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China needs a new law to ensure the healthy development of its charity industry.

So said both experts and celebrities at this year's sessions of the country's top legislative and advisory bodies held earlier this month.

Yang Lan, a well-known TV hostess and member of the Chinese People's Political Consultative Conference (CPPCC), said it was necessary to establish a law that would make the donation procedure simple and transparent, legalize qualified organizations and make access to charities easy.

Yang, who last year ranked second on Hurun's China Philanthropy list, is not alone in proposing the introduction of a charity law.

Chen Tiedi, president of the Shanghai Charity Foundation (SCF), said: "We need such a law, and we need it badly."

He said China had 13 years' experience developing charities since the China Charity Federation (CCF) and SCF were set up in 1994. Statistics show that the country now has more than 280,000 charitable organizations and more than 1,100 charitable foundations, with more being set up all the time.

"We need a law to help solve the problems facing charitable organizations and to facilitate their further development," Chen told in a recent interview.

He suggested the law should stipulate clearly how the government will support charitable organizations and the enterprises that donate to them. It should also promote regular communication between the government and charities.

"The law should offer preferential treatment for enterprises that make donations, require that government departments regularly send aides to communicate with charitable organizations, and encourage greater 'charity consciousness'," Chen said.

Citing statistics, Chen said that in 2006, corporate donations to charities, which came from just 1 percent of the country's more than 10 million enterprises, amounted to about 13.5 billion yuan (US$1.74 billion), equivalent to 0.05 percent of GDP. In developed countries this proportion is generally between 3 and 5 percent, Chen said, adding that China has a large population of disabled, aged and poor people in need of help.

To encourage more philanthropic behavior, it has also been suggested that companies should be offered more incentives to make charitable donations.

Chen Shouyi, a CPPCC member from Ningbo, said: "This could be achieved either by offering tax incentives or lowering thresholds for entry into the non-governmental charity fund.

"However, the situation would have to be closely supervised to prevent companies using the charity law as a way to evade paying tax."

Tong Baohai, an NPC deputy, said the new law should also address the operation of charitable funds and management of employees and volunteers to ensure all donations end up in the right place.

"We have to eliminate those people who take advantage of charitable events to make money for themselves," Tong said.

(China Daily March 28, 2007)