Zhejiang Province Implements Marginally More Liberal Civil Society Regulations on Rural Cooperatives

According to an article carried on the China Court Web site, Zhejiang province has enacted China's first regulations on the organization of rural professional cooperatives. These regulations represent a marginally more liberal approach to rural organizations and, notably, do require a sponsor organization in order to register.

The Zhejiang Province Regulations on Professional Farmers Cooperatives, which will come into effect on January 1, allow the formation of agricultural cooperatives for the purpose of carrying out an assortment of production, management, and service functions. The regulations require cooperatives to establish a charter, board of directors, and management structure, and fulfill a detailed set of requirements.

The Ministry of Industry and Commerce approves the registration of the cooperatives. Once the cooperatives are established, the regulations direct agricultural bureaus at the county level and higher to supervise and perform service functions. The regulations do not require that cooperatives obtain the approval of the Ministry of Civil Affairs (MOCA), agricultural bureaus, or a sponsor organization before applying to register.

As many observers have noted, the requirement that organizations obtain the support of an official party or government sponsor is one of the most serious limitations on the development of an independent civil society in China. (For more information, see the civil society section of the Commission's 2004 Annual Report).

Significant restrictions on rural cooperatives remain. Cooperatives must have 50,000 RMB in capital in order to register. Agricultural bureaus continue to be involved in the annual financial review process (although this review appears to be limited to monetary matters, rather than then activities of the cooperatives).

A potential conflict exists between the Zhejiang regulations and the relevant MOCA notice on the establishment of rural "professional economic associations." Although the two are very similar in content, the MOCA notice clearly envisages stronger MOCA involvement and control over rural associations and is much more in line with prior civil society regulations.

The Zhejiang regulations represent a marginally more liberal attitude towards the emergence of autonomous organizational forms in China's rural areas. On the one hand, this may represent an effort to give farmers more effective tools to improve their economic situation. On the other, it also may simply reflect a government need to recognize (and attempt to regulate) the increasing number of rural organizations that are emerging in the countryside, often outside of government control (noted in a report by the China Reform Institute).