China has issued new regulations on the administration of public welfare foundations, hoping to encourage more wealthy people to commit to public welfare and thus foster new foundations, a senior official said in Beijing Friday.

"We still need more foundations to participate in public welfare as we have inadequate non-profit organizations to meet the demand," Jiang Li, vice minister of civil affairs, told a news conference.

China had registered 1,200 foundations committed to public welfare by making use of the assets donated by individuals or organizations by the end of 2003, according to statistics released by the ministry Friday.

The regulations, which will take effect as of June 1, have for the first time divided foundations into two types: publicly-funded foundations, which could raise funds from the public, and non-publicly-funded foundations, which are not allowed to raise funds from the public.

Jiang said such divisions were to mobilize more people to participate in charitable activities and help utilize to the maximum the public's social resources, especially those wealthy groups.

"More standardized social welfare activities by foundations will help China resolve the problem of the widening gap between the rich and poor," she said.

She said the Ministry of Finance and the State Administration of Taxation are still discussing the specific preferential tax policies for those individual or enterprise donors.

Meanwhile, overseas foundations win the go-ahead to establish representative offices on the Chinese mainland but are not allowed to solicit or receive donations on the Chinese mainland, according to the new regulations.

"We have to protect the limited charity resources by regulating the publicly-funded foundations on a certain scale," Jiang said, adding such restrictions won't hinder overseas donors' enthusiasm.

The national publicly-funded foundations are required to raise at least 8 million yuan (about US$964,000) before registration while individuals and enterprises hoping to establish non-publicly-funded foundations are required to donate at least 2 million yuan (US$241,000).
 
(Xinhua News Agency March 20, 2004)