Under current rules, independent NGOs are not entitled to a non-profit status and so must register as companies and are liable to pay tax. Now the State Administration of Foreign Exchange is requiring them to meet a new set of conditions, among them the presentation of certificates of registration of the overseas donor organisations abroad and a notarised donation agreement.

NGO groups - also religious ones - are also required to obtain approval from the authorities before accepting donations worth more than 1 million yuan (US$ 150,000).  NGOs connected to the government are exempted from such rules.

The move has raised serious concerns among independent grassroots NGO workers, who fear it is the latest step by the government to take over their work.

The closure last July of Beijing-based civil rights group Open Constitution Initiative, which received grants from the Yale University law school, is still fresh in many NGO workers' memories. The non-profit group annoyed the government with a series of high-profile cases, including providing legal aid to victims of tainted baby milk formula.

Apart from being fined 1.4 million yuan for tax violations, its founder Xu Zhiyong was detained for weeks right at the time when the NGO faced a plethora of bureaucratic procedures, including scrutiny from various government departments including tax, commerce and state security authorities.

The new policy “gives the government even more control,” Wan Yanhai, head of outspoken Aids organisation Aizhixing, told the South China Morning Post. It “is a weapon that targets NGOs, it's a gun in their [authorities’] hand”

Not only does it increase controls but adds more paper work, splitting formalities among a number of agencies so that it will be harder to get funding but it will easier to make mistakes and be fined.

In addition, it might not be enough to get a donor's agreement notarised; instead, the overseas donor organisation might even have to be present on the mainland to sign a document to prove the authenticity of the donation.

Wan, who has been involved with AIDS patients for the past 16 years and has been arrested and interrogated several times, said, “Now I realise not only are they not grateful” for what he does but “they actually want to do away with us."

Deng Guosheng, an associate professor at Tsinghua University, said that Chinese authorities have become suspicious of foreign-funded NGOs in recent years, fearing they might be used to interfere in Chinese internal affairs.

Analysts point to the case of Oxfam in Hong Kong. In February, a notice apparently issued by the Chinese Ministry of Education began appearing on Chinese university websites accusing the charity of being “ill-intentioned".

On 24 February, Oxfam announced that it would suspend its programme to train mainland students until the ministry’s notice was clarified.

Since 1987, the Hong Kong charity had been working in the mainland, running development projects like rural poverty relief and women’s rights as well as AIDS-HIV prevention. Over time, it had formed a relationship with Chinese authorities since 80 per cent of its project partners are local governments, and universities and other public entities.

Now, it appears that the authorities intend to make it harder for independent NGO, even charity groups, to do their work and this bodes ill for the future.