China's charities receive little support from the business community with only one percent of domestic companies ever having made donations, according to a China Youth Development Foundation report released on Monday.

The report cited by the Beijing News on Monday said that only 100, 000 of China's 10 million registered companies have ever donated to charities.

The capital currently held by China's charitable organizations is five billion yuan (US$605 million), accounting for 0.5 percent of the country's total gross national product, said Fan Baojun, president of the China Charity Federation.

"Because of the capital shortfall, charity organizations can only assist a small number of the needy," he said.

Funds donated to charities by companies in the United States averages US$670 billion annually, about 9 percent of the country's gross national product.

Calling charities "a vital tool to redistribute social wealth and relieve poverty," Fan attributed the reluctance of the Chinese business community to donate to the lack of a culture of charity and giving.

After 11 years of economic development, there are still only 100 charities in China, he said. Not helpful at all are also China's tax laws that require donors to pay additional personal income tax if their donations exceed three percent of the amount of tax to be paid.

Prof. Deng Guosheng with the Non-Governmental Organizations Research Institute at Tsinghua University proposed that the government follow in the footsteps of Western nations; levy legacy duties and give donors more tax breaks for their donations.

He also hoped that the government would map out policies in support of the development of non-governmental charity organizations.

(Xinhua News Agency June 7, 2005)