China is drafting a charity law to ensure charities enjoy favorable taxation policies and rights to manage their properties, the Legislative Affairs Office of the State Council said Friday.

The office's deputy director Gao Fengtao said at a forum on charity legislation that "the draft charity law was generally written," but he did not say when the draft could be submitted to the top legislature for deliberation.

The 9-chapter draft sets out rules on charities, donations, volunteer service, charitable trust, and activities of overseas charities in China, according to Gao.

The draft provides for a registration and management system for charity organizations, he said.

To usher in competition, it also has provisions on charitable trusts, he said.

In addition, the draft would clarify the government's role in the development of the charity sector and establish penalties for those who abuse their power.

"The principal element of the charities shall be the people, not officials," Gao said.

"The government may encourage and give guidance to the charity sector, but is not obliged to do so... Using administrative power to accumulate charity resources could only damage the development of charities," he said.

Gao said the draft would also set up a mechanism to increase transparency of charity donations so as to enhance the credibility of China's charity organizations.

China received more than 33 billion yuan (US$4.83 billion) in charity donations in 2009. Education, disaster-relief projects, and the social services sectors were the areas that attracted most of the charity donations.