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Philanthropy in China continues to have strong government regulation, and little tax break for donors, but it is beginning to change.

"The China Philanthropy Research Institute estimates that fully 80% of donations by the wealthiest Chinese go to overseas charities. Many may well prefer to give to local causes, but regulations have hindered the development of philanthropy at home. To function as a not-for-profit organisation, charities must have a government partner, which entails the loss of their autonomy. It is also difficult for them to obtain tax breaks for their donors.

"But this will soon change. The government published a draft law on charities in late October. Under discussion for a decade, it defines charities broadly, and acknowledges that they can help improve everyone’s quality of life. The law promises to allow charities to register directly, rather than work through an official partner. They may also enjoy tax exemptions. Zhu Jiangang of Sun Yat-sen University in Guangzhou says the law should help reduce the influence of government, and thus encourage charities to flourish. It is expected to be approved soon."--The Economist


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