By Sui-Lee Wee, Michael Martina and James Pomfret
BEIJING/HONG KONG (Reuters) - Western governments and foreign non-profit groups are pressuring China to revise a proposed law they say would severely restrict the activities of non-government organizations, business groups and universities, according to people familiar with the matter.
The draft law "governing foreign NGOs", which has triggered a storm of criticism since it was made open for public consultation last month, requires foreign non-profits to find an official sponsor, typically a government-backed agency, and gives broad latitude to the police to regulate activities and funding.
In a confidential diplomatic document seen by Reuters, the European Union said China was using the law to "silence dissenting voices".
The European Union, in its note to China, outlined its concerns about the laws that would in effect grant law enforcement authorities sweeping powers to "micro-manage" foreign NGOs with political, religious and human rights organizations.
"It's an effort to control foreign organizations under the guise of law-based governance. These are the prevailing winds of the time in China," an official from a European country said.
The law comes amid a crackdown on dissent by President Xi Jinping's administration. His government has detained and jailed activists and blamed "foreign forces" including foreign NGOs for the pro-democracy protests in Hong Kong last year.
Under the law, the term "foreign NGO" is so loosely defined it could apply to an American professor planning to speak at a Chinese university, foreign trade associations, and overseas dance troupes performing in China.
The PSB (public security bureau) will "start controlling everything" related to NGOs in China, according to a second diplomatic source.
China's public security bureau and the State Council's legislative affairs office gave no immediate response to faxed requests from Reuters seeking comment.
A coalition of groups spanning diplomacy, academia, civil society and business are organizing to petition the government to tone down the law, which could be passed later this year.
The Motion Picture Association of America, the Grocery Manufacturers Association and the U.S. Grains Council are among dozens of organizations that promote foreign business interests in China that are part of discussions with the American Chamber of Commerce in China on how to lobby the government, according to a source with direct knowledge of discussions on a joint letter to Beijing.
These entities couldn't immediately be reached for comment.
"An abnormally high number of people are worried about blowback. People are saying we have to be careful not to rile up the beast, but they are not thinking about the broader impact it could have," the source said.
FEAR OF COLOR REVOLUTIONS
Foreign non-profits would be barred from having branch offices in China and would have to submit their activity plan for the coming year to their official sponsor before November 30 every year, according to the draft.
A person working for a major foreign non-profit organization said the registration process would be "a multi-layered death by bureaucracy" that could force some NGOs out of China.
China says it has about 6,000 foreign NGOs, mostly from the United States.
The law is a response to the fear of "Colour Revolutions" - popular uprisings that occurred in former Soviet states - and the Jasmine Revolution, pro-democracy protests that were snuffed out quickly in Chinese cities in 2011, said Jia Xijin, professor of civil society at Beijing's Tsinghua University.
The European Chamber of Commerce in China said the law would raise compliance costs for these NGOs.
"This in turn will likely reduce the ability and possible willingness of such NGOs to work in China, and subsequently limit both Chinese and foreign businesses from benefiting from the value they add," European Chamber President Joerg Wuttke said in a statement.
Although the law was formulated to safeguard foreign NGOs' "lawful rights and interests", critics say it could hamper the growth of civil society in China. Many foreign NGOs disburse money to grassroots NGOs, say NGO operators and sources.
Already some activists in China say they have been threatened by police and state security agents to sever ties to and funding from foreign entities.
NGO representatives who "subvert state power", "engage in or provide financial assistance for political activities" can be detained for up to 15 days, fined up to 300,000 yuan and investigated for "criminal liability".
The publication of the draft comes a month after police charged the legal representative and administrative director of Transition Institute, a think-tank that researches business, business regulations, reform and civil society, with "illegal business operations".
(Reporting by Sui-lee Wee, Michael Martina and James Pomfret; Editing by Will Waterman)