Ministry of Civil Affairs' Interpretation of the "Overall Plan for Decoupling Industry Associations and Chambers of Commerce from Administrative Organs"

The "Overall Plan for the Decoupling of Industry Associations and Chambers of Commerce from Administrative Organs" was released to the public on the 8th. Regarding the current status of industry associations and chambers of commerce, how to strengthen supervision after decoupling from administrative organs, and how to carry out pilot work, relevant officials from the Ministry of Civil Affairs provided corresponding answers.

Current Status: Rapid Growth but Facing Many Challenges

Question: How many industry associations and chambers of commerce organizations are there currently in China, what development trends do they show, and what problems have been exposed?

Answer: The number of industry associations and chambers of commerce in China has grown from less than 1,000 in the late 1980s to nearly 70,000 by the end of 2014, increasing at an annual rate of 10% to 15%. They are the most numerous and fastest-growing among all types of social organizations. With the deepening of the market economy, a group of independent, capable, credible, and exemplary industry associations and chambers of commerce have emerged. These organizations have played important roles in actively reflecting members' demands, participating in the research and formulation of relevant industrial policies, strengthening industry self-discipline, improving industry management, coordinating international trade disputes, and safeguarding members' legitimate rights and interests.

However, overall, China's industry associations and chambers of commerce are still in the early stages of development and face some prominent problems and challenges—

The understanding of industry associations and chambers of commerce needs to be deepened. Some localities, departments, and public opinion still view the status and role of industry associations and chambers of commerce from the perspective of the planned economy era, lacking sufficient understanding of their development laws and unclear about their significance and development trends under the new situation;

There is a strong administrative color. Some industry associations and chambers of commerce in China were established following government institutional reforms and the abolition of professional departments, maintaining close ties with the government. Most leaders of these associations are recommended by their business supervisory units. Some associations rely on administrative departments to carry out their work, and some administrative departments are accustomed to directly commanding associations as their affiliated institutions. As independent legal entities, industry associations and chambers of commerce lack autonomy, which affects the effective conduct of their business activities. Some even use the influence of administrative departments to impose fees on member enterprises and are keen on arbitrary evaluations and awards, increasing the burden on enterprises;

Insufficient capacity building. Some industry associations and chambers of commerce have not yet established modern social organization systems, with imperfect internal governance, incomplete organizational structures, lack of democratic management, non-transparent financial management, low self-discipline and integrity, and insufficient social credibility. Some associations offer low remuneration, making it difficult to retain talent, and have few full-time staff. Some lack comprehensive knowledge of industry basics and foundational data, lack research and reflection on overall, strategic, directional, and innovative aspects, and the quality and level of member services need improvement. These factors to some extent restrict the development of industry associations and chambers of commerce.

Management: Focus on Strengthening Mid-term and Post-event Supervision

Question: After decoupling industry associations and chambers of commerce from administrative organs, how can supervision remain connected?

Answer: Decoupling industry associations and chambers of commerce from administrative organs does not mean deregulation. After decoupling, supervision must be effectively strengthened to prevent a management "vacuum." The Ministry of Civil Affairs, as the registration management authority, will focus on strengthening mid-term and post-event supervision of industry associations and chambers of commerce after decoupling:

First, strengthen the management of leaders of industry associations and chambers of commerce. The Ministry of Civil Affairs, together with relevant departments, will establish management systems for the qualifications of leaders, methods of appointment, interviews, warnings, orders for replacement, prohibition from practice, and implement the statutory representative's departure audit system. Strengthen accountability for leaders' faults, and for serious violations, order replacement and pursue legal responsibility. Implement pre-appointment public disclosure and statutory representative performance reporting systems;

Second, strengthen the management of activities of industry associations and chambers of commerce. The Ministry of Civil Affairs will supervise leaders, funds, activities, information disclosure, and charter compliance of industry associations and chambers of commerce through inspections and evaluations according to law. In line with the "Opinions on Promoting the Integrity and Self-discipline Construction of Industry Associations and Chambers of Commerce," establish credit files, explore credit evaluation work, set up "abnormal list" and "blacklist" management systems, and increase penalties for dishonest behaviors;

Third, strengthen social supervision. Encourage and support news media and the public to supervise industry associations and chambers of commerce. Formulate information disclosure methods for social organizations, standardize disclosure content, mechanisms, and methods to improve transparency. Establish and improve third-party evaluation mechanisms for industry associations and chambers of commerce. Set up complaint and reporting acceptance mechanisms for illegal and irregular behaviors, and publicly announce administrative penalties and revocations according to law;

Fourth, strengthen special governance. Cooperate with the Ministry of Finance, Ministry of Industry and Information Technology, Central Organization Department, and other departments to carry out special activities such as clearing enterprise-related fees, reducing enterprise burdens, and cleaning up and standardizing administrative approval intermediary services in State Council departments. Conduct special rectifications on behaviors where industry associations and chambers of commerce use the influence of business supervisory departments, borrow administrative resources, rely on acting government functions, or leverage monopoly positions to arbitrarily impose fees and charges.

Pilot: Carefully Formulate Implementation Plans According to Different Situations

Question: The overall plan proposes that the pilot work for decoupling national industry associations and chambers of commerce will be led by the Ministry of Civil Affairs. How will the pilot work be carried out?

Answer: The Ministry of Civil Affairs will establish a pilot work office to take the lead in specific work.

At the national level of industry associations and chambers of commerce, the general arrangement is to select about 100 national industry associations and chambers of commerce to start the first batch of pilots in the second half of this year, summarize experiences and expand the pilot in 2016, and conduct pilots on a larger scale in 2017. During the pilot work of decoupling, each business supervisory unit, as the responsible entity, must establish a special working mechanism according to the principle of "who supervises, who is responsible," clarify task division, and ensure accountability; carefully determine the pilot list of national industry associations and chambers of commerce based on thorough research and full communication; formulate detailed decoupling pilot implementation plans for each association according to their different situations, and arrange, guide, and control specifically. National industry associations and chambers of commerce participating in the decoupling pilot must conduct self-inspection and separation work according to the overall plan and supporting documents to ensure the timely completion of pilot tasks.

At the local level of industry associations and chambers of commerce, decoupling working groups in each province (autonomous region, municipality) are responsible for organizing synchronized pilot work. In the second half of this year, several provincial-level associations will be selected to carry out pilots first. The first batch of pilots and evaluations should be completed by the end of 2016. Based on careful summary of experiences, pilot policies will be improved, the pilot scope gradually expanded, and the work prudently and steadily promoted.

(Reprinted from Xinhua Net)