"Currently, the taxation system does not meet the requirements of new social development," said China Welfare Institute Vice-President Xu Dexin.

Out of the 1.2 billion yuan (US$145 million) collected by the China Charity Federation over the past seven years, only about 30 per cent was from the mainland, according to China Business Times.

These harsh facts have forced political advisers to consider measures to swell the coffers of the nation's charities.

"Donors deserve preferential treatment in taxation if they make a significant contribution to society," Xu said.

Xu, a member of the 10th National Committee of the Chinese People's Political Consultative Conference (CPPCC), is in charge of the Shanghai Soong Ching Ling Foundation. She told China Daily that her charity organization has collected more than 10 million yuan (US$1.2 million) in the past six months, mainly from domestic and overseas entrepreneurs.

Reducible tax for donors can be regarded as an award and can encourage both entrepreneurs and the public to contribute to charities, Xu said, adding that such a policy can help build a civil society.

A number of China's affluent people are concerned that, by giving to charity, they will draw attention to their wealth, putting them at risk of extortion or even murder.

Zhang Guoxi, owner of a profitable private enterprise in East China's Jiangxi Province and also a CPPCC member, said he has donated more than 20 million yuan (US$2.41 million) to good causes in recent years.

Zhang called for entrepreneurs who give to charities to be held up as an example, encouraging more of their kind to contribute.

A professor with the Department of Sociology under Peking University who declined to be identified, said that in China, a country with 1.22 billion population, the roles played by non-governmental organizations and the social welfare network are vital.

China started setting up permanent donation stations in 1996. To date, the country has more than 18,000 such stations.

More than 13.2 million Chinese have benefited from charities in the first nine months of last year, according to statistics released by the Ministry of Civil Affairs.

Compared with the past few years, the ministry report noted that a large share of the relief fund and goods come from charity networks across the country.

In addition to improving taxation system and social welfare network, all citizens should deepen their understanding of their social responsibilities, according to the analysts.

(China Daily March 5, 2003)