Beijing (AsiaNews) - China's Communist leaders are still unable to find a way to deal with Non-Governmental Organisations (NGOs). Although they are increasingly proving necessary for the country's social development in support of the weakest segments of the population, they continue to be viewed with suspicion by the state.

After many years operating in a legal no-man's land, NGOs have had to battle government departments designed to control them. Proposals to increase the transparency of their operation could simply become another tool of control.

The Civil Affairs Department issued new rules that require NGOs to release accurate financial statements. Charities must publish reports about their income and expenses every three months during a fund-raising drive, and at the end of each drive. They must also not endorse directly any business or commercial product.

In order to limit corruption, the new law would ban using donations to pay for excessive expenses, including staff wages and undefined benefits.

There were 2,500 charitable foundations by the end of 2011, twice the number of 2005, with assets exceeding 60 billion yuan.

In recent years, some of them have been hit by scandal.

A young woman who claimed to work for the Red Cross caused uproar after she bragged about her expensive handbags and cars.

The Henan arm of the China Song Ching Ling Foundation, the mainland's third biggest charity, was found to have collected 3 billion yuan in assets in three years through extending loans to businesses.

"The real problem is how money is used," a source from the non-profit sector told AsiaNews. "The government wants to control how it is used. However, if money cannot be used to hire the best workers, things cannot improve. Transparency is good, but it should be applied to all societal fields."

"The root of the problem is the government's ambivalence towards the role of NGOs," a Chinese commentator wrote. "They have traditionally been seen as trouble makers rather than agents of positive change. This outmoded thinking presents an obstacle to passing the charity law."

"As one NGO industry observer said, foreign NGOs and NGOs with a focus on political reform or rights advocacy will continue to face challenges and distrust in China."

"However, hopefully the rest should be allowed greater freedom to operate. Their contributions to China are critical. A stronger civil society is crucial to China at this stage of development, and this could only be achieved if they are not turned into an arm of the government."