund will take on the costs of construction of 20 schools in a total of five countries, Kenya, Rwanda, Tanzania, Namibia and Burundi, with each school receiving around 1.5 million RMB. Of these, Tanzania’s “Mosuoga” (摩唆嘎) Primary School has already started construction, with one installment of construction funds having already been given to contractors and the project slated to be finished by year’s end.
[Zhang Bufeng (张步峰), professor of administrative law at China University of Natioanalities] The biggest difference between public [welfare] funds and private funds (私募基金会) lies in the fact that the former is required in its annual report to make a public statement of where funds have been allocated, while the latter is required to make a report to its benefactors of how donations have been spent. However, any [organization] that “seeks donations from different sectors of society” (向社会各界捐赠) most certainly belongs to the category of a public fund (公募基金) and therefore has a responsibility to provide the public with information about its activities.